Regulatory Framework and Money Laundering in Zambia

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NAME: Wanga Maiwanga
SIN: 10279819
TASK: Assignment 2
COURSE: Regulatory Framework
COURSE CODE: BF 330
LECTURER: Dr. Habbazoka
DUE DATE: 1st September 2011

1CONTENTS

1CONTENTS1
2INTRODUCTION2
3RULES RELATING TO MONEY LAUNDERING3
3.1Bank of Zambia Anti-money Laundering directives, 2004 part III to VII3 3.2Prohibition and Prevention of Money laundering Act, 2001 parts IV and V.4 3.3Anti-Money Laundering Authority (AMLA).5

4EXAMINING THE RULES RELATING TO MONEY LAUNDERING5
5CONCLUSION6
6REFERENCES8

2INTRODUCTION

Money Laundering is the system where funds that illegally acquired or generated from criminal activities are brought in the normal money circulation to hide the tracks that it was illegally sourced. The word Launder is a word derived from the word laundry, i.e. to clean up. Money laundering activities involve generating funds from a wide range of criminal activities which include: •illegal drug trafficking,

prostitution,
extortion, robbery,
counterfeit currency issuing,
false accounting e.t.c
Money laundering has also known to further fund even worse crimes against humanity like that of terrorism and wars that intend to take over incumbent governments. In Zambia, Money laundering and other Financial crimes are enforced by the Anti-Money Laundering and Investigations Unit {AMLIU) of the Drug Enforcement Commission and the Anti-Corruption Commission (ACC) as well as the Ant-Frauds Department of the Zambia Police. Further, the government is intending to create yet another agency to fight financial crime called Financial Intelligence Unit (FIU).

Of course there a number of questions that arise as to why the government should create another agency. Before the FIU is created, a number of factors have to be considered. •Would an FIU add value to the investigations of financial crimes in the country? •How different would the FIU be from the Anti-Money Laundering Investigations Unit (AMLIU)? • What is its composition going to be like and where is it going to be placed? The Bank of Zambia? The Anti-Corruption Commission? The Ministry of Finance? The Judiciary or the Zambia Police or the Drug Enforcement Commission? • Is it going to be a stand-alone government agency to be established with a new organizational structure? 3RULES RELATING TO MONEY LAUNDERING

The rules relating to money laundering are enshrined in the Bank of Zambia Anti-money Laundering directives, 2004 part III to VII as well as in the Prohibition and Prevention of Money laundering Act, 2001 parts IV and V.

3.1Bank of Zambia Anti-money Laundering directives, 2004 part III to VII

These rules entitled as “Customer due diligence and other obligations” are:

Anti-money laundering measures and practices
Customer identification
Verification of individual customers' names and addresses •Verification of corporate bodies’ names and addresses •Trusts
Record keeping
Reporting of suspicious activities
Money laundering reporting officer
Obligations of employees
Obligations of regulated institutions

Further the directives also contain other parts that include: •Co-operation with law enforcement agencies enshrined in part IV •Obligations of board and principal officers of regulated institution and Annual compliance report that are both enshrined in part V.

Part VI enshrines Staff training and other obligations that include •Staff training
Programme for staff training
Staff not to disclose investigations to customer
Staff to report money-laundering offence in which involved

Part VII tilted General includes:
External auditors
Offence and penalty
Coming into force of the Directives
3.2Prohibition and Prevention of Money...
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