Money laundering trap: Why you are not necessarily safe

Dar es Salaam. You do not necessarily have to be involved in an illegal deal worth billions of shillings to face money laundering charges in court.

If and when state organs decide to strictly observe in the letter the anti-money laundering legislation, people from all walks of life would easily fall in the trap, legal experts warn.

In recent days, cases of money laundering involving transactions of Sh200,000 or less have hit the headlines - igniting debate on whether or not it was realistic for a person involved in such a transaction to end up with a money laundering case to answer in court.

Legal experts who spoke to The Citizen say the current legislation on money laundering contains a section of the Act which addresses 25 offences that may constitute money laundering charges - and without mentioning a specific amount of money that one may have transacted.

Money laundering is a serious criminal offence under the country’s Anti-Money Laundering Act, 2006 as amended from time to time.

According to a practising lawyer, Mr Emmanuel Nkoma, the legal grounds used in money laundering cases are based on predicate offences as mentioned in Section 12 of the Anti-Money Laundering Act, 2006.

The Act defines money laundering as “engagement of a person or persons, directly or indirectly, in conversion, transfer, concealment, disguising, use or acquisition of money or property known to be of illicit origin, and in which such engagement intends to avoid the legal consequences of such action, and includes offences referred to in Section 12.” Mr Nkoma says, “For example: theft is one of the predicate offences. So, even if you were involved in a theft of a chicken worth, let’s say, Sh5,000 - and use that money for personal consumption - you would be liable to a money laundering charge.”

He added: “Section 12 includes most offences that are committed by people every day. Issues of corruption, forgery, illegal fishing and environmental crimes are being committed every day.”

Other predicate offences include sexual exploitation, (including sexual exploitation of children); illicit trafficking in stolen or other goods; counterfeiting; armed robbery; kidnapping; illegal restraint and hostage-taking.

Others are smuggling; extortion; piracy; hijacking; insider trading; market manipulation; illicit trafficking; dealing in human organs and tissues.

Yet others are terrorism, including terrorist financing; illicit arms trafficking; participating in an organized criminal group; racketeering; trafficking in human beings and smuggling immigrants.

Also included are poaching; tax evasion; illegal mining - and any other offence which the minister may, by notice published in the Gazette, declare, whether committed within the national boundaries of the United Republic or outside the country.

When he spoke to The Citizen, Mr Ambrose Mkwere said even people who generate income through illegal means such as drugs, and then invest it in or through a known legal enterprise are liable to money laundering charges.

“Some people tend to “clean” their money by investing it in a legal business,” he said.

Advocate Mkwere said awareness on money laundering offences needs to be spread far and wide across the country through mass media, arts and training because it is direly needed.

‘Unbailable offences’ have been among the most talked about criminal offense in Tanzania, with scores of people - ranging from politicians and journalists to human rights activists and business personnel - languishing behind prison bars over such charges.

“There should be print and broadcasting programmes to educate the general public on what the money laundering charge entails. The programmes should also be extended to schools,” he said.

The ‘money laundering’ definition also raised questions with some law practitioners as to whether or not criminal liability for money laundering requires proof that the accused should have had knowledge of such predicate offences.

For example, tax evasion is one of the predicate offences.

Asked if a transaction made between two parties and where no tax due is paid to the Tanzania Revenue Authority (TRA) is subjected to money laundering, the Authority refused to comment.

TRA’s Taxpayer Services and Education director Richard Kayombo, said: “We cannot speak on money laundering because it not under our jurisdiction. But, any business transaction done should result in some tax contributions under law.”

The National Money Laundering and Terrorism Financing Risks Assessment Report 2016 published in 2019 stated that areas which are mostly targeted when it comes to money laundering are housing projects, lending, selling vehicles and gemstone deals.

The report called for the amendment of the Anti-Money Laundering Act, 2006 (as amended in 2012), and the Anti-Money Laundering and Proceeds of Crime Act, 2009 to address the deficiencies.