HARARE - Sep 15 2010 18:06

http://www.newsday.co.zw/article/2010-09-15-aml-the-response-to-money-laundering

Last week we saw how government decided to pass up a US$50 billion loan due to allegations of money laundering on the part of the would-be lender.

We defined money laundering as the process of making criminal assets appear legitimate, and saw that the assets may not necessarily be in the form of money but could be anything of value.

We saw that sometimes the assets are not proceeds of crime, but could be intended for use in future crime. Drugs, corruption, organised crime, fraud, terrorism and civil war were identified as the main drivers of money laundering.

We concluded by discussing the three-stage cycle of placement, layering and integration, through which criminal assets are typically laundered.

Having familiarised oneself with the concept of money laundering and appreciate its negative impact on the well-being of the financial sector, one would naturally want to know how money laundering should be combated.

Anti-Money Laundering (AML) is a term mainly used in the financial services sector to describe the legal controls that require financial institutions and other regulated entities to prevent or report money laundering activities.

Today, most financial institutions - and many non-financial institutions - are required to identify and report transactions of a suspicious nature to the financial intelligence unit in their respective country.

Zimbabwe’s financial intelligence unit is called the Financial Intelligence Inspectorate and Evaluation Unit (FIIE).

Every bank is required to perform due diligence by verifying a customer’s identity and monitoring transactions for suspicious activity.