Zambia eyes minerals sector to tackle trade-based illicit financial flows

Zambia loses about US$3 billion annually through illicit financial flows (IFFs) according to the latest suspicious transaction report by the country’s Financial Intelligence Centre (FIC).

It says trade-based financial practices in the minerals sector are the main reason for the country’s losses.

Laundering typologies

Miners are allegedly creating IFFs by using a range of money laundering typologies, including transfer pricing, misinvoicing and taking advantage of loopholes in double taxation treaties.

The executive director of the Centre for Trade Policy and Development, Isaac Mwaipopo, is calling for action.

Urgent action

Mwaipopo has challenged Zambia’s security services and other public institutions to urgently act on the findings in the FIC’s latest suspicious transaction report.

He also wants to see an end to the externalisation of corporate funds through over-invoicing of goods and services provided by foreign suppliers, who are given preference over local suppliers.

“This needs to be addressed as it takes away the opportunity for local suppliers to benefit from the extractive sector. There are also cases of purchase of copper ore from small scale miners on the Copperbelt that is being exported to tax havens,” Mwaipopo said.

Categories: Trade Based Financial crimes News

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