K6.1bn lost through illicit financial flows

OVER K6.1 billion is estimated to have been lost through illicit financial flows in 2018, the Financial Intelligence Centre (FIC) has revealed.

FIC director, Mary Chirwa said this was as a result of suspicious financial transactions of tax evasion, fraud, corruption and money laundering involving 176 cases.

Ms Chirwa said from the 176 suspicious transactions reported last year, 80 were disseminated to law enforcement agencies for investigation and possible prosecution.

She pointed out during a presentation of the 2018 FIC trends report that tax evasion cost the country about K1 billion, corruption K4.9 billion, theft K110 million and through fraud K54 million.

Ms Chirwa the most prevalent forms of corruption involving K4.9 billion noted last year were those involving bribery, self-dealing or conflict of interest with public procurement activities significantly vulnerable to corruption where certain specifications are manipulated to disadvantage other bidders which has led to crowding of legitimate businesses.

“In 2018, the Centre analysed 176 suspicious transaction reports, of which 80 were disseminated to Law Enforcement Agencies on suspicions covering: tax evasion, fraud, corruption and money laundering. The total value of the suspected offences in the disseminated cases was estimated at K 6.1 billion which includes tax assessments by ZRA amounting to ZMW 62 million,” she said.

One of the cases highlighted in the report revealed a trend where some private companies that were awarded public contracts were funding some named political party activities with funds moving from private companies to prominent individuals linked to the political parties amounting to K10 million last year.

It also revealed a case of suspected corruption, abuse of office and money laundering where a suspect was said to have amassed wealth beyond his income within a short period with the aid of his associates.

The report says the suspect influenced the awarding of contracts to foreign construction companies and in return, these companies constructed 49 residential properties for him valued at K70 million and also bought two luxury vehicles for him valued at K4 million while his associates also acquired four properties valued at K61 Million.