Namibia was greylisted by the Financial Action Task Force’s (FATF) Plenary on Friday and placed under increased monitoring due to concerns over effective implementation and compliance with international Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Combatting Proliferation Financing (CPF) standards.
According to the Financial Intelligence Centre, Namibia was found lacking in AML/CFT/CPF effectiveness in six of the 11 immediate outcomes assessed regarding effectiveness.
“Effectiveness compliance focuses on a country’s ability to demonstrate an effective framework for protecting the financial system from ML/TF/PF abuse, considering the specific risks it faces. It further delves into the practical and effective implementation and enforcement of laws and regulations adopted to protect the financial system,” said Johannes !Gawaxab, Chairperson of the AML/CFT/CPF Council.
He said out of 72 recommended actions, Namibia has made progress by addressing 59 action items, with 13 action items within the domains of six national AML/CFT/CPF combatting stakeholders remaining outstanding, requiring urgent attention.
“To ensure Namibia and the identified AML/CFT/CPF combatting stakeholders promptly address remaining identified shortcomings, the FATF prescribed an agreed-upon Action Plan, outlining specific measures to be implemented,” !Gawaxab said.
He said according to the FATF, greylisting publicly announces deficiencies in a country’s ability to effectively counter ML/TF/PF.
“A FATF Greylisting designation calls for enhanced due diligence and, where appropriate, counter-measures from the global community to mitigate ML/TF/PF risks posed by a country’s financial system,” !Gawaxab said.
“Recognizing the urgency of the situation, the National Focal Committee, comprising representatives from public and private sector stakeholders, will enable an Execution Plan to execute the FATF-prescribed Action Plan and ensure the timely addressal of the outstanding action items. This comprehensive approach ensures coordinated efforts to strengthen Namibia’s AML/CFT/CPF regime and restore international confidence in Namibia’s financial system.”
Despite Friday’s greylisting, !Gawaxab said Namibia’s financial system remains sound, stable, and well-capitalized.
“With robust due diligence measures in place, transactions between Namibia and the global community will continue to be safeguarded. Businesses and citizens can proceed with confidence in conducting transactions internationally. Moving forward, we are resolute in our commitment to closing the identified gaps swiftly, taking cues from neighboring countries that have effectively managed similar situations. We remain positive and enthusiastic about the future of Namibia’s financial system,” he said.
As a signatory to various United Nations Conventions and obligated by mandatory resolutions under Chapter VII of the UN Charter, Namibia is tasked alongside other UN Member States to actively and effectively prevent and combat Money Laundering (ML), Terrorist Financing (TF), and Proliferation Financing (PF).
These obligations aim to safeguard the integrity and stability of the financial system and contribute to overall safety and security.
In 2022, Namibia underwent a second mutual evaluation by the FATF in which shortcomings in both technical (laws) and effectiveness (implementation) compliance were identified.
This prompted the FATF to provide the country with a twelve-month period for remediation, which concluded in October 2023.
Established as a global standard-setting body under the UN, the FATF encapsulates these obligations in its 40 Recommendations on ML/TF/PF, conducts mutual evaluations of member countries, and publicly releases reports assessing country’s compliance levels.
The IMF notes that FATF Greylisting negatively impacts up to 6% of a listed country’s GDP, while entities engaging with Namibia may also be required to conduct enhanced due diligence, leading to increased costs and scrutiny.
