Fight­ing crime the FIU way

Lesotho Times - - Big Interview -

THE Cen­tral Bank of Le­sotho (CBL) in 2013 launched the Fi­nan­cial In­tel­li­gence Unit (FIU) to en­hance the in­tegrity of the coun­try’s eco­nomic sys­tem. The Unit was es­tab­lished by the Money laun­der­ing and Pro­ceeds of Crime Act 4 of 2008 with the mis­sion to be­come “a dy­namic cen­tre of ex­cel­lence pro­vid­ing fi­nan­cial in­tel­li­gence re­ports for com­bat­ing money laun­der­ing and ter­ror­ist fi­nanc­ing in Le­sotho and in­ter­na­tion­ally”. Le­sotho Times ( LT) reporter Pas­cali­nah Kabi speaks with FIU Le­gal and In­for­ma­tion Of­fi­cer, Mo­fo­keng Ra­makhala, about the agency and why it was nec­es­sary for the coun­try to es­tab­lish it.

LT: The Fi­nan­cial In­tel­li­gence Unit or FIU in short, was launched in 2013 by the Min­istry of Fi­nance, through the Cen­tral Bank of Le­sotho. Could you please tell us what this agency is all about?

Ra­makhala: The Fi­nan­cial In­tel­li­gence Unit was es­tab­lished by the Money laun­der­ing and Pro­ceeds of Crime Act 4 of 2008. Its main re­spon­si­bil­i­ties are re­quest­ing, re­ceiv­ing and analysing fi­nan­cial in­for­ma­tion con­cern­ing sus­pected pro­ceeds of crime and ter­ror­ist fi­nanc­ing and pass­ing on the data to law-en­force­ment agen­cies for in­ves­ti­ga­tion and pos­si­ble pros­e­cu­tion. The FIU fur­ther ex­changes in­for­ma­tion with its for­eign coun­ter­parts and un­der­takes ty­pol­ogy stud­ies on money laun­der­ing and ter­ror­ist fi­nanc­ing tech­niques.

LT: When we talk about money laun­der­ing, what does it re­ally mean?

Ra­makhala: Money laun­der­ing can sim­ply be de­scribed as a process of ob­tain­ing pro­ceeds through il­licit sources and later dis­guise their true ori­gin in or­der to avoid pros­e­cu­tion.

The neg­a­tive ef­fects of money laun­der­ing on eco­nomic de­vel­op­ment can­not be eas­ily quan­ti­fied. How­ever, this does not mean we should be al­low­ing th­ese il­le­gal ac­tiv­i­ties to take place be­cause that would not be an op­ti­mal eco­nomic de­vel­op­ment pol­icy.

Do­ing so would dam­age fi­nan­cial in­sti­tu­tions that are crit­i­cal to eco­nomic growth, re­duces pro­duc­tiv­ity in the real sec­tor by di­vert­ing re­sources and en­cour­ag­ing crime and cor­rup­tion.

Money laun­der­ing can fur­ther dis­tort the coun­try’s in­ter­na­tional trade and cap­i­tal flows to the detri­ment of long-term eco­nomic de­vel­op­ment. One would be aware that Le­sotho de­pends mostly on donor fund­ing and if such crimes take place un­abated, donor con­fi­dence will di­min­ish to the detri­ment of the na­tion. So the long and short of it is that money laun­der­ing is a very se­ri­ous and ter­ri­ble crime hence the rea­son why the FIU was launched. LT: But are there any ter­ror­ist fi­nanc­ing is­sues in Le­sotho or is this just a pre­cau­tion to en­sure the coun­try is safe from this crim­i­nal act?

Ra­makhala: Stud­ies done so far have not picked on any ter­ror­ist fi­nanc­ing here in Le­sotho. How­ever, this does not rule out the pos­si­bil­ity of ter­ror­ist fi­nanc­ing in our coun­try, given the fact that the full im­ple­men­ta­tion of anti-money laun­der­ing and com­bat­ing fi­nanc­ing of ter­ror­ism mea­sures is still in its ini­tial stages.

LT: What are some of the ob­vi­ous signs of money laun­der­ing which the pub­lic can pick and alert your of­fice or law-en­force­ment agen­cies about?

Ra­makhala: There are a cou­ple of money laun­der­ing signs that the pub­lic can eas­ily pick and alert us or law-en­force­ment agen­cies about. Th­ese in­clude un­usual, large trans­ac­tions and un­usual pat­terns of trans­ac­tions which have no ap­par­ent eco­nomic or le­gal pur­pose.

Money laun­der­ing sus­pects can fur­ther be seen by im­me­di­ately with­draw­ing funds just de­posited from un­ex­plained sources, as well as trans­ac­tions or fi­nan­cial ac­tiv­i­ties in­con­sis­tent with the cus­tomer’s pro­file.

LT: Since the FIU is an arm of govern­ment, can it then act against pow­er­ful rul­ing party of­fi­cials or po­lit­i­cally con­nected in­di­vid­u­als should they be found to have com­mit­ted a crime which falls un­der the ju­ris­dic­tion of this Unit?

Ra­makhala: The FIU is an agency of the govern­ment, but en­trusted to func­tion au­tonomously. But as ear­lier stated, the FIU does not in­ves­ti­gate but pro­vides in­tel­li­gence to law-en­force­ment agen­cies, ir­re­spec­tive of the sta­tus of an in­di­vid­ual, un­der re­view. Ours is an ad­min­is­tra­tive-type FIU, which does not get in­volved in in­ves­ti­ga­tions but sup­ports all the coun­try’s law-en­force­ment agen­cies with fi­nan­cial in­tel­li­gence, as men­tioned be­fore.

Some of this in­tel­li­gence can be gath­ered from our for­eign counter-parts and then passed on to the rel­e­vant re­quest­ing law-en­force­ment agency. Con­se­quently, a dis­tinc­tion be­tween un­der­tak­ing an in­ves­ti­ga­tion with the aim of gath­er­ing ev­i­dence should be made where the FIU makes an anal­y­sis of sus­pi­cion to de­ter­mine if a pos­si­ble of­fence of money laun­der­ing or ter­ror­ist fi­nanc­ing has been com­mit­ted.

LT: What is the dif­fer­ence be­tween the FIU and the Di­rec­torate on Cor­rup­tion and Eco­nomic Of­fences (DCEO)? The DCEO says its core busi­ness is fight­ing cor­rup­tion and eco­nomic of­fenses us­ing a clas­si­cal three-pronged ap­proach namely pub­lic education, preven­tion and in­ves­ti­ga­tion. This man­date sounds quite sim­i­lar to that of the FIU. So are the two or­gan­i­sa­tions not du­pli­cat­ing their roles?

Ra­makhala: Un­der the Money laun­der­ing and Pro­ceeds of Crime Act, the DCEO shall in­ves­ti­gate and with the con­sent of the Di­rec­tor of Pub­lic Pros­e­cu­tions, pros­e­cute wrong­do­ing. The FIU, on the other hand, pro­vides pure fi­nan­cial in­tel­li­gence to law-en­force­ment agen­cies such as the DCEO and the in­tel­li­gence does not form part of ev­i­dence that may be ten­dered in a court of law.

In short, the FIU is a buf­fer be­tween ac­count­able in­sti­tu­tions that feed it with in­for­ma­tion about sus­pi­cious fi­nan­cial ac­tiv­i­ties and law-en­force­ment agen­cies that in­ves­ti­gate such sus­pi­cion on the ba­sis of anal­y­sis made by the FIU.

So the role of the FIU should not be con­fused with that of the DCEO or the po­lice. Like I said, the FIU’S func­tions are mainly to re­ceive, an­a­lyse and dis­sem­i­nate dis­clo­sures of sus­pi­cious fi­nan­cial ac­tiv­i­ties. This dis­sem­i­na­tion is made ei­ther to the DCEO, the po­lice or Le­sotho Rev­enue Au­thor­ity (LRA) if the sus­pected of­fence is tax-re­lated.

FIU Le­gal and In­for­ma­tion Of­fi­cer Mo­fo­keng Ra­makhala.

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