Ethiopia: Govt Urged to Take Measures That Curb Illegal Financial Flows


Addis Ababa — The government needs to take a number of measures to reduce the effects of illegal financial transactions that have been eroding the national economy, a scholar told ENA.

A study conducted in 2017 by the Global Financial Intelligence revealed that Ethiopia loses two billion US dollars annually due to illicit financial flows.

About 26 billion dollars left the country unlawfully between 2004 and 2013, the same report discovered.

Civil Service University economist and lecturer Tesfaye Chofana warned that such illegal transactions can bring far reaching devastating impacts and consequences on the national economy.

He stated that “illegal financial transactions which are rampant in Ethiopia take various forms, including tax evasion, smuggling hard currency into the country, opening secret financial accounts abroad, getting into illegal financial transactions with foreign companies to evade direct tax, printing fake foreign and local currencies.”

According to the scholar, the government needs to further strengthen the capacity of national institutions of justice and strengthen its partnership with international anti-money laundering organizations as money laundering is particularly conducted at the global level.

Communications Affairs Director of the Ethiopian Financial Intelligence Center (FIC), Endale Assefa agrees that money laundering is both a national and global crime.

The director further revealed that the International Cooperation Review Group (ICRG), which is monitoring and evaluating the performance of money laundering of its 18 member African countries, has identified 13 most vulnerable countries on money laundering; and Ethiopia is one of them.

“The ICRG had identified 19 money laundering vulnerability areas that are to be promptly addressed by the government of Ethiopia over the next two years,”FIC director Endale said, addingthat”Ethiopia has successfully met the requirements for 15 standards and is working on 4 requirements that are related to basic legal provisions and specific laws that the country has to put in place.”

Unless these requirements are met, Ethiopia would not be able to engage in foreign direct investments and foreign trade free of money laundering as well as transactions with international financial institutions and banks, according to the director.

Ethiopia’s Financial Intelligence Center is, therefore, working closely with international organizations like the International Cooperation Review Group (ICRG), and Financial Action Task Force (FATC) with a membership of 208 countries, Endale added.

A performance report issued by the center in 2017 indicates that FIC has processed, analyzed and investigated 384 suspicious financial transactions and referred 10 money laundering cases to law enforcement bodies and courts of law.

It also conducted supervision and money laundering vulnerability studies on 15 financial institutions including 3 local banks, 6 real estates, precious stones exporting firm and 5 NGOs, it was learned.

Despite these small achievements, the center is reportedly facing a number of challenges. “Lack of technically capable professionals in the field, low awareness on the issue of money laundering at national level, lack of access to modern technological innovations to monitor illegal online money laundering crimes, lack of quality reporting and inefficiency on preparation of reports on the part of local stakeholders are few of challenges the center is currently facing,”the director pointed out.

The Financial Intelligence Center was established in 2009 to protect the nation from global and local finance related clandestine crimes like financing terrorism and attempts to legalize bad money by siphoning it into legal transactions.

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Publish date : 2019-02-08 09:48:55

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