IPEC to Collaborate With FIU to Improve AML Framework

IPEC to collaborate with FIU to identify terrorist financing and money laundering risks that are emerging due to the digitization of businesses.

This initiative dictates the Money Laundering and Proceeds of Crime Act, which mandates the Insurance and Pension Commission (IPEC) to identify and evaluate the money laundering and terrorist financing risks linked with individual and business entities. Money laundering is an illicit procedure of hiding the source of black money by passing it through a complex sequence of commercial transactions or bank transfers.

According to the key findings of the National Risk Assessment (NRA) report, Zimbabwe’s money laundering vulnerability was ranked medium, with a score of 0,52 in 2020. However, the Life Offices Association (LOA), Insurance Council of Zimbabwe (ICZ), Zimbabwe Association of Reinsurance Organizations (ZARO), Zimbabwe Association of Pension Funds (ZAPF), Zimbabwe Association of Funeral Assurers (ZAFA), and Insurance Brokers Association of Zimbabwe (IBAZ), worked with the Central Bank of Zimbabwe to counter the money laundering and terrorist financing activities.

Themed “Anti-money Laundering and Combating the Financing of Terrorism (AML/CFT) Quarterly Return Template”, the paper was also sent with similar instructions to insurance companies, brokers, reinsurers, pension, and pension fund administrators.

“The Insurance and Pensions Commission is required in terms of the Money Laundering and Proceeds of Crime Act (Chapter 9:24) to coordinate with Financial Intelligence Unit in the assessment of the money laundering and terrorist financing risks to which the country is exposed. Going forward, all insurance companies and pension funds are required to submit the completed return template to the commission within 21 days after the end of every quarter,” said Dr. Grace Muradzikwa.

She stated that the commission had come up with a quarterly return template that permits financial as well as non-financial institutions to gather customers’ information to conduct risk assessments and other off-site surveillance.  The last national risk assessment by regulatory bodies revealed that the banking sector, real estate companies, and mobile money exchanges are high targets of money launderers while pension funds businesses were labeled a medium level of money laundering threat.

Suggested Read: FIU in Sri Lanka Penalizes Financial Firms over AML/CFT Non-Compliance