New amendments proposed for the law on preventing and punishing money laundering and terrorist financing may introduce significant changes including extended investigation periods and increased transparency on beneficial company ownership information.
Approved by the cabinet on Saturday, November 9, the proposed bill will now go through parliamentary scrutiny before it goes to the senate and thereafter gets a presidential signature.
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According Jeanne Pauline Gashumba, the Director General of the Financial Intelligence Centre (FIC), a specialised organ established to conduct financial intelligence in order to prevent and counter money laundering, the financing of terrorism and the financing of proliferation of weapons of mass destruction and related crimes, the new draft law is coming to fix some gaps in the current law, as well as making the FIC attain international standards.
"There are many modifications in the law, and they are mainly about closing some gaps that were identified to ensure that our system is strengthened, so that when any person who commits a terrorism financing act or money laundering and is caught on Rwandan soil they are punished according to international standards,” she said.
Explaining why the proposed law aims to extend the time allowed for property confiscation during investigations, she noted that financial crime investigations often involve gathering information from multiple countries, which can require much time. She did not divulge details regarding how much time will be provided for by the new draft law.
The draft law is also expected to include more acts that amount to terrorism financing, which had not been included in the current law.
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"There were some terrorism financing acts that were missing (in the current law),” she noted.
Talking about the need to meet international standards, Gashumba said, financial crimes are often cross border crimes and therefore there is a need that all nations follow certain practices to make sure that such crimes are punished.
On why the proposed law may require increased transparency for companies’ beneficial ownership information, Gashumba said sometimes people can steal or embezzle money and try to launder it through companies, but if beneficial ownership information is available, the investigators can link people to the companies and recover the laundered money.
According to a report by Verafin Inc., a fraud detection technology and anti-money laundering software subsidiary of Nasdaq, Inc., more than $3 trillion in illicit funds flowed through the global financial system in 2023.
Among the most prevalent crimes that fuelled the illicit flows and money laundering endemic were an estimated: $782.9 billion in drug trafficking activity, $346.7 billion in human trafficking, and $11.5 billion in terrorist financing.