Zambia
Answer ... The following legislative and regulatory provisions constitute the AML regime in Zambia:
- The Prohibition and Prevention of Money Laundering Act (14/2001) (as amended by Act No.44 of 2010) is the primary act that deals with money-laundering activities and restrictions.
- The Anti-Terrorism Act (21/2007) and Anti-Terrorism and Proliferation Act No. 6 of 2018 deals with the restriction of terrorist activities in the jurisdiction.
- The Forfeiture of Proceeds of Crime Act (19/2010) provides for the circumstances and instances of the civil and criminal forfeiture and seizure of the proceeds of crime.
- The Financial Intelligence Centre Act (46/2010) (as amended by Act 4/2016) establishes the Financial Intelligence Centre and sets out the duties of both supervisory authorities and reporting entities.
- The Public Interest Disclosure (Protection of Whistle-blowers) Act (4/2010) provides a framework within which persons that make a public interest disclosure will be protected. Its objective is to provide for the disclosure of conduct that is adverse to the public interest in the public and private sectors.
- The Mutual Legal Assistance in Criminal Matters Act, 1993 provides for the implementation of treaties for mutual legal assistance in criminal matters.
- The Plea Negotiations and Agreements Act (20/2010) governs the plea negotiations that may be entered into by accused persons.
- The Anti-Corruption Commission Act (3/2012) deals with corrupt and provides for the establishment of the Anti-Corruption Commission, which is mandated to deal with corrupt activities.
- The Narcotic Drugs and Psychotropic Substances Act (35/2021) provides for the establishment and functions of the Drug Enforcement Commission. It also criminalises trafficking in drugs and the unlawful manufacture of drugs.
- The Non-Governmental Organisation Act (16/2009) as amended by Act No.23 of 2020 provides for the coordination and registration of non-governmental organisations, and for the maintenance of a register of local and international non-governmental organisations.
- The Penal Code Act (Chapter 87 of the Laws of Zambia) criminalises offences and sets out the applicable sentences.
- The National Prosecution Authority Act 2010 established the National Prosecution Authority as the primary authority for the administration of criminal justice in the jurisdiction.
- The Bank of Zambia Anti-Money Laundering and Combating the Financing of Terrorism or Proliferation Directives, 2017 apply to all financial institutions (reporting entities) in relation to the duties of officers in ensuring AML compliance.
These acts apply at the national level.
Zambia
Answer ... The following bilateral and multilateral instruments at an international level have effect in Zambia:
- the Financial Action Task Force (FATF) Recommendations, which set out 40 special recommendations on counter-terrorist financing (CFT). The recommendations articulate international standards for countries to adopt for AML/CFT purposes and incorporate in local legislation;
- the UN Single Convention on Narcotic Drugs 1961 (amended in 1972) (acceded to by Zambia);
- the UN Convention on Psychotropic Substances 1971 (acceded to by Zambia);
- the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1981 (ratified by Zambia);
- the UN Convention against Transnational Organised Crime 2000 (ratified by Zambia);
- the UN Convention against Corruption (ratified by Zambia); and
- the UN Convention on Suppression of Terrorism.
At a regional level, the following multilateral and bilateral agreements have effect in Zambia:
- the Southern African Development Community (SADC) Protocol on Combating Illicit Drug Trafficking (ratified by Zambia);
- the SADC Protocol against Corruption (to which Zambia is a signatory); and
- the African Union Convention on Preventing and Combating Corruption (to which Zambia is a signatory).
Zambia is also a member of:
- the Eastern and Southern African Anti Money Laundering Group; and
- the African Heads on Narcotic Law Enforcement Agencies.
Zambia
Answer ... The following public sector bodies and authorities are responsible for enforcing AML laws:
- Anti-Money Laundering and Combating Financial Terrorism Authority: This was established by Section 3 of the Prohibition and Prevention of Money Laundering Act (14/2001). It is a policymaking body with the power to prosecute individuals and companies for money laundering.
- National Task Force of Senior Officials: This was set up by the Cabinet Office to coordinate AML-CFT matters among stakeholders. It has the power to establish and improve existing policies on AML/CFT matters.
- Financial Intelligence Centre: Established by the Financial Intelligence Act, the centre has the power to investigate complaints and report to enforcement agencies such as the police, the Anti-Corruption Commission, and the Drug Enforcement Commission.
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Anti-Corruption Commission: Established by the Anti-Corruption Commission Act, this is a law enforcement body with the power to investigate and prosecute corruption offences.
- Zambia Police Service: This is a law enforcement body and receives instructions to charge accused natural and legal persons. It has the power to charge persons with criminal offences.
- Immigration Department: This is a law enforcement body which has the power to detect illegal immigrants.
- Zambia Security Intelligence Service: This is a law enforcement body with the powers of the Zambia Police Service.
- Drug Enforcement Commission: Established by the Drug Enforcement Commission Act, the commission has an AML Unit and has the power to investigate and prosecute drugs offences.
- National Prosecution Authority: This is the principal authority for all prosecutions and is a law enforcement body. It prosecutes charges on behalf of the police by virtue of Section 82 of the Criminal Procedure Code Act (Cap 88 of the Laws of Zambia).
- Zambia Revenue Authority: Established under the Zambia Revenue Authority Act, this is responsible for ensuring tax compliance. It is a law enforcement body with the powers to investigate and prosecute non-compliant persons.
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National Task Force on Anti-Money Laundering: This body is tasked with:
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- enhancing domestic cooperation; and
- overseeing the adoption and implementation of international AML/CFT standards and the development of national AML/CFT standards strategies.
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Ministry of Foreign Affairs: This serves as the depository for international instruments to which Zambia accedes.
- Ministry of Justice and Ministry of Home Affairs: These ministries oversee the dispensation of justice and the enforcement of the relevant AML laws.
- Other: Any other institution designated by a minister by statutory instrument.
Zambia
Answer ...
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Law Association of Zambia: Established by the Law Association of Zambia Act, this body regulates legal practitioners. It is responsible for ensuring that suspicious activities and transactions are reported to the Financial Intelligence Centre by legal practitioners in their legal capacity. The Prevention and Prohibition of Money Laundering Act provides that anyone that is involved in money-laundering activities will be guilty of an offence and will be liable upon conviction to a fine, imprisonment or both. This provision will thus apply to lawyers who engage in any money-laundering activities. They fall under the definition of ‘designated non-financial businesses and professions’.
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Zambia Chartered Institute of Accountants: Established by the Accountants Act, 2008, this body regulates accountants and is responsible for ensuring that suspicious activities and transactions are reported to the Financial Intelligence Centre. The Financial Intelligence Act does not establish accountants as reporting entities; they rather fall under the definition of ‘designated non-financial businesses and professions’. The Prevention and Prohibition of Money Laundering Act provides that anyone who is involved in money-laundering activities will be guilty of an offence and will be liable upon conviction to a fine, imprisonment or both. This provision will thus apply to lawyers that engage in any money laundering activities. However, where accountants work for financial Institutions, they are required to report offences.
The above bodies do not have AML/CFT powers per se. While legal practitioners, accountants, casinos and so on are not mandated to report, they must not participate in money-laundering activities.
Zambia
Answer ... Only the Bank of Zambia and the Registrar of Banks and Financial Institutions have issued guidelines for regulated institutions. There are no directives for designated non-financial businesses and professions to put in place appropriate risk management systems to determine whether a potential client, an existing client or a beneficial owner is a politically exposed person.
Financial services are regulated by the Bank of Zambia, which derives supervisory power from Article 213 of the Constitution of Zambia (Amendment Act 2/2016). It supervises reporting entities, such as financial institutions and non-bank financial institutions (eg, micro finance institutions; leasing companies). The Bank of Zambia also supervises the transactions of reporting entities.
The Financial Intelligence Centre Act establishes financial institutions as reporting entities. They are responsible for:
- identifying suspicious transactions and accounts;
- identifying the actual owners of accounts;
- compiling reports of transactions; and
- reporting suspicious transactions to the Financial Intelligence Centre.
Zambia
Answer ... In the past, Zambia:
- faced enforcement issues, due to the inadequate labour, training and resources of law enforcement agencies;
- did not have a financial intelligence unit that met international standards; and
- was placed under monitored jurisdiction (When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring) by the US Department of State in 2016 (International Narcotics Control Strategy Report).
Today, Zambia still faces enforcement issues (e.g., training, resources) and is still seeking to comply with all 40 special recommendations of the FATF. It has thus far been rated ‘effective’ for 11 areas/recommendations.
Zambia
Answer ... Reporting activities are conducted by reporting entities such as financial institutions and banks. Most reporting activities are conducted by financial institutions, as they are obliged to report under the Financial Intelligence Centre Act.
Lawyers, accountants and designated non-financial businesses and professions have no specific suspicious transaction reporting or suspicious activity report obligations.
Reporting entities are regulated by their respective supervisory authorities. Financial institutions must:
- conduct suspicious transaction reporting and submit suspicious activity reports on AML/CFT activities to the Financial Intelligence Centre; and
- require owners, account holders and so on to explain the source of funds or changes in the source of funds.
As a matter of policy, some financial institutions do not open accounts for certain businesses, or for companies and individuals from certain countries.
Financial institutions derive the powers to monitor transactions from Bank of Zambia directives, their internal policies and the law. The main such power is the power to require an explanation as to the source of funds.
Zambia
Answer ... The Financial Intelligence Centre acts as Zambia’s financial intelligence unit.
It is aligned with Financial Action Task Force Recommendation 20 and was established in 2019 under the Financial Intelligence Centre Act (46/2010) (as amended in 2016).
It is mandated:
- to receive, request, analyse and disseminate the disclosure of information on AML/CFT and serious offences; and
- to conduct inquiries on behalf of foreign designated authorities and notify them of outcomes.
The Financial Intelligence Centre works with international bodies such as:
- the FATF, which is an intergovernmental body that develops and promotes financial policies; and
- the Eastern and Southern African Anti Money Laundering Group, of which Zambia is a founder member.
Zambia
Answer ... The Financial Intelligence Centre Act mandates financial institutions (reporting entities) to require from client’s details such as directors, shareholders, address account holders, beneficial owners and foreign companies.
They are also required under the AML/CFT directives to maintain private registers which are not available for public use.
Private corporate registers may also be maintained by companies.
Public bodies must keep registers which are to be administered by the controlling or chief executive officer. These registers must list all gifts offered or received by the public body, as required under the Anti-Corruption Commission Act.
Zambia
Answer ... The registers of financial institutions are privately held by those financial institutions.
Registers maintained under the Bank of Zambia’s AML/CFT directives are shared only with the supervisory authorities and the Financial Intelligence Centre.