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The Financial Intelligence Center (FIC) has raised concerns about the increasing use of Zambian signatories by foreign-controlled entities to obscure the identities of ultimate beneficial owners.
FIC Director-General, Clement Kapalu, highlighted this trend as a significant issue, creating an additional layer of obscurity that complicates efforts to trace financial activities.
Kapalu also pointed out the growing use of shell companies for short-term operations to evade detection, allowing financial fraud, tax evasion and money laundering to occur more easily under a temporary legal façade.
During the 2nd Banking Industry Symposium organised by Stanbic Bank held at Lusaka Intercontinental Hotel on Wednesday, Kapalu noted the rise in mobile wallets being used for large cash deposits due to their anonymity and ease of transaction.
This trend had made them attractive for illicit activities, prompting a need for increased scrutiny.
Additionally, Kapalu mentioned the misuse of mobile agent wallets for money transfers, deposits, and withdrawals, which bypass regulatory thresholds.
These wallets, with higher transaction and holding limits, are increasingly exploited for nefarious purposes, highlighting the necessity for stricter regulation.
Kapalu also reported a surge in Suspicious Transaction Reports from Virtual Asset Service Providers (VASPs), often related to cyber fraud scams.
These scams typically involve impersonation of reputable entities, fund transfers into cryptocurrencies like Bitcoin, and subsequent transfers to external wallets.
He further noted issues such as compromised emails, stolen credit cards sold on the dark web, and cyber attacks perpetuated by financial institution employees.
The FIC also observed a rise in mobile scams involving Zambian nationals deceiving individuals in neighboring countries.
Kapalu emphasized the urgent need to rethink and redefine business models to protect against abuse by perpetrators of financial crimes.
Stanbic Bank Chief Executive Officer, Mwindwa Siakalima, stressed the importance of a dynamic and agile response to evolving financial crime methods to maintain a robust financial system.
He noted the increasing prevalence of these issues online.
Sandy Manza, Accountant General at the Ministry of Finance and National Planning, reaffirmed government’s commitment to collaborating with stakeholders to combat illicit financial flows and foster a conducive environment for growth.
Bankers Association of Zambia Board Chairperson, Lowani Chibesakunda, highlighted the opaqueness surrounding money laundering issues and the need for sharing best practices among industry players.
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