Eswatini highly vulnerable to money laundering, terrorism financing

MBABANE – Eswatini is highly vulnerable to money laundering and financing of terrorism, the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) has found.

In the ESAAM/G’s 2022 anti-money laundering and counter-terrorist financing measures mutual evaluation report, the watchdog body highlighted that the kingdom faces the risk of terrorism financing, although this is generally considered low by the authorities.

ESAAMG assessors are of the view that the risk of terrorist financing can be higher as terrorist financing threats and vulnerabilities were not adequately assessed in Eswatini.

According to the organisation, the country faces tourism threats arising from neighbouring countries, where there are active terrorist groups, cross-border activities, the influx of foreign nationals from high-risk countries and the vulnerabilities in the non-profit organisations (NPOs) sector, hawala operators, high usage of cash, porous borders and cash withdrawals abroad using credit cards with unknown intended purpose.

The institution also noted that the other money laundering and terrorist financing vulnerabilities include that Eswatini is a cash economy and the usage of cash greases the informal economy, both of which provide avenues for money laundering and terrorist financing activities and facilitating untraceable and anonymous transactions.

According to the report, the draft National 5isk Assessment (N5A) report highlighted a widespread usage of cash in the purchase of real estate, in casinos, motor vehicle sales and in some instances, cash gained from illegal activities is sometimes used to buy commercial goods.

“This is also fuelled by porous borders which allow for widespread cross-border cash and goods smuggling to and from neighbouring countries,” reads the report.