By: Nghiinomenwa Erastus
Civil Society feels threatened by the Financial Intelligence Center (FIC), which want to tail them as they are regarded as a major risk for money laundering and the financing of terrorism.
This was revealed in a paper/report prepared by the Institute of Public Policy Research (IPPR) titled Civil Society Organisation (CSO) Sustainability Index (2020), released at the end of October 2021.
The report covered issues facing Namibian civil Society across seven dimensions: Legal Environment, Organisational Capacity, Financial Viability, Advocacy, Service Provision, Sectoral Infrastructure, and Public Image.
The report is based on the comments and scores of a panel of civil society experts combined with desk research.
According to the report, the legal environment for CSOs deteriorated moderately in 2020 as CSOs observed more concerted efforts by government bodies to monitor and control the sector.
One of those entities breathing on the neck of the CSO is the country’s financial watchdog, FIC.
The report highlight that the CSOs felt threatened by the Financial Intelligence Center (FIC), which seemed to regard them as a major risk for money laundering and the financing of terrorism”.
According to the report, the Civil Society and the financial watchdog are at loggerheads as the FIC prepared for a review of Namibia by the Financial Action Task Force in 2021. It maintained that civil Society posed a significant risk for money laundering and terrorism financing.
However, some of the CSOs interviewed for the report disputed the FIC’s proposed requirement that all nonprofit organisations register with it under the Financial Intelligence Act.
While other CSOs have subscribed to the overall aim of preventing money laundering and terrorism financing but questioned why the FIC was targeting them.
This is because “Namibia’s major money-laundering scandals concerned government-linked bodies, private companies, and politicians,” the report read.
The report revealed that the FIC was still consulting with CSOs, including churches, to persuade them to register with it and supply financial information by the end of the year.
Some civil society organisations’ feedback is that they found it challenging to meet the more stringent compliance requirements imposed by their banks in 2020, usually under anti-money laundering regulations.
The report revealed that “the requirement to file many mandatory forms posed a heavy administrative burden on CSOs with little capacity”.
The bank serving the Namib Desert Environmental Education Trust (NaDEET) threatened to close the CSO’s account when it had not filled out certain forms by a set deadline, IPPR revealed.
The CSOs also complained of worsening bureaucratic obstacles during registration.
According to what IPPR researchers gathered, both trusts and companies not for gain continued to face delays and red tape when seeking to register, update details, or deregister in 2020.
Some of the report findings are that smaller organisations such as the Eloolo Permaculture Initiative struggled to gain clarity from the authorities about regulation requirements.
Another legal constraint encountered is the Namibian Media Trust (NMT) difficulties while trying to gain national certification for its media-related training courses, which would establish NMT’s eligibility for the state subsidy scheme.
CSOs also felt pressured in 2020 by ongoing attempts to revive a government-civil society partnership policy and create an umbrella body for the whole of Civil Society.
The report revealed that a foreign development agency acting on behalf of the Ombudsman’s Office was widely seen as the main driver of the initiative.
“CSOs saw the agency as forcing the issue and were concerned that they were not involved as equal partners and the effort was overly rushed,” read the report.
The report added that the agency ignored a request for a meeting from the ACTION Coalition and set what CSOs believed were unrealistic deadlines for the agreement to be finalised and the umbrella body to be established. The initiative petered out at the end of the year.
Another finding by IPPR is that there are no legal controls on foreign funding of CSOs.
While all CSOs pay pay-as-you-earn tax on permanent employees’ salaries, they are exempted from value-added tax (VAT) except when they provide services or sell products for commercial purposes.
In 2020, several CSOs, including the Society for Family Health, complained that the government took too long to refund VAT payments, and the delays were undermining their financial viability.
Charitable, religious, and welfare organisations are exempt from taxes on income, including funds from donors.
The finance minister proposed taxing any income that charities derive from commercial activities. The government began to draft relevant legislation in 2019 and continued in this effort in 2020.
IPPR researchers also revealed that private legal services available to CSOs are costly.
The Legal Assistance Centre provides typically legal advice to CSOs on a pro bono basis; however, in 2020, its capacity to provide legal advice was severely strained when its office was closed during the lockdown. Email: email@example.com