Namibia greylisted, what now? FATF’s surprise decision, the potential economic fallout, how government will likely react and what it means for Namibian businesses
WINDHOEK – It’s official. On Friday 23 February 2024, Anti-Money Laundering (AML) watchdogs, the Financial Action Task Force (FATF), added Namibia to its grey list.
The decision signals increased monitoring of the country's efforts to combat money laundering and terrorist financing, sparking discussions across the financial and business sectors about the potential implications for Namibia's economy and its business community.
Namibia Greylisted
The FATF's decision to greylist Namibia underlines the necessity for the country to address strategic deficiencies in its anti-money laundering (AML) and counter-terrorist financing (CTF) regimes.
Namibia's Finance Minister, in response, has expressed the government's commitment to adhere to the FATF's guidelines and resolve these deficiencies within the set timeframes.
The government's action plan includes enhancing its legal framework, improving its ability to track and prosecute illicit financial flows, and strengthening overall AML and CTF measures.
The Potential Economic Impact
The economic repercussions of being greylisted can vary significantly from country to country.
South Africa, which was also recently greylisted, has claimed it is yet to experience substantial economic impacts, although it has faced challenges such as two major international finance corporations ceasing to accept deposits from South Africans.
Conversely, Zimbabwe's greylisting had a pronounced negative effect on its economy, leading to a loss of international relationships and significant financial strain.
For Namibia, the outcome remains uncertain. It could mirror South Africa's apparent resilience or face challenges similar to Zimbabwe's, underscoring the urgency for effective governmental and business responses.
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Namibian Government's Response
Namibia has already made notable progress in its AML efforts, including the introduction of crypto and general AML regulations, as well as imposing fines on violations.
However, these measures have been deemed insufficient by the FATF, since Namibia still has a lot of illicit financial flows.
To be removed from the grey list, the Namibian government must demonstrate its capability to effectively track, investigate, and prosecute illicit financial activities.
This will necessitate enhancing its internal systems and processes, an endeavour that will require active participation from the business sector.
Implications for Businesses
The greylisting signifies a forthcoming intensification of regulatory measures, compelling businesses to ensure strict compliance with AML regulations.
Namibian businesses are expected to face stricter scrutiny and will need to adopt more rigorous compliance measures to navigate this new regulatory landscape successfully.
In short, government will likely turn up the pressure to get all Namibian businesses AML compliant, as soon as possible.
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Achieving AML Compliance
Just how do you achieve AML compliance? The place to start is with sanction list screening.
See, the greylist is all about getting regions to adhere to AML requirements, which is that all businesses scan their clientele against sanctions lists – lists of suspected and known criminals (for lack of a better term).
In short, the Namibian government will likely require all financial service providers, including estate agents, lawyers, brokers, banks, insurance and medical, microfinance, deposit takers etc. to implement sanction list screening.
The Financial Impact for Businesses
The only problem with this is that, traditionally, the tools for achieving sanctions screening are internationally built and extremely expensive – Namibian FSPs can pass the additional cost of screening onto the customer, the only problem being that this will affect the customer’s perception of their service, and potentially force an FSP to become less competitive (in terms of pricing.)
See our report on balancing the cost VS Aml compliance as a business.
We have a solution, though…
Efficient, Affordable Sanction Screening
For businesses seeking to strengthen their AML compliance, ZenDetect presents a top-tier, locally-made sanction screening solution.
Our world-class sanction screening tool, ZenDetect, offers automated, continuous screening of all new and existing customers against sanctions lists. Designed for seamless integration into any enterprise system, ZenDetect not only facilitates compliance but also provides the essential reports required by the government.
Moreover, being locally developed, ZenDetect is up to 90% more cost-effective than similar international tools and services.
Learn exactly how to get sanction screening in Namibia.
In light of Namibia's greylisting, the importance of rigorous AML compliance has never been more apparent. ZenDetect stands ready to support your business in this critical period, ensuring you meet the enhanced regulatory requirements while contributing to Namibia's efforts to be delisted from the FATF's grey list.
Contact us today to learn how ZenDetect can safeguard your business and support Namibia's journey towards a stronger, more secure financial future.
