FIC Report
FIC Report

By Isaac Mwanza

Introduction

Once again, there is some misconception by a certain section of our society that the Report published by the Eastern and Southern African Money Laundering Group (ESAAMLG) to the effect that law enforcement agencies in Zambia rely on facts passed to them by the Financial Intelligence Centre (FIC) to prosecute money laundering cases has exposed Zambia’s law enforcement agencies. This is a misplaced argument in relation to the current public discourse on whether the FIC has, based on the law that creates the institution, the mandate to publish what it calls Trends Reports – a report which covers matters that have been referred to, and may be under active investigation by Law Enforcement Agencies. This article scans the lawful mandate of the FIC to publish statistical reports to the public vis-à-vis its mandate.

Understanding the FIC and its mandate

From the outset, it is important to make it clear that both Government and those against the release of the Trends Reports have been very clear that FIC was constituted to complement and support the work of the Law Enforcement Agencies such as Drug Enforcement Commission (DEC) and the Anti-Corruption Commission (ACC), generally referred to as the “investigative wings”. Like other intelligence agencies, FIC is an important intelligence gathering wing of the Government.

The question is whether FIC, as created by Zambia’s statutory law, has the mandate to release what are known as Trends Reports in their current format. This questions requires an understanding of the laws governing these intelligence entities.

The FIC is a member of the: so-called Egmont Group, the informal international association of FIUs. World over, although FIU’s share the same core functions of receiving, analysing, and disseminating financial information to local law-enforcement agencies and foreign FIUs to combat money laundering and related activities, they differ in many ways.

The 2004 publication by the International Monetary Fund and World Bank dubbed “Financial Intelligence Units: An Overview,” provides some insightful data for citizens who seek to understand an entity like our FIC. From the outset, it is clear that, in general, an FIU is a central national agency responsible for receiving, analysing, and transmitting disclosures on suspicious transactions to the competent authorities.

Although Zambia saw the need to respond to the calls of the international community in establishing our FIC, our lawmakers had to make a decision as to the functions and the modalities of the operations our FIC which is based on Zambia’s own crime-fighting policy objectives, resources, and priorities but most importantly, they deliberately harmonised the responsibilities of the FIC with those of DEC, ACC, Zambia Police and other existing agencies involved in the fight against financial crime, including law enforcement and supervisory agencies and policy-setting government bodies.

Both the World Bank and IMF recognised in their report that the FIU must only be given the means to successfully pursue these objectives, for which it will become accountable but also that care is always taken not to give the FIU more responsibilities than it can cope with, given its expected resources. The Report stated the following: “Overlapping functions should be avoided to the extent possible, and to the extent such overlap is unavoidable, coordination mechanisms should be established to minimize conflicts and maximize cooperation between the concerned agencies.”

Little wonder then, that law enforcement agencies in Zambia, who have the primary mandate of investigating money laundering and financial crimes, would receive the reports from FIC but those reports are never treated as conclusive, in terms of the allegations of money laundering or financial crimes. No one must therefore be surprised with what the Drug Enforcement Commissioner, Ms. Alita Mbahwe, said about the FIC reports:

“…the intelligence reports disseminated [by FIC] to law enforcement agencies such as the Drug Enforcement Commission sometimes turn out to be false on enquiry leading to closure of cases, a situation which is always misconstrued as inaction by investigative wings.”

DEC and other law enforcement agencies do confirm, therefore, that FIC submits or disseminates intelligence reports to them, as required by law, but they have gone a step further to state that “sometimes” these intelligence reports “turn out to be false on enquiry leading to closure of cases, a situation which is always misconstrued as inaction by investigative wings.” This information has not been disputed by FIC because their duty ends at disseminating these intelligence reports to law enforcement agencies for these agencies to investigate each and every allegation. However, not every investigation: will result in prosecution, because in some cases, the so-called evidence, upon further in-depth inquiry, is found to be unrelated to criminal activity as suspected. That is the whole purpose of referring such “suspicious financial activities” for further detailed investigation by law enforcement agencies which are in fact equipped to make such further inquiries and investigations.

Zambia’s Financial Intelligence Centre falls into the category of what the IMF/World Bank refers to as an administrative-type FIU. The other types of the FIUs are the law-enforcement-type FIU, the judicial- or prosecutorial-type FIU, and the “mixed” or “hybrid” FIU.

As an administrative-type FIU, Zambia’s Financial Intelligence Centre, is an autonomous body but with a reporting line to the Minister of Finance. The main rationale for such an arrangement was to establish a “buffer” between the financial sector and the law-enforcement authorities (DEC, ACC, ZP) in charge of financial crime investigations and prosecutions.

Usually, financial institutions are faced with problematic transactions but do not have hard evidence that those receiving or sending money in sums of over US$5,000 are involved in criminal activity or in criminal organizations, therefore the financial institutions may be reluctant to disclose such transactions directly to a law-enforcement agency, out of a concern that their suspicion may become an accusation that could be based on a wrong interpretation of facts. Such doubtful transactions are disseminated to the FIC as suspicious financial activities. The role of the FIC is then to substantiate the suspicion and send the case to law enforcement agencies in charge of criminal investigations and prosecutions only if the suspicion is substantiated.

Because Zambia’s FIC is established outside the law-enforcement system, its powers are limited to receipt, analysis, and dissemination of suspicious transaction to law enforcement agencies, and has not been given investigative or prosecutorial powers. Similarly, the powers of the FIU to disclose the information contained in transaction reports – in whatever form – as narrowly defined, are limited to disclosure to law enforcement agencies only for purposes of preserving the confidential character of the information provided to FIC by financial institutions.

In short, Zambia’s FIC acts as an interface between the financial institutions, on the one hand, and law enforcement authorities on the other hand, thus avoiding the creation of direct institutional links between these institutions and law enforcement agencies while bringing disclosures to the attention of law-enforcement agencies.

In other countries where FIU’s are established the law will expressly provide for the functions of the FIU to publish statistical data on money laundering and inform the public about money-laundering and other financial issues, but the Zambian law has narrowly defined the FIC’s mandate to “educate the public and reporting entities of their obligations and inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation.” There is no mandate for the FIC in Zambia to publish even statistical data on money laundering and other financial crimes, let alone the sources and types of transactions which have been reported to FIC.

The justification provided by the FIC to release the Trends Report, as quoted in their statement on their website was that “the Trends Report on AML/CFT is intended to increase public awareness and understanding of Zambia’s AML/CFT regime. It provides a synopsis of suspicious financial transactions analysed and related financial crimes identified by the FIC during the year.”

A perusal of the FIC Act, 2010 and the Financial Intelligence Centre (Amendment) Act No. 4 of 2016, shows that there is no such mandate conferred upon the FIC by our laws in Zambia except that of educating the public and reporting entities of their obligations and inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation. The claim by FIC officials that they required by law to publish their so-called Trends Report, lacks any basis whatsoever, in the enabling law, and the question to show which part of the Act gives the FIC the authority to publish such raw data to the public has always been dodged by those who believes they have the mandate to do so.

CONCLUSION

The Zambia Financial Intelligence Centre, as can be seen above, is a very key government agency in receiving, analysing, and transmitting disclosures on suspicious transactions to law enforcement agencies who are the only competent authorities to determine whether there has been any money laundering and other financial crimes on the part of the information supplied by financial institutions. The mandate to disseminate substantiated information which the FIC receives from the bank is narrowly defined as dissemination to law enforcement agencies; dissemination to the public is not provided for or included.

As long as the FIC fails to categorically point at the law that allows them to publish their data on money laundering, the FIC should strictly abide by its statutory mandate of educating the public about money-laundering issues and reporting entities of their obligations and inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation. That is what the law states expressly and leaves no room for unjustified extensions thought up by the FIC itself.

It is clear that a reading of the enabling law, the FIC Act, leaves no room for the current debate as to whether the FIC can, or should, make public the information it disseminates to the law enforcement agencies, even in redacted form, that is without mentioning names of persons or institutions.

The FIC has no lawful mandate whatsoever to publish the intelligence assessment or information which they substantiate from financial institutions because such information is still raw data for onward transmission to the investigative agencies which are then required to investigate. To release a “substantiated suspicious report” in our environment is like throwing a duck to water or lighting a match stick in a room full of open drums of petrol.

(Disclaimer: The views in this article do not necessarily represent the views of this media nor the institutions the author is affiliated to or has membership on but represent the views of the author who is a governance and legal expert)

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46 COMMENTS

  1. You are still defending your position? That’s what sin does. …it gives you courage to proceed with what is evil/wrong

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    • Isaac Mwanza do your readers a favour. Speak to John Kasanga and Mary Chirwa. They will gladly fill you in, thanks.

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    • Is Isaac Mwanza telling us not to trust the attorney general Likando Kalaluka? Why ddnt the AG stop the whole function? Simple question for the clearly well-informed Isacc Mwanza.

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    • The inadequacy of Isaac Mwanza’s education is so clearly exposed. Sunday Chanda is another one like Isaac

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    • Isaac Mwanza… Thank you for this article.

      Geees! I commented about the FIC. I was called names just last week.

      When you are using Raw Data it is not Matured Data. You still have to look at:

      1. Measures
      2. Facts
      3. Dimensions

      The Trend Report will not be correct until when you get Insights. The Trend just shows you the behaviour and pattern.

      That itself is not conclusive in the world of (1) Data Analytics (2)Business Intelligence (3) Data Science

      It just means you have a STORY, that needs to be fully investigated.

      Just because 5 people all accuse someone that he killed XYZ does not mean the police and judge must find that person guilty.

      They have to examine evidence such as Forensics and placing the person on the crime scene.

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    • Benjamin Netanyahu ( Israel Prime Minister) was accused some years ago based on the same Trend Reports.

      He criticised the findings and accused the FIC Equivalent of Isreal to be working with the opposition.

      The went to court and embarrassingly the prosecution dropped the case. Because the Raw Data they used was out of track, which produced a false Trend Report.

      There’s fraud and stealing of money in Zambia. But it’s not get Hot Air Balloons for nothing.

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    • He has a point. I have scanned through the FIC Act, i can’t find any provision that allow them to disseminate statistical data and reports to public. If anybody can show me that mandate, will join those who say it has mandate.

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    • Zambians re opposed to intelligent debate, as u may see from many cadres here. Personally find the info to be unchallenged, not even FIC can point to law that allow them to publish statistical data to public. Anybody to show us here?

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    • The Director of FIC clearly explained that the INTELLIGENCE REPORT goes to Law Enforcement Agencies only. What is disseminated to the public is a TRENDS REPORT, which is generally a strategic overview. Is Isaac Mwanza so dull to fail to comprehend this? Why is he so worried about how the reports are disseminated and not the alarming levels of criminality being reported on? And he calls himself a Governance and Legal EXPERT!!

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    • Hasn’t Mary Chirwa told us that wht has been given to law enforcement agencies has details of names and account numbers of where the money came from and where it was sent? Could I be the only one to remember this? The public was given only aggregate figures wth no names and that’s all the public deserves bcos there’s no action they can take against the suspects.

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    • This ignorant chap again Isaac Mwanza…he reminds me of that hungry rat Tayali who pretends to fight for justice yet he has been paid by one PF official to screw another PF only for him to be called by the first PF official to stop the noisemaking by paying him.

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    • Whether FIC was wrong or right, this does not matter any more because crime have been committed by the alleged perpetrators. The Police have the mandate to investigate?

      If FIC went above the law, that’s another story.

      God bless Zambia.

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  2. Eversince this Mwanza guy became a PF cadre, after allegedly being ditched by International organizations, he has become more and more predictable. From just reading his title, you can just scroll to the bottom, and lo and behold, your prediction will be spot-on!

    Chap, just find a real job rather than continuing to torture your poor conscience.

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    • I admire his writing skills, his research, and his putting dots together tho. Guy is intelligent, no one counters his version with opposite. Question, remains: which provision of law does FIC use to disseminate statistical data in trends reports? Can’t find any too. Thinking this justifies calls for amendment of FIC Act

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  3. I agree with Isaac Mwanza. That raw data collected by FIC should only be shared with Law Enforcement Agencies not the general public. There’s need to recruit competent staff at FIC. Boma iyanganepo!

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    • UPND cadres have bitter pill to swallow coz they fail to read and understand. Its all bitterness with them. Mwanza is right. FIC has no mandate to disseminate raw data to public unless the Act is amended to give them that power

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    • The Analyzer – who publishes raw data to the public…you foooools keep coming back with the same nonsense

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    • YES, BOMA IYANGANEPO INDEED AND PROSECUTE CHIRWA AND KASANGA. THEY SHOULD EXPLAIN WHY THEY DID THIS.

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  4. This tired argument has been put to rest but there are still some stubborn supporters of criminals who keep fighting the FIC on its job. One fact is clear,whatever the FIC has recorded is there to be followed up sooner or later.Thieves,just brace for accountability and tough times ahead!!No amount of fact twisting will undo what is now common knowledge that PF is a looting machines that has impoverished Zambians and at the right time key actors in this loot must be brought to account!!

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    • HOW WOULD YOU FEEL IF ME, AND TEN OTHER BLOGGERS, CALLED YOU A DULL ANALYST? YOU WILL DEFINITELY GET MAD. JUST BECAUSE I CALL YOU THAT, DOESN’T MEAN YOU ARE DULL UNTIL A COMPETENT INVESTIGATOR CHECKS MY SUSPICION.

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    • @ Nipnak
      No body can call you “dull analyst”. Instead, they should call you “sufferer of genetically induced !mbecility”.

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  5. Why are some people so scared of the public? The FIC have adequately explained their mandate and the form and type of information they release to the public .And well meaning people who love Zambia are satisfied. But there are still those who survive through financial crime and corruption who want to do whatever it takes to eliminate FIC or at least to remove the dangers and risks FIC is now exposing them to.These are in PF,and are even resisting suggestions for lifestyle audits.Mr Mwanza ,the FIC is a very good thing and Zambians have praised it.Save us your prejudiced articles.You can submit them to the PF secretariat and State House.

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  6. I have lost respect for Isaac Mwanza he likes to sound intelligent when his really just a bag of crap.

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    • Makes the 2 of us except have lost respect for people who dont read and can’t rebut with facts. I think Mwanza is right. FIC mandate is much narrower than it is currently doing. They can’t even investigate but must pass info to be investigated. Above all, release of raw data is not part of their mandate

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  7. THAT’S WHAT COMMON THIEVES DO——- THEY TRY AND RUBBISH ALL CLAIMS, THEY TRY AND BLAME EVERYONE ELSE, THEY PRETEND THAT THEY ARE THE VICTIMS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    PROVE TO ZAMBIANS THAT THE FIC REPORT IS WRONG —- LET CRIMINAL INVESTIGATIONS TAKE PLACE BY BOTH LOCAL AND INTERNATIONAL LAW ENFORCEMENTS. IF THOSE MENTIONED ARE FOUND NOT GUILTY THEN GREAT AND IF THEY ARE THEN JAIL AWAITS !!!!!!!!!!!!!!

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  8. …“educate the public and reporting entities of their obligations and inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation.”

    The thieves want to reduce the FIC interaction with the public to mere releasing of posters like those anti corruption posters.

    FIC type units worldwide release the same kind of data to the public…….world wide.

    What is so special about the Zambian FIC releasing this data as their sister units do in other countries ????

    In all other countries the release of the FIC trends are anticipated egarly by every one except criminals.

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    • SPAKA 8

      Yes FUI are eagerly anticipated all over the world. However, the Financial Intelligence Unit [ FIU] do get things wrong time after time. Their reports are not always correct. That does not mean that I condone financial fraud in Zambia.

      I ask Zambians to read and research the International Compliance Association, which is the Global compliance body of the Financial Intelligence Unit.

      ****************
      If you research from this vast informative website, you will note admissions that they do get it wrong from all other the world including in the UK. In the same way the CIA, FBI, MI6, KGB all can get it wrong as investigative and spying units.

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  9. I have noticed with sadness that we write, comment and respond to national issues with stomach point of view than rational one

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    • What makes Mwanza look intelligent are insults he gets from us UPND cadres. we like reading his articles and play to his game. Worse still, we do so without any counter data unless someone from Diggers informs us otherwise.

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  10. U make lots of sense Mwanza. Fic is a governmental agency and must operate within its mandate. Can’t see anywhere providing for them to disseminate info.

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  11. DATA SANA MWANZA. WHICH MINISTRY LOST 6.1 BILLION KWACHA EVEN? THESE ESTIMATES BY FIC ARE MEANT TO EXCITE UPND CADRES REALLY. WHY RELEASE RAW DATA U ASKED OTHERS TO INVESTIGATE?

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  12. So long government does not address this matter, we gonna have this debate every year when FIC does what it does. So lawmakers and Govt shud look into the law and clarify it. Has ambiguity

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  13. UPND members and leaders are keenly waiting for 2020 and 2021 Trends Report to win elections. This how they consider Trends report as a treasure.

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  14. Two schools of thought have emerged with regard to the core business of FIC in relation to DEC or ACC. The public version school wants a diluted but reliable report about trends in financial transactions. The private version will not support any form of publication of financial transactions, be it diluted or concentrated. The way forward: Government must take side with the fight against corruption, fraud, theft, tax evasion, money laundering and terrorist financing. To do that, FIC must be rehabilitated and strengthened. The regional and international norms must be supported in order to eliminate financial crimes. It is the way to craete wealth, economic growth, development and prosperity.

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  15. There are two versions to this story; UPND version and its allies in support of FIC; and PF another version against FIC. Am happy Isaac is balanced up with real data.

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  16. There is no doubt that Moron, whatever you call yourself you are an enemy of the people and supporter of govt looting ti shutter the dreams if the future of this country, but wait a bit time is closing in, 2021 is near. You think we can be tolerating corruption like business as usual

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