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The Namibian central bank, Bank of Namibia(BoN) stated that it is on alert while dealing with transactions from South African clients following its greylisting by the Financial Action Task Force (FATF).
Financial and non-financial institutions worldwide, including those in Namibia, exercise increased caution when dealing with transactions or clients with ties to such jurisdictions. This does not imply quitting or de-risking but rather taking the necessary precautions to reduce this risk to acceptable levels, the apex bank said on Tuesday. The central bank was quick to point out that the greylisting of South Africa, a country whose financial system is linked to Namibia and has a currency peg, will not impact the domestic financial system.
As an independent and sovereign state, Namibia’s financial transactions with the rest of the world and capital flows to and from the jurisdiction should continue uninterrupted and be subjected to the current treatments and controls based on its merits. This is despite the country’s ties and exposure to the South African financial system, stated a BoN official.
The central bank said Namibia was making frantic efforts to fully comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations to avoid it also being greylisted. Namibia is going to great lengths to meet the deadlines in order to avoid the country from being greylisted after the current 12-month monitoring period expires,” BoN said.
This comes after a report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) found that Namibia was not in line with some global best practices when it comes to AML and CFT regulations related to the legal framework and the successful prosecution of financial crimes.The report concluded that Namibia was compliant with one recommendation and largely compliant with five, but was partially compliant with 11 and non-compliant with 29. Namibia was given a year to close all findings to avoid a targeted FATF review. The report analysed Namibia’s AML/CFT system and provided recommendations on how the system could be strengthened.
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Namibia is better positioned to safeguard its interests and protect its financial system because of the demonstrable political will and widespread support from all stakeholders. Investors regard Namibia as a safe investment destination, and the enforceability of the legal framework is undeniable, thanks to the strong institutions and independent judiciary. Namibia values its stakeholders all over the world and is committed to fighting financial crimes, Namibian financial system is robust and will be in better shape at the end of these interventions stated BoN Governor Johannes Gawaxab
