Combating illicit financial flows and related corruption in Africa: towards a more integrated and effective approach

The relationship between anti-money laundering and anti-corruption strategies is a key issue for developing countries. This paper presents an overview of measures in place to combat both corruption and money laundering in Botswana, Tanzania, and Zambia.

The document demonstrates that corruption and money laundering are both considered conducive to financial outflows from the countries in this study and from developing countries in general. Findings contain:

• corruption and money laundering cannot be effectively addressed solely by the specialised agencies mandated to deal with them
• the risk that corruption poses to anti-money laundering strategies can best be appreciated by examining the general features of an AML (anti-money laundering) framework
• in order to effectively contain the threat of money laundering as a facilitator of corruption, there is a need to confront context-based particularities, notably the prevalence of cash transactions in the economy
• weaknesses to be addressed include inappropriate focus on banks in cash-dominant economies, weak enforcement of AML law, risk-based due diligence, Low capacity to investigate money laundering cases

The authors conclude that governments and donors in developing countries should work to build the capacity of the financial intelligence units (FIUs). They should also strengthen their collaboration with anti-corruption agencies and with complementary institutions and partners at home and abroad.

Recommendations encompass:

• clarify the roles of anti-corruption agencies in the AML framework
• clarify the roles of FIUs in relation to other agencies with an interest in AML
• strengthen monitoring systems for those who determine the responsibilities of reporting institutions in conducting due diligence in compliance with international conventions
• provide assistance beyond capacity building, and provide support to FIUs