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FIC Keep Flagging More Potential Tax Evasion-Related Crimes

By: Nghiinomenwa-vali Erastus

From April to August this year, the Financial Intelligence Centre has flagged 47 activities and transactions within the country’s financial system as predicate crimes/offences.

As a result, the financial watchdog has prepared 47 spontaneous report/intelligence disclosures to various law enforcement agencies for their further investigations and actions.

Spontaneous intelligence reports are disclosures of intelligence or information made by the Financial Intelligence Centre (FIC) to other combatting agencies or authorities.

From the 47 intelligence disclosures prepared by FIC, more than half (24) have been classified as potential tax predicate offences/crimes, and they were submitted as red flags to NamRa.

“Disclosures to NamRA are on account of potential tax evasion and such related irregularities that may have been observed,” the financial watchdog wrote, with NamRa’s confirmation to determine certainty as statistics remain limited to FIC analysis and dissemination.

A predicate offence or predicate crime – refers to a crime which is a component of a larger crime-the larger crime would be money laundering or financing of terrorism.

In a financial context, the predicate offence would be any crime that generates monetary proceeds.

“Potential tax-related offenses featured as the leading predicate offense followed by Contravention of Banking Institution Act – Illegal Deposit Taking then fraud,” the FIC reported in its reports.

They explain that despite their analysis and red flags, potential tax-related offences need further certainty from NamRa; as a result, the revenue agency was the biggest beneficiary of the FIC spontaneous disclosures.

NamRA received the highest number of disclosures in the period under review, followed by the Bank of Namibia (BoN) with 10 and Nampol with 8.

The FIC explained that disclosures to NamRA are on account of potential tax evasion and such related irregularities that may have been observed.

Meanwhile, disclosures to the BoN could primarily be around potential contraventions of the Banking Institutions Act and/or the Exchange Control Rulings and Regulations.

As of 30 June 2022, the FIC had a total of 1 463 active entities registered as Accountable and Reporting Institutions under its supervision, excluding institutions under the supervision of Namfisa.

The disclosures are derived from various suspicious transaction reports (STR) and suspicious activities reports (SAR) that were received from accountable and reporting institutions.

For the five months, the FIC received a total of 74 SARs from accountable and reporting entities.

Overall, in the reporting period, the banking sector filed most of the SARs among all sectors.

As for suspicious transaction reports, the Intelligence Centre received 463 of these reports for further analysis by the end of August 2022.

The banking sector continued to file the highest volume of STRs, followed by Authorised Dealers with Limited Authority (ADLAs).

The Center has also highlighted that it has issued several intervention orders/restriction orders of monetary values involved.

In the period under review (between April and June 2022), it has issued intervention/restriction orders involving a total amount of N$322 276.

It is important to note that the Receiver of Revenue’s Tax Assessment outcomes (by the Namibia Revenue Agency) emanating from the FIC’s Spontaneous Disclosures were not included in this report.

Additionally, this report did not include preservations and forfeitures as a result of such disclosures disseminated by the FIC to the Office of the Prosecutor General.

The value of restricted orders provided herein, therefore, only speaks to data in the domain of the FIC.

For the five months, the FIC conducted 32 on-site and off-site assessment activities, respectively.

The assessments inform the nature, frequency and extent of relevant supervisory activities employed in supervision.

Accordingly, the assessments revealed that Banks, Customs Clearing and Forwarding Agencies, Motor Vehicle Dealers, and Non-Profit Organisations are considered high-risk sectors for potential money laundering.

During the period under review, the FIC trained 69 institutions and registered 68 Accountable and Reporting Institutions.

The Intelligence Center has also indicated that it has received a number of requests for intelligence in the period under review.

There were a total of 40 Incoming Request-Domestic (IRDs) from domestic agencies wanting more insights on various financial dealings through the country’s financial system, while 10 of the request for information were from international agencies (Incoming Request-International IRIs).

Incoming requests reflect stakeholders searching for information/assistance from the FIC- such can be from local or international stakeholders.

The body indicated that it would increase existing efforts to further outline to competent authorities nationally the value addition FIC’s output can have to existing cases under investigation by such authorities, plus the value of informing them (Domestic and International) of criminal activities which would otherwise have gone unnoticed.

The FIC has requested stakeholders to consider such areas and implement measures to positively impact the national Anti-Money Laundering, Combatting the Financing of Terrorism, and Proliferation framework. Email: erastus@thevillager.com.na

Nghiinomenwa-vali Erastus

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