Behind Tanzania’s bold fight against financial crime

Tanzania had been placed on FATF grey list in October 2022, following the identification of 21 specific gaps in its legal, regulatory and institutional architecture.

But in just two years, a feat unmatched by most African countries, Tanzania managed to address all identified deficiencies, regaining international confidence and affirming its commitment to financial integrity.

At the heart of this turnaround is the Financial Intelligence Unit (FIU), the central agency responsible for coordinating Tanzania’s response to financial crimes under the Anti-Money Laundering Act of 2006, revised in 2022.

In an exclusive interview, FIU Commissioner Majaba Magana described the process as “an intense, multi-agency effort that required commitment, coordination and continuous evaluation.”

“After our President Samia Suluhu Hassan directed us to ensure compliance within the given time frame, our first task was to assess where we stood in terms of both technical compliance and real-world effectiveness,” said Magana.

“We then had to work with dozens of institutions, under the leadership of the Prime Minister and further guided by the two Chief Secretaries on both Mainland and Zanzibar. These institutions—including Parliament, law enforcement agencies, regulators, registries, the private sector and NGOs—ensured that the entire ecosystem aligned with FATF standards.”

What it took to exit the grey list

According to FATF, Tanzania made “significant progress” by fulfilling all the action items set out in its 2022 evaluation.

These included improving risk-based supervision through inspections of financial institutions and designated non-financial businesses and professions based on risk profiles.

It also involved applying effective sanctions for non-compliance, strengthening investigative and prosecutorial capacity, and demonstrating the ability to conduct complex money laundering investigations and prosecutions.

Another action item was asset recovery and confiscation. Law enforcement agencies were able to trace, seize and confiscate proceeds of crime, signalling stronger enforcement capability.

The evaluation further required Tanzania to establish a robust counter-terrorism financing framework.

This meant conducting a comprehensive terrorist financing risk assessment and launching a national strategy to counter such threats.

“Authorities showed readiness to pursue terrorism financing investigations and prosecutions,” Magana said.

For broader success, the FIU also had to raise awareness among private sector players, such as banks, insurers, lawyers, betting companies and mineral traders, on their obligations in countering money laundering, terrorist financing and proliferation financing.

Another requirement was conducting risk oversight of Non-Profit Organisations (NPOs), with a plan developed to guide outreach and ensure safeguards aligned with FATF standards.

The grey list exit strategy was a cross-cutting effort involving regulators such as the Bank of Tanzania (BoT), Tanzania Insurance Regulatory Authority (TIRA), Capital Markets and Securities Authority (CMSA), Tanzania Minerals Commission, and registries including BRELA, Registration, Insolvency and Trusteeship Agency (RITA), Zanzibar Business and Property Registration Agency (BPRA), and others from both Mainland and Zanzibar.

It also involved law enforcement agencies including the Director of Criminal Investigation (DCI), Prevention and Combating of Corruption Bureau (PCCB), Zanzibar Anti-Corruption and Economic Crimes Authority (ZAECA), Economic Crimes Centre, the Director of Public Prosecutions (DPP), Tanzania Revenue Authority (TRA), Zanzibar Revenue Authority (ZRA), and the Drug Control and Enforcement Agency (DCEA).

Independent bodies played their part too, with civil society regulators and NGO coordinators ensuring accountability and transparency.

“Each agency was assessed for both technical compliance, how well laws and regulations align with FATF’s 40 recommendations, and effectiveness, measured by real-world outcomes across 11 evaluation areas,” Magana explained.

The Prime Minister’s Office also played a key role in closing gaps on financial crimes.

“It provided strategic oversight and ensured national coherence across anti-money laundering and counter-terrorist financing efforts,” the commissioner said.

Similarly, the Office of the Second Vice President of Zanzibar was mandated to coordinate integration of Zanzibar’s institutional framework into the national AML/CFT system.

“This ensures compliance across both Mainland and Zanzibar under union-level policy,” Magana added.

The Attorney General’s Offices (Mainland and Zanzibar) reinforced the legal framework by facilitating prosecutions and asset seizure strategies, while the Chief Secretaries coordinated civil service implementation of FIU-led policies.

Ministries, including Finance, Justice, Home Affairs, Minerals, Trade and Tourism, integrated FIU priorities into sector-specific regulations, with Permanent Secretaries managing compliance and resource allocation.

This multi-layered collaboration was crucial to Tanzania’s rapid exit from the FATF grey list, combining legal reforms, institutional coordination, enforcement and union-level integration.

FIU orchestrating the system

The FIU served as the central coordinator, ensuring that every agency understood the three core FATF risks: money laundering, terrorist financing and proliferation financing.

One major challenge was the identification of natural and legal persons in a context where centralised data systems were still developing.

Key registries—including NIDA (National ID), RITA (births, deaths and marriages), TRA (vehicles and licences), BRELA, Zanzibar BPRA and the real estate authority, had to synchronise efforts to improve identity tracking and ownership transparency.

“One of the high-risk gaps was the lack of a central system to identify natural persons,” Magana noted.

“After our President’s directive to interface our systems, we made great strides through NIDA. We also improved transparency of legal persons by working closely with company registrars on both Mainland and Zanzibar.”

What happens next?

Despite this achievement, the work is far from over. Minister of Finance Mwigulu Nchemba said Tanzania will maintain momentum by continuing to build capacity and enforce AML/CFT frameworks.

“We are committed to protecting the integrity of Tanzania’s financial systems. Sustaining this progress is critical to our nation’s development,” he said following the FATF announcement.

Tanzania’s next mutual evaluation is expected in 2028.

Key focus areas will include: risk policy coordination and international cooperation, enhanced corporate transparency and beneficial ownership, use and effectiveness of financial intelligence, prosecution capacity and asset confiscation, management of explosive materials in mining, and implementation of targeted financial sanctions.

Notably, maintaining zero cases in areas such as proliferation financing is not automatically a sign of success.

According to the FIU, such figures could indicate detection gaps, prompting FATF to question whether threats are being overlooked.

While removal from the grey list was once viewed as a final destination until the next decennial review, FATF now maintains continuous monitoring, including feedback from NGOs and international observers. Complaints can trigger mid-cycle reviews, and poor results could put the country back on the grey list.