ROLE OF THE MEDIA IN COMBATING MONEY LAUNDERING

Money laundering has now become a source of worry and concern to not only
to Government but to society at large. But the question is: How many
Zambians understand the meaning of the term "money laundering"?

Admittedly, there has been little activity on prevention of money
laundering in the country. Money launderers activists seek to operate in
countries where there are lax controls.

Money laundering is defined as the 'method of hiding' mixing and disguising
the proceeds of criminal activity through legally operating institutions
for the purpose of concealing the origins of the proceeds.

It is clear by definition that money laundering is a tool used by people
involved in illegal activities like drug trafficking, organised crime
syndicates, tax-evasion, political bribery and corruption.

Events of the September 11th attack in the US added another dimension to
the problem of money laundering and brought to light the relationship
between this vice and terrorism.

This technique also uses front companies, to mingle the proceeds of illicit
activity with legitimate funds and in the process hide the ill gotten gains.

Such companies usually include restaurants, foreign exchange bureaux to
mention just a few.

These companies have access to substantial illicit funds , therefore
allowing them to subsidise the front company and offer its products and
services at levels below market rates.

At times they quote prices, which are below production cost and this
explains why front companies have competitive advantage over companies that
source their funding from financial markets.

This makes it difficult, if not impossible, for legitimate business to
compete against such companies. This leads to the crowding out of the
private sector by criminal organisations.

It is for this reason that the Drug Enforcement Commission (DEC) recently
organised a three day workshop with the theme "The role of the media in
combating money laundering".

The media being the mouthpiece of the people, the Commission felt it was
important to educate journalists on the issue which has not only affected
Zambia in particular but the world at large.

Information minister Newstead Zimba also added his sentiments on the need
for journalists to help fight the scourge.

Mr Zimba said the media should always bear in mind that those targeted for
investigations would not allow scrutiny once they realised that they were
being probed..

The minister said money launderers would do everything possible to silence
the "pen" through bribery and corruption.

"This is so because these people are aware of your humble earnings as
journalists and will try to offer you big money to blunt your tools.
Ultimately you stand the risk of being eliminated with a bullet once and
for all, " Mr Zimba warned.

He said criminals would never allow the media to be an obstacle to their
dirty business and that the drug barons and cartels of Columbia are just an
example of a country where journalists have been murdered in cold blood in
their pursuit of the truth.

The minister said the media should therefore be aware of these dangers as
they pursued this type of investigative journalism.

Mr Zimba said it was the media's duty to expose crimes such as money
laundering wherever it reared its head and that this was not an easy task
because crime would never bring itself to newsroom doorsteps.

He said the media should develop a nose for this type of news and
investigate it thoroughly using all the skills at their disposal, exposing
the crime with all the facts available.

Mr Zimba said the workshop was in line with Government's efforts to create
public awareness on the negative consequences of crime in order to achieve
its policy of zero tolerance to corruption.

During the same workshop, the DEC commissioner Mukutulu Sinyani said the
workshop marked a milestone in the history of the war on money laundering
in Zambia in that it had been an occasion where both print and electronic
media discussed the way forward.

Mr Sinyani said for the sake of good governance and justice, Zambians would
be the final beneficiaries of this effort.

He said this was because of the vital role the media would have to play in
making sure that such information reached a wider public and DEC was
committed to establishing and maintaining a harmonious working relationship
with the media.

Mr Sinyani said the press as the fourth estate was also a fundamental
pillar of good governance and development.

He said the media played a pivotal role as a vehicle delivering information
to millions of people and called on workshop participants to take the
message across the vast land.

Drug trafficking criminals as well as other outlaws involved in various
sophisticated crimes were known to be shrewd and highly elusive in their
attempts to conceal mischief

Criminals of this kind ensured that proceeds of crimes like drug
trafficking, were at any cost was delinked from the main crime so that they
appeared legitimate.

Mr Sinyani explained that this activity was what constituted money
laundering and some Zambians have in the past lost their properties like
cars because they could not account for them.

Realising the seriousness of the problem, the Zambian Government enacted
Money laundering. Act number 14 of 2001 as a way of prohibiting and
preventing Money laundering. It came into effect on 23rd November 2001.

During the workshop it was learnt that bankers needed to maintain the
banking ethics of mutual trust with customers.

Bank of Zambia (BoZ) Senior Inspector Eustace Mainza who presented a paper
on the "Role of the Central bank in combating money laundering" said if
bankers allowed known crooks or criminals to do business this meant that
they were inviting them to come and steal from the banks.

Mr Mainza said the challenge for banks therefore was to adopt vigorous
programmes for the detection of suspicious transactions because failure to
report such exchanges under the new money laundering legislation would
subject the bank to criminal sanctions.

Mr Mainza said it was important for banks to strengthen their 'know your
customer' policies, to oversee their diligent implementation and upgrade
office staff expertise.

He said lack of anti-money laundering practices in a bank may also affect
its correspondent relationships because reputable international banks would
not want to be associated with banks that did not practise basic anti-money
laundering techniques and therefore threaten their own operations.

Due to the seriousness of the matter, a Financial Action task-force
(FATF)-a 26 member inter governmental, policy-making body was established
in 1989 to guide the implementation of anti-money laundering measures in
the aftermath of the 1988 United Nations Drugs Convention.

How many people understood that money laundering made governments' tax
collection efforts difficult and diminished tax revenues while the loss of
revenue meant government setting higher tax rates than would normally be
the case if the untaxed proceeds of crime were legitimate?

How many people were aware that money laundering threatened the efforts of
many states to introduce reforms into their economies through privatisation.?

These were part of the hundreds questions people had asked but which had
remained unanswered, until the media rose to the challenge. While
privatisation initiatives were often economically beneficial, they also
served as a vehicle to launder funds.

Criminals had been known to purchase privatised banks, leisure resorts and
many other enterprises. Until an ordinary Zambian understood the
seriousness of money laundering and its effects, this crime may proceed
unchecked.