Legal Brief: AML Regional Group Criticizes Slow Progress in Eastern, Southern Africa

By Silas Bartels, Legal Writer

Editor’s Note: In the latest installment of our series, the ACAMS legal team covers recent AML/CTF developments in five African nations.

The Eastern and Southern Africa Anti-Money Laundering Group, or ESAAMLG, published a series of reports on June 17, re-examining Zimbabwe, Ethiopia, Botswana, Tanzania and Mozambique’s progress in implementing the standards of the Financial Action Task Force.

Zimbabwe received positive re-ratings for two of FATF’s 40 technical recommendations after the nation finalized a five-year AML plan that focuses on building capacity, and developing parallel financial investigations, asset forfeiture measures and beneficial ownership requirements.

But Zimbabwe remains on FATF’s “gray list” of jurisdictions that require enhanced monitoring after the ESAAMLG found that the country failed to improve coordination between anti-financial crime agencies, eliminate gaps in counterterrorist financing legislation, and implement updated global standards for virtual assets and virtual assets service providers, or VASPs.

Ethiopia, the largest of the five countries by area as well as by population, received one positive technical re-rating from the ESAAMLG after the nation’s Financial Intelligence Center published AML guidance for financial institutions. Like Zimbabwe, Ethiopia also saw one score downgraded after failing to regulate VASPs as recommended.

The nation’s shortcomings vis-a-vis cryptocurrency and other virtual assets are not unique.

After reviewing global implementation of its recommendations against money laundering and terrorist financing, FATF disclosed July 5 that only 52 jurisdictions reported having an AML regime in place for VASPs, and that six nations had banned the industry altogether.

Botswana, another nation on FATF’s gray list, appears to have made the most progress in eliminating its shortcomings against financial crime, earning better scores for seven technical recommendations after revising its Financial Intelligence Act to expand AML oversight and amending its Banking Act to remove certain limitations on suspicious activity reporting.

But the ESAAMLG still rated the country fully compliant with only two of the 40 standards, non-compliant with another two and partially compliant with a further eight.

The group’s most recent evaluation of Tanzania noted the country’s improved AML policies, customer due-diligence requirements, and understanding of money laundering and terrorist financing risks; but criticized its persistently inadequate assessments of the extent to which legal entities, nonprofit organizations and other sectors are exposed to financial crime.

Tanzania’s progress with FATF’s 40 technical recommendations did not offset its continued low scores in nine of the intergovernmental group’s 11 “immediate outcomes” for measuring effectiveness, and moderate scores—the second-lowest possible rating—in the remaining two.

Mozambique, the last of the five countries evaluated by the ESAAMLG, still earned mostly subpar scores—low or moderate—for the 40 recommendations, and low scores in all 11 immediate outcomes.

Although financial intelligence has been disseminated in Mozambique, there is little indication that authorities have used it to investigate money launderers. Separately, the country’s financial institutions have reported few, if any, transactions for potential links to terrorism, according to the ESAAMLG.

Contact Silas Bartels at

Topics : Anti-money laundering , Counterterrorist Financing
Source: Zimbabwe , Ethiopia , Botswana , Tanzania , Mozambique
Document Date: July 15, 2021