Niël Terblanché
Namibia has made considerable progress in its efforts to align with international anti-money laundering standards, successfully addressing 59 out of 72 action items.
Despite this significant achievement, the country according to the Minister of Finance and Public Enterprises, Iipumbu Shiimi, stands at a crossroads, facing potential blacklisting and increased scrutiny due to the remaining 13 unresolved challenges.
Since December 2022, the Namibian government has been rigorously working to meet the benchmarks set by the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) and the Financial Action Task Force (FATF), a global body monitoring money laundering and terrorist financing.
The FATF, in its Mutual Evaluation Report (MER), previously identified vulnerabilities within Namibia’s financial and legal frameworks, exacerbated by high-profile criminal cases such as the Fishrot corruption scandal, VAT scams, and SME Bank fraud.
The MER stressed that a significant portion of illicit financial flows was channelled through banks, unit trusts, and asset management services, with certain non-financial businesses and professions, including legal and real estate services, posing a high risk for money laundering activities.
In response to these findings, Namibia underwent a comprehensive mutual evaluation, culminating in the adoption of the Namibia Mutual Evaluation Report by the ESAAMLG Council of Ministers in September 2022.
This led to a review by the FATF’s International Cooperation Review Group (ICRG), given the size of Namibia’s financial sector, which exceeds five billion USD.
To address the FATF’s recommendations, according to Shiimi, Namibia enacted four new laws and amended nine existing ones by August 2023, alongside forming a dedicated Project Team to oversee the implementation of these legal and policy frameworks.
Namibia’s final progress report was submitted to the FATF ICRG towards the end of 2023, with a subsequent engagement in Abu Dhabi in January 2024, where Namibia demonstrated its dedication to rectifying the identified deficiencies.
Shiimi indicated that preliminary outcomes from this engagement indicate that Namibia has passed the technical compliance test and made notable progress in addressing the effectiveness of its anti-money laundering measures.
The unresolved action items may, however, place Namibia on the FATF’s list of jurisdictions under increased monitoring, pending the outcome of the FATF ICRG joint group meeting scheduled for the coming days.
The Minister gave the assurance that Namibia is committed to finalizing an Action Plan with the FATF ICRG to address the remaining issues, signalling a crucial moment in Namibia’s journey towards full compliance with international anti-money laundering standards.
Shiimi made it clear that ongoing efforts to rectify the situation are clear evidence of Namibia’s determination to strengthen its financial integrity and combat money laundering, despite the challenges ahead.
