The anti-money laundering law in Tanzania: whither the ongoing “war” against economic crimes?
| DOI | https://doi.org/10.1108/JMLC-09-2020-0099 |
| Published date | 16 November 2020 |
| Date | 16 November 2020 |
| Pages | 869-907 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Eugene E. Mniwasa |
The anti-money laundering law in
Tanzania: whither the ongoing
“war”against economic crimes?
Eugene E. Mniwasa
Department of Management Sciences, The Institute of Finance Management,
Dar es Salaam, Tanzania
Abstract
Purpose –This paper aims to explore the evolution of the law for combating economic crimes including
money laundering in Tanzania and explore the current developments in the anti-money laundering (AML)
law and the ongoing fight againstthese crimes in Tanzania.
Design/methodology/approach –A desk-based review of documents on money laundering and its
control in Tanzania was conducted. The paper presents qualitative data from the documentary sources. It
applies the doctrinal legal research approach to examine, analyze and describe the AML law applicable in
Tanzania. The paper uses the “law-in-context”research approach to exploresome non-law aspects of money
laundering in Tanzania and interrogate how the law addresses non-law dimensions of money laundering.
Policy documentsand media reports were analyzed. The thematic data analysistechnique was applied, which
involvedidentifying, describing and reporting issues accordingto the themes emergingfrom the data.
Findings –The AML law in Tanzania emerged from the law that was originallyenacted to curb economic
crimes. The law has evolvedfor some decades. Its evolution has been driven by domesticfactors and foreign
drivers which are political, economic and social in nature. The role of the AML law has been changing.
Initially,the law was a tool for curbing economic crimes.Recently, the law has acquired a new role,namely, to
facilitate the recovery of illicit funds and non-financial assets from offenders and enable the authorities in
Tanzaniato use those economic resources for developmentalpurposes.
Research limitations/implications –The paper underscoresthe need for the Government of Tanzania
to re-consider the broader implications involved in its current effortsto tackle economic crimes and money
laundering. The balance between the implementation of the measures to combat money laundering and
economic crimes inTanzania and the importance of protecting rightsof persons indicted with those offences
should be struck. The AML law should be applied in such a way not to infringe the rights of the accused
persons and not to throttle economic activities including the flow of legitimate foreign investments into
Tanzania.
Originality/value –This paper generates insightful information to policymakers, law enforcers,
regulators and other stakeholders who undertake activities to tackle money laundering and its control in
Tanzania and researchers who study these issuesfor purposes of providing understanding of the problem
and facilitating policy and legal reforms. The paperraises issues that can be explored further in future and
contributeto the discourse on money laundering and its control in Tanzania.
Keywords Tanzania, War, Money laundering, Law, Economic crimes
Paper type Research paper
The author would like to thank two anonymous reviewers who read the draft of this article for their
invaluable comments. There is no conflict of interest that was involved in conducting the research
and writing this article.
Anti-money
laundering law
in Tanzania
869
Journalof Money Laundering
Control
Vol.24 No. 4, 2021
pp. 869-907
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-09-2020-0099
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
1. Introduction
Economic crimes which are sometimes referred to as financial crimes, such as corruption,
tax evasion, misappropriationand embezzlement of public funds and property, theft, armed
robbery, fraud, forgery, poaching, drug trafficking and smuggling, have become common
phenomena in Tanzania [1]
,
[2]. These crimes are committed parallel to laundering of
proceeds generated from those criminal offences. Money laundering has had adverse
impacts on Tanzania and its economy and people. The Government of Tanzania (GoT) has
enacted laws to control moneylaundering and its predicate crimes and minimize its harmful
impacts.
The anti-money laundering (AML) law which forms part of the AML legal regime in
Tanzania has evolved for severaldecades. This evolution has been driven by:
(1) the GoT’s attempts to suppress criminal activities that emerged as a result of the
adoption and implementation of certain policies;
(2) the need to align the domestic AML law in Tanzania to the requirements of the
international AML legal instruments; and
(3) the necessity to ward off economic crimes and money laundering.
The GoT’s authorities have in the recent years reinforced the country’s AML legal regime
and intensified the fight against economiccrimes and money laundering. This development
has had certain implications.
The objective of this article is threefold:
(1) to present the overview of the money laundering situation in Tanzania;
(2) to examine the evolution of the law in Tanzania applied to deal with money
laundering in Tanzania; and
(3) to discuss the current developments concerning the country’s AML law and the
GoT’s measures taken to fight off economic crimes and money laundering in
Tanzania and highlight some of their implications.
The article addresses the followingmain questions:
Q1. What is the situationof money laundering in Tanzania?
Q2. How has the AML law inTanzania evolved and what are its key components?
Q3. What are the current developments in Tanzania’s AML law and the ongoing fight
against economiccrimes and money laundering in the country?
Following this introductorypart, the article is structured as follows: Section 2 reviewssome
literature on money laundering andits control in Tanzania. Section 3 describes the concept
of money laundering and its general features,cycle, effects and regulatory control. Section 4
presents an overview of the situation of money laundering in Tanzania. Section 5 explores
the evolution of the AML law and legal regime in Tanzania. Section 6 discusses the
transformation in the role of the AML law that has occurred in Tanzaniain the recent past.
Section 7 concludes the discussionand proposes some measures to address the inadequacies
identified in Tanzania’sAML legal regime.
2. Review of literature
Money laundering and its predicatecrimes are problems that have been ravaging countries
in the Sub-Saharan Africa (SSA) (Goredema, 2005;Hübschle, 2011;Schlenther, 2013;
JMLC
24,4
870
Oke, 2016;Kayuni, 2016). A wide range of crimes committed in the SSA countries and
abroad generate huge amountsof funds that subsequently are laundered within and outside
the continent. These countries have laws that are applied to combat those crimes and
laundering of criminal proceeds (Askin and Collins,1993;Mbao, 2011;Norman et al.,2014).
The laws prescribe mechanisms and vest authorities with powers to deal with criminal
activities generally and money laundering (Goredema and Montsi, 2002;Mwenda, 2006;
Moshi, 2007;Quaye and Coombs,2011). The efficacy of these AML laws in these countries is
undermined by inadequacies inherent in the laws and limitations of the institutions tasked
to fight against money laundering and its predicate crimes (Madzima, 2009;Simwayi and
Haseed, 2012;Gikonyo, 2018a). Moreover, some systemic problems, arising from political,
economic and other factors prevailing in these countries, contribute to undermining the
efficacy of the AML legal regimes in many of the SSA countries(van Donge, 2009;Hübschle,
2011;Otusanya and Lauwo,2012;Dusabe, 2016;Oke, 2016).
Tanzania, like other SSA countries, is afflicted with money laundering and its predicate
crimes. The country is struggling to control the scourge. There is a body of literature in
Tanzania that has explored issues concerning money laundering and the country’s AML
legal regime and looked at some of the efficacy and weaknesses of the counter money
laundering measures. Kapinga (2010) and Mniwasa (2015) have explored issues relating to
economic crimes and money laundering in the country. The authors point out that these
criminal offences, some of which are presently designated as predicate crimes of money
laundering, started to proliferate in the 1980s and expanded further in the 1990s. The
authors cite several factors that have contributed to the proliferation of money laundering
including the rise of crimesthat emerged as a result of economic liberalization, privatization
and deregulation; weaknessesof the financial sector and systems; inadequacies of reporting
persons and regulators in tackling money laundering; and the existence of cash-based
economy and informal financial systems that are applied to launder money. The authors
explore the legal and institutionalframeworks for combating money laundering in Tanzania
and highlight some inadequacies and limitations of the country’s AML legal regime to
address the problem.
Besides Kapinga (2010) and Mniwasa (2015) who have examined money laundering
generally, other authors have explored issues concerning the control of specific predicate
crimes of money laundering in Tanzania including poaching (Mabele, 2017;Kideghesho,
2016), the illicit trade in weapons(Ndawana et al.,2018), corruption (Gray,2015), tax evasion
(Andreoni and Tasciotti,2019) and fraud and forgery (Assad, 2011). The above authors have
also looked at the legal and institutional frameworks for tackling these crimes and
highlighted some challenges involved in controlling those criminal offences. They have
identified several inadequacies in the legal and institutional frameworks for tackling these
money launderingpredicate crimes.
Tenga (2018), besides describing money laundering and its features, Tanzania’s AML
legal and institutional frameworks generally and highlighting some loopholes in the AML
law, presents an assessment of the law and problems and challenges associated with
prosecutions of persons whoare indicted with economic crimes and money laundering. The
author makes comparisonsbetween some aspects of the AML law in Tanzania and the AML
laws in other jurisdictions. Based on the examination of the case law,the author cites some
uncertainties created by the courts when interpreting the provisions of the Anti-Money
Laundering Act 2006 with regard to what constitutes the offence of money laundering, its
criminal components and the linkage between predicate offences, proceeds of crime and
money laundering. He expresses reservations about the tendency by the law enforcement
agencies to delay investigationsof money laundering cases and the prosecutorial authorities
Anti-money
laundering law
in Tanzania
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