A demonstrated contribution to governance Namibia - Building an anti-money laundering system from scratch

97748 Namibia Implementation of AML/CFT Framework April 7, 2011 A Demonstrated Contribution to Governance Namibia: Building an Anti-Money Laundering System from Scratch Overview Until 2009, Namibia did not have an anti-money laundering system in place. Drawing upon the World Bank’s experience and using the Bank’s flagship anti-money laundering program, Namibia built its first Financial Intelligence Centre (FIC) in 2009. The FIC receives reports from financial institutions on transactions that are suspected to involve criminal activities. Since 2009, the FIC has received more than 170 suspicious reports covering corruption, tax evasion, diamond smuggling, fraud, credit card fraud, and pyramid schemes. Challenge MULTIMEDIA Until 2007, Namibia had been working on anti- money laundering matters with assistance from several development organizations. At that time, Namibia approached the World Bank for help to set up an operational anti-money laundering system in the country, to complement ongoing work by these organizations. However, there was no capacity within Namibia to build such a system. In 2007, there were only a few officials within the government handling anti-money laundering issues. No suspicious reports were being made by the financial institutions. In the absence of a regulatory framework and an operational institution to track suspected proceeds from criminal activities, financial institutions did not have any More Results incentives to report suspicious activities. Moreover, before the introduction of a system to address proceeds from 170 criminal activities, there were suspected multi-million dollar financial crime cases. suspicious reports were made Approach by the financial institutions to the Financial Intelligence Centre The World Bank provided technical assistance to build an since May 2009 (related to anti-money laundering system in Namibia, including the corruption, tax evasion, diamond smuggling, pyramid schemes, regulatory framework and institutional capacity to handle fraud, and drug trafficking). money-laundering cases. The Namibian government played an active role in identifying areas that needed the Bank’s intervention and it led the reforms. Following the direction defined by the government, the Bank first focused on drafting and finalizing the implementation of the regulations as the foundation of the anti-money laundering system. The project $53 was designed to be delivered in a phased and sequenced approach. Therefore, the plan of action focused on drafting million regulations; setting up a Financial Intelligence Centre (FIC); amount involved in a corruption and building the capacity of staff in the FIC and other public case that was initiated in 2009 as a result of the newly sector officials from the central bank, the Anti-Corruption established anti-money Commission, the police, the tax authority and the prosecutor laundering system. general. In addition, officials from Namibia participated in a leadership program in 2007 organized by the Financial Market Integrity Group, a unit responsible for the anti-money MORE INFORMATION laundering program in the Bank. Namibia Financial Intelligence Centre Results Country Website As a result of the World Bank’s support, Namibia established Country Brief a viable and operational Financial Intelligence Center in May 2009. Since then the following major outcomes have been Country Assistance Strategy achieved by December 2010: Data and Statistics “Graft Inquiry in Namibia Finds More than 170 suspicious reports were made by the Clues in China” - New York financial institutions to the Financial Intelligence Times Centre since May 2009 (related to corruption, tax 2011 Index of Economic evasion, diamond smuggling, pyramid schemes, fraud, Freedom and drug trafficking). Financial intelligence gathered from some of these reports has been forwarded to law International Center for Asset Recovery enforcement authorities for further investigation and possible prosecution. An investigation of a big corruption case was initiated in 2009 as a result of a suspicious report made by a bank under the newly established anti-money laundering system. The case involved a multi-million dollar contract of US$55.3 million. This case is now being tried in the Namibian court. More than 50 public sector officials were trained in anti-money laundering matters. In 2010, Namibian officials trained by the Bank played an important expert role in technical assistance projects in other developing countries, including Liberia, Sierra Leone and Uganda. The officials were involved in capacity building and outreach to parliamentarians (as part of the enhancing South-to-South support initiative). Bank Contribution The World Bank provided the Namibian government with an analytical, legal and operational foundation to build a sound and viable anti-money laundering system. The advisory support was provided through a multi-year technical assistance program beginning in 2007 and ending in 2010 with a total cost of US$ 269,000. Partners Namibia is a good example of a strong partnership between the authorities, the Bank and other technical assistance providers. As mentioned above, the World Bank support was closely coordinated with other donors. The United Nations Office on Drugs and Crime provided an advisor to the prosecutor general’s office. The United States government provided an advisor to the Bank of Namibia to work on anti-money laundering issues through the U.S. Department of the Treasury - Office of Technical Assistance. The World Bank complemented this work by developing a regulatory anti-money laundering framework and building a sustainable Financial Intelligence Centre. Toward the Future By the completion of the project in February 2010, the overall support provided by the Bank in terms of the initial capacity building efforts, has ensured the sustainability of the Financial Intelligence Centre and its operational effectiveness. Currently, the Financial Intelligence Centre conducts its own training and outreach to the private sector based on knowledge and experience they have developed in the last few years. Some aspects of the phased approach to implementing anti-money laundering measures adopted in Namibia have also been used in Liberia and Sierra Leone. Beneficiaries The Anti-Corruption Commission, the Commercial Crime Unit of the Namibia Police and the Inland Revenue Directorate of the Ministry of Finance, report that “financial intelligence information from the Financial Intelligence Center is extremely valuable in their investigative work, particularly in analyzing financial transactions.”