Transparency International Zambia (TI-Z) has noted the release this week of the Annual Report for the year 2020 by the Financial Intelligence Centre (FIC). TI-Z has taken time to analyze this report, whose release was eagerly being awaited by the general public and key stakeholders.
Our general view is that the 2020 FIC report is appallingly shallow, lacking in detail and way too generalized to be of any meaningful value for effective public or stakeholder engagement, or indeed for the sort of follow up action that would be required to address the issues it has attempted to report on. We have reached this conclusion due to a number of reasons, which we are very happy to elaborate on.
1. Change in methodology and presentation of the report
We have noted with deep concern that the 2020 FIC report is in fact not a Trends Analysis report but merely an annual report. While this may seem to be an inconsequential change at face value, it has wider implications for the issues that the FIC Trends Analysis reports have highlighted in previous years. TI-Z would like to bring to the public’s attention the fact that the FIC has produced a Trends Analysis report every single year since 2015, with the 2019 one that was released last year being the 6th Trends Analysis report that has been produced. We therefore find it unacceptable for the FIC to suddenly change goalposts and not present a Trends Analysis report for the year 2020, substituting it with this bland annual report that does very little to allow members of the public and stakeholders to compare the trends when it comes to issues of money laundering, corruption and terrorism financing over the last several years.
TI-Z therefore challenges the FIC to give the Zambian public a justification for this fundamental change in not providing a Trends Analysis report, which has been the norm for the last six years.
2. Lack of depth on the issues raised in the report
The 2020 annual report has provided a lot of information focusing merely on numbers without going into the details behind the numbers. There is for example mention of the 18 analysed reports of corruption with a value of K2.2 million. The report is deafeningly silent on what the individual composition of these 18 reports is. Who is involved in these cases? What is their nature exactly?
The report further talks about Suspicious Transaction Reports related to large or unusual cash deposits or withdrawals. It however fails to clearly state the extent to which a deposit or withdraw becomes suspicious. What is the threshold for transactions being suspicious either in withdraw or deposit form?
In addition, it would have been useful for the report to give details of how the suspected transactions were followed up, as mere suspicion means nothing. For instance, what was the ratio of criminal transactions of the suspected reports received to their value?
The lack of depth in the report is compounded by the complete absence of any case studies showing corruption, money laundering and fraud, as well as the involvement of Politically Exposed Persons in these transactions. Again, TI-Z finds it totally unacceptable for the FIC to do away with such an important element of their reporting, and we challenge them to provide an explanation and justification for why this report does not have a single case study on any of the issues reported on.
3. Lack of follow up on previously reported issues
Because of the abrupt change in the methodology and presentation of the report as outlined in (1) above, the 2020 report does not provide any details on how issues reported in the 2019 Trends Analysis report have been followed up, making it likely that the issues have merely been brushed aside and not been addressed at all. For instance, one of the key issues raised in the 2019 Trends Analysis report was the environmental crimes in relation to the Mukula tree trade. The 2019 report made three key recommendations for government to implement, along with many other recommendations touching on tax evasion, corruption, and use of cash in commerce, among others. None of these recommendations have been reported on in this 2020 report, which in our view raises serious doubts about the extent to which the FIC is really interested in seeing progress being made on the issues it raises. This also effectively makes the 2020 report a baseless output that doesn’t make any reference to baseline data of any sort to inform any reported progress on the current issues it has raised.
On the whole, TI-Z is concerned about a worrying trend that we have noticed since the release of the FIC’s 2018 Trends Analysis report in 2019. Zambians will recall that in the wake of the release of that report, whose contents did not sit well with government, President Edgar Lungu publicly attacked the FIC and accused it of spreading rumors and being on a witch hunt which was poisoning the country. We have noted that the two reports that the FIC has released since that public rebuke have both depreciated in quality, suggesting that the FIC is slowly being cowed into submission to the narrow interests of politicians rather than those of the wider Zambian citizenry. We are worried that the trust and reputation that the FIC has cultivated in the Zambian public as an institution that delivers on its mandate without fear or favour will quickly get eroded, which will be a real shame because a professional, strong and truly independent FIC is an absolute necessity if we are to make progress not just in the fight against corruption, but generally in adhering to the principles and ideals of good governance.
Despite these glaring weaknesses in the 2020 report, we would like to applaud the increase in the reports of suspected corruption to the FIC, which supports the Public Interest Disclosure (Protect of Whistle Blowers) Act. We also note the challenge of low staffing levels mentioned in the report, and therefore urge government to provide adequate resources to enable the FIC not only to have the required staffing levels, but to also be equipped with modern and appropriate capacities and skills to deal with different dimensions of corruption. TI-Z further calls for the refinement of the Financial Intelligence Centre Act to give the FIC an enhanced mandate to enforce its findings.
Sampa J. Kalungu
TI-Z Chapter President
