Wed, 29 Nov 2017 14:11:13 +0000
…through corruption and bribery in mining and Gvt contracts
By Aaron Chiyanzo
ZAMBIA has lost K3 billion in suspected corruption and theft resulting from fraudulent procurement of mining and government contracts as well as transactions by politically exposed persons (PEPs) and their associates, Financial Intelligence Centre (FIC) 2016 trends report has revealed.
The FIC report also indicates that law firms, were used in a number of cases to facilitate the receipt of questionable incoming funds, with receipts structured to avoid being detected.
The report disclosed that Asian nationals were buying copper ore from small-scale miners on the Copperbelt, which they subsequently export to entities that were known to be shell companies or that are registered in tax havens.
The FIC report warns that the practice may be encouraging criminality in the region.
According to the report, another trend involved the use of cash in fraud detected through significant cash withdrawals over short periods of time and that the withdrawals were in some cases traced to candidates of a named political party.
The report indicates that the predominant offences were corruption, theft and money laundering resulting from fraudulent procurement of mining and government contracts as well as transactions by politically exposed persons
The report states that although the number of suspected corruption cases only represented 6 percent of the total number of reports received in 2016, the value of transactions was significantly high, and amounted to K3 billion.
It points out that the Centre restricted or froze two accounts with funds amounting to K2, 500,000 for suspected bribery, theft and fraud.
“Cases of corruption continued to be linked to public procurement contracts as well as transactions by politically exposed persons. The value of transactions was significantly high, and accounted for 76 percent (over ZMW 3 billion) of the total value of cases analyzed,” the report reads in part.
The report states that the funds were received on behalf of other parties including politically exposed persons, in order to conceal beneficial ownership.
It states that funds that were illegally obtained through government contracts were invested in assets and properties using proxies of politically exposed persons and some almost immediately debited through foreign currency purchases.
Meanwhile, the report also states that the Centre further observed a practice in which Asian nationals purchase copper ore from small scale miners on the Copperbelt. The report indicates that the ore was subsequently exported to entities that were known to be shell companies or that were registered in tax havens and warned that the practice may be encouraging criminality in the region.
