BY ABEBE WOLDEGIORGIS
Presently, the financial sector has critically faced challenges it ever witnessed in its history. Criminality through digital technology has been growing from time to time. Some indicators in this regard are; providing illegal documents which shows money and property as if it is legal, illegal money order, using Franco valuta by hard currency obtained through illegal means. Money laundering through digital sport games highly hit the economy are some of the activities.
Yonas Mamo is working as a manager of the Finance Security Service and the Finance Criminal Research Team. As to him, at this time in this country, various criminal acts in relation to the finance are being committed. Illegal money transfer through money order is the major one. The second one is circulating foreign currency in the black market illegally.
Various countries’ currencies such as Dollar, Pound, Euro and currencies of some Arab countries are being circulated in black market without cognizance of the National Bank of Ethiopia (NBC) instead of channeled through formal transition, .The other one is rampant corruption and these three crimes have been a headache to the nation.
But the major source of the crimes is rooted to corruption. Illegal money transfer also is rampant in banks. Instead of being deposited in the banks, the hard currency earned through export finds its way to the mysterious channel which in turn hampers importers not to access the currency .Some corrupted bank staffs collaborate with money launderers serve the criminals’ interest by obtaining commission from them and send the hard currency out of the bank channel illegally. The other thing is that sabotaging the inflow of hard currency not to reach the country.
As to Yonas, there are numerous actors involved in such criminal acts. The money obtained by illegal money order firstly finds its way to the importers. Money launderers take the shortage of hard currency as good opportunity to commit crime. They illegally add the value of hard currency against the official exchange rate set by the NBE and channeled the Ethiopian diaspora money to their account in abroad which again barred the NBE not to obtain the currency. After they amassed the currency in such tricky way, they send goods to Ethiopia by incurring additional price on the goods in which ultimately the consumers will take the burden.
In this illegal money laundering, importers have the lion’s share. But despite some importers indulged in such illegal practices, there are also importers with professional integrity who respect and abided by the law. Illegal importers have been threat to the legal importers who unfairly compete with them. Because of the shortage of hard currency in banks, the regular importers spend unnecessary time and wait up to six months to obtain the currency through letter of credit. The illegal importers, however, open letter of credit to obtain small amount of hard currency from banks and intentionally prolongs the legal importers’ time to obtain the currency.
According to Yonas, the first intention of the government when permitting Franco valuta was to import goods with hard currency obtained in abroad. However, some entities enjoy the right to use the permission as a loophole to collect hard currency in abroad and import edible oil through illegal money order system. Therefore, the money that would have come to the country will be missed. Currently, though plenty amount of edible oil availed in the market; the price hike still continued with no deduction.
Because they purchased the product in abroad with high price, they transfer the added price to the local consumers which in turn aggravate the nation’s socio-economic problem. The other thing which is more worrisome is that brokers residing in abroad are involved in such illegal activities. These brokers engaged in collecting currency in abroad. They also involve in illegal human trafficking Their collaborators residing inland distribute the commodities to the market.
Commendably now, the government is working rigorously to contain their activities. Sadly, the hard currency which would be transferred here in the form of remittance would be contained there by the illegal brokers residing there through international money transfer companies. In turn, the brokers tell their local collaborators to provide the local currency to the people who have relatives in abroad and contained the hard currency there. As a result, they ultimately make the nation miss the hard currency. Foreigners also are involved in such illegal money laundering. Some Ethiopians residing here also work to block the inflow of hard currency.
Some foreigners who come here as if they are investors involve in illegal money laundering but the government prioritized hunting local collaborators. In addition to this, local investors who play their role behind the curtain in money laundering also are targeted. While Ethiopian importers utilize the hard currency obtained in the black market, foreigners also engaged in capital flight activities.
The finance security service institute studies and detects the source of the money circulated illegally and will put the culprits in to accountable for their misdeed be it Ethiopian or foreigner. It also charges institutions engaged in the illegal money order, importers and brokers with the cooperation of other stakeholders
As to Yonas, the shortage of hard currency in banks makes the economy to be vulnerable to illegal money launderers. The absence of coordination between law enforcing bodies opens the door for illegal actors to continue their criminal acts with impunity. Besides, the absence of the issuance of national identity card also created conducive environment to the criminals. Because of this, the criminals transfer money through utilizing illegal documents. Though banks introduce various new methods to contain illegal money transfer, their effectiveness is questionable. Some of the instructions have their own weakness and gaps so that vulnerable to be exploited by criminals.
For example, the diaspora account which enables to deposit hard currency in NBE has its own merit but some individuals use it for illegal money laundering. Some Diasporas who opened bank account to deposit Dollar found committing crime by depositing Dollar obtained from black market. Dealing with such illegal activities is underway. Others also commit crimes in other way. When they come from abroad, they declare their hard currency which they bring from outside in the Ministry of Revenue. For instance, if they bring 2,000 Dollars, they show the correct amount but they deposit 20,000 Dollar by false documents through collecting it from black market.
Criminals exploit the weakness of the financial law and advance their devilish interest. They are chained with other criminals. Some engaged by hampering the inflow of hard currency here in the form of remittance. Importers also involve in the criminal acts. Others circulate hard currency in the black market. Most financial crimes are committed by cooperation.
The finance security institute not only targets criminals in the front line but also targets and hunts criminals who mastermind the crime behind the curtain. There are criminals reside in abroad who coordinate the crime. If one criminal is arrested they start money laundering with other individuals. Thus, to crack down the criminal activities, the financial security institute should exert its efforts with the collaboration of other stakeholders such as National Information Security, Artificial Intelligence, the Addis Ababa and Federal Police Commissioners, Ministry of Justice and National Bank of Ethiopia.
However, though the money laundering activities reached to its peak time, the coordinated efforts did not strengthen yet. In general factors that contribute to the rampant criminal activities among others, the loophole witnessed in the criminal law, the absence of national identification card and the poor coordination with stakeholders need to be applied to fight the crimes.
The Ethiopian Herald December 8/2022