GAMING REGULATORS AFRICA FORUM 12 th Annual Conference

GAMING REGULATORS AFRICA FORUM 12 th Annual Conference Accra, Ghana: July 2016 Anti Money Laundering, Counter Financing of Terrorism and Human Trafficking Oliver Chiperesa Deputy Director, Financial Intelligence Unit (Reserve Bank of Zimbabwe)

Presentation overview The global AML/CFT framework and the FATF Forty Recommendations Terrorist Financing, Money Laundering and the 21 predicate offences Human Trafficking as a Money Laundering predicate offence Implementation of AML/CFT and Anti Human Trafficking measures in Zimbabwe 2

The Global AML/CFT Framework and the FATF Forty Recommendations Globally, Anti Money Laundering and Counter Financing of Terrorism (AML/CFT) Standards are championed by the Financial Action Task Force (FATF). Every country is “required” to be a member of the FATF itself or one of eight FATF-Style Regional Bodies (FSRBs). The AML/CFT global standards for countries are set out in the FATF Forty Recommendations. The FATF Forty Recommendations set out the detailed AML/CFT standards and measures which countries should put in place in order to effectively prevent, detect and prosecute cases of ML, TF and related predicate offences and, ultimately, deprive criminals of ill-gotten assets. 3

The Global AML/CFT Framework and the FATF Forty Recommendations Countries should have measures in place, to ensure that financial institutions and Designated Non Financial Businesses and Professions (casinos included) carry out adequate due diligence on customers to prevent, detect and report suspected cases of ML, TF and related predicate offences. Countries are evaluated periodically, either by the FATF or the respective FSRBs, to assess the level of compliance with, and implementation of the Forty Recommendations. Countries that are found to have significant deficiencies and that do not take measures to address the deficiencies, risk imposition of varying kinds of measures against their financial sectors. Ø The measures can hinder correspondent banking relationships, among other consequences. 4

Terrorist Financing, Money Laundering and the 21 Predicate Offences Recommendations 3 of the FATF Forty Recommendations requires countries to ensure that the offence of money laundering is criminalized, in compliance with the requirements of the United Nations Convention on Transnational Organized Crime (Palermo Convention) Similarly, Recommendation 5 requires that financing of terrorists and terrorism be criminalized in line with the requirements of the International Convention for the Suppression of Financing of Terrorism The FATF Standards further stipulate 21 categories of offences which can generate profit for criminals and which must be criminalized by each country. These are referred to as predicate offences ML is a derivative offence, i. e. it can only take place after the commission of a prior (predicate) offence 5

Human trafficking as a ML predicate offence Human trafficking (also known as Trafficking in Persons), is one of the 21 prescribed categories of offences. Every country is required to have the offence of human trafficking in its statute books. One of the ultimate objectives of AML/CFT measures is to deprive criminals and their associates, of profits of crime. If human trafficking (or any predicate offence, for that matter) is not an offence under a country’s laws, the authorities would not be able to confiscate any proceeds arising from such an activity. Similarly, the country may not be able to cooperate with other countries in combating trans-border human trafficking. 66

Human trafficking as a ML predicate offence Ø As part of the requirement to criminalize human trafficking, along with the other 20 predicate offences, countries are required to ratify and domesticate the International Convention Against Transnational Organized Crime together with all relevant protocols under the Convention. Ø Countries are especially required to ratify the Protocol to Prevent, Suppress and Punish Trafficking in Persons and domesticate its provisions. 77

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe Ø Zimbabwe is a member of the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG), which is one of the eight FATF-Style Regional Bodies. Ø ESAAMLG was formed in 1999, with Zimbabwe as one of the founding members. Ø Zimbabwe implements AML/CFT measures as set out in the FATF Forty Recommendations, and is engaged in efforts to continuously strengthens its AML/CFT systems. Ø In June 2015, Zimbabwe became only the third country in Africa (after Namibia and Malawi), to complete a Money Laundering and Terrorist Financing National Risk Assessment, a mandatory requirement under the FATF Forty Recommendations since 2012. 8

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe Ø In line with FATF Recommendation 29 which requires every country to have a Financial Intelligence Unit (FIU), Zimbabwe established its FIU in 2004, as a Unit within the central bank, making it one of the first FIUs in the region. Ø The FIU is responsible for AML/CFT co-ordination in the country and was responsible for successfully coordinating the National Risk Assessment exercise from July 2014 to June 2015. Ø The FIU has overall responsibility for AML/CFT supervision of financial institutions and Designated Non Financial Businesses and Professions (Casinos included), working in close cooperation with the respective sector regulators. Ø In Zimbabwe, financial institutions have a good understanding of, and implement AML/CFT requirements. Ø There is now shift of focus in order to also make DNFBPs understand implement their AML/CFT obligations. Progress has been made but a lot of work is still needed. 9

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe Ø As is the case with all countries in the region, capacity and resource constraints continue to hamper progress in AML/CFT implementation. Ø Public institution stakeholders, including police, the FIU, financial and DNFBP sector regulators have to undertake their tasks with scant resources. Ø Zimbabwe recently underwent assessment under the ESAAMLG Second Round of Mutual Evaluation process. Ø The assessment report is expected to be finalized and adopted when Zimbabwe hosts the next ESAAMLG 16 th Council of Ministers and 32 nd Task Force of Senior Officials meetings (Victoria Falls: 28 August to 3 September 2016). 10

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe Ø In 2013, Zimbabwe undertook a comprehensive review of its AML/CFT legislation to address deficiencies that were listed when the country was assessed in 2006 under the ESAAMLG First Round of Mutual Evaluation. Ø Because of the recent nature of the legislative review, Zimbabwe’s AML/CFT legal framework is now one of the most up-to-date in the region. Ø Zimbabwe has now also ratified and domesticated relevant international instruments relating to human trafficking, culminating in the passage of the Trafficking in Persons Act on 2014. 11

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe In line with the provisions of the Act, Zimbabwe has put in place a Trafficking in Persons Inter Ministerial Committee, to coordinate the national efforts to combat trafficking in persons. Ø The Committee, under the chairmanship of the Ministry of Home Affairs, is made up of various state institutions identified as having a key role in human matters, including the Zimbabwe Republic Police, National Prosecuting Authority, Financial Intelligence Unit, Ministry of Heath, Department of Social Welfare, among others. Ø The Committee recently came up with a Trafficking in Persons National Plan of action Ø In February 2015, Zimbabwe was removed from the FATF’s list of countries that are identified as having strategic AML/CFT deficiencies, having been listed in 2011 Ø 12

Implementation of AML/CFT and Anti-Human Trafficking Measures in Zimbabwe Ø In recognition of the efforts made by Zimbabwe in strengthening its AML/CFT framework, consistent with the Forty Recommendations, the FATF took a decision in February 2015, to remove Zimbabwe from the FATF’s list of countries that are identified as having strategic AML/CFT deficiencies. Ø The country had been put on the list in October 2010. 13

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