BoN to exercise extra caution with SA transactions following greylisting

February 28, 2023

The Bank of Namibia (BoN) says it will exercise increased caution when dealing with transactions or clients from South Africa following its greylisting by the Financial Action Task Force (FATF).

“With the addition of the Republic of South Africa to the FATF's list of jurisdictions subject to heightened scrutiny, the FATF framework suggests the risks of dealing with clients and/or transactions associated with, or emanating from, jurisdictions on the list are increased. As a result, relevant financial and non-financial institutions worldwide, including those in Namibia, must 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 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,” the bank said.

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.

BoN Governor Johannes !Gawaxab said: "Notwithstanding these recent developments in our region, we have seen countries close to home successfully exiting the heightened surveillance through resolute commitment and action from all stakeholders. 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.

“We are encouraged that investors regard Namibia as a safe investment destination, and the enforceability of our legal framework is undeniable, thanks to our strong institutions and independent judiciary. We reassure Namibians and our valued stakeholders all over the world of our commitment to fight financial crimes and, that our financial system is robust and will be in better shape at the end of these interventions."

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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Last modified on Wednesday, 01 March 2023 18:24

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