SOUTHERN AFRICA NEEDS TO OUTLAW MONEY LAUNDERING

All Southern African countries need to outlaw money laundering because
it is costing their economies several billion dollars a year, says a
specialist researcher.

Charles Goredema of the Institute for Security Studies said Angola,
Malawi and Lesotho are some of the countries in the region that still
do not have in place legislation criminalising money laundering, which
is hampering law enforcement in the region.

Stolen vehicles from South Africa, Botswana and Namibia are being
smuggled to Angola, where they are exchanged for diamonds, or paid for
with cash realised from the sale of illegal diamonds or hard currency,
according to a book co-authored by Goredema, Profiling Money
Laundering in Eastern and Southern Africa.

Money laundering through drug trafficking is a major
problem in Malawi: farmers grow marijuana in northern
Malawi, allowing them to purchase basic commodities,
and the drug is then exported to Zimbabwe, Namibia and
South Africa.

The United Nations Convention against Transnational Organised Crime,
signed in 2000, requires countries to pass legislation to prevent the
proceeds of crime from being laundered.

South African Minister of Finance Trevor Manuel has reportedly said
that while there has been no conclusive study, the government believes
that between $2-billion and $8-billion is being laundered through
South African institutions every year.

According to a 2002 study by a Zimbabwean think-tank, the National
Economic Consultative Forum, money laundering had cost the country
$1-billion over a six-year period.

The book identifies three kinds of money laundering: internal,
incoming and outgoing. Proceeds from drug trafficking and theft are
used for internal money laundering, often in the form of property
purchases and other luxury items.

Proceeds from fraud and theft are also invested in businesses, such as
taxi companies or liquor outlets, popularly known as "cuca" shops in
Namibia or "shebeens" in South Africa.

Many countries such as Malawi and Zimbabwe do not query the source of
incoming foreign currency, which can be laundered through bureaux de
change and banks.

Proceeds from criminal activities can also be exported and turned into
real estate.

Mauritius and South Africa are in the forefront in terms of putting
anti-money-laundering legislation into place, Goredema said.

The Financial Intelligence Centre -- set up two years ago in South
Africa to monitor transactions handled by financial institutions --
and legislation compelling the identification of clients before
transactions can be made are effective ways of countering money
laundering, he noted.

Goredema pointed out that since the centre started operating, the
South African government has picked up 7 000 illegal transactions,
which has led to a number of high-profile arrests.