The financial intelligence unit and money laundering control in Tanzania. The law, potential and challenges
Published date | 02 July 2019 |
DOI | https://doi.org/10.1108/JMLC-07-2018-0043 |
Date | 02 July 2019 |
Pages | 543-562 |
Author | Eugene E. Mniwasa |
Subject Matter | Financial risk/company failure,Financial compliance/regulation,Financial crime |
The financial intelligence unit and
money laundering control in
Tanzania
The law, potential and challenges
Eugene E. Mniwasa
Department of Management Sciences, The Institute of Finance Management,
Dar es salaam, United Republic of Tanzania
Abstract
Purpose –This paper aims to explore the role of the financial intelligence unit in Tanzania in fighting
against money laundering and its predicate offences, examine its potential in controlling the problem and
describefactors that undermine its efficacy.
Design/methodology/approach –The doctrinal research approachis used to analyse Tanzania’s anti-
money launderinglaw and appraise its effectiveness in facilitating operations of the financialintelligence unit
in fighting against money laundering and its predicate offences. The law-in-context approach is applied to
interrogate the anti-money laundering law and describe non-law factors that impinge on the efficiency of
Tanzania’sfinancialintelligence unit.
Findings –The law vests the financial intelligenceunit with powers to perform a number of functions that
are significantin fighting against money laundering and its predicateoffences in Tanzania. The unit has been
instrumental in curbingmoney laundering. The efficacy of this anti-money launderingagency, which is at its
infancy stage, is emasculated by law-related, institutional and non-law factors. These factors undercut the
potency of the agency.
Practical implications –There is a need for Tanzania to undertake policy, legislativeand institutional
reforms to augment the efficacy of the financial intelligence unit. The reforms should be implemented
concurrentlywith other measures, which will enhance the country’s anti-moneymoney laundering regime.
Originality/value –This paper applies the legaland non-law perspectives to evaluate the effectiveness of
the financial intelligence unit as an essential component of Tanzania’s anti-money laundering regime. It
proposes law-related and non-law approaches to augment the efficiency of the unit and the country’s anti-
money launderingregime in general.
Keywords Tanzania, Financial intelligence unit, Law, Money laundering
Paper type Research paper
1. Introduction
Studies and reports indicatethat money laundering and its predicate offences are becoming
notable phenomena in Tanzania. The countryis increasingly becoming vulnerable to these
criminal offences (Eastern and Southern Africa Anti-Money Laundering Group, 2009;
Government of Tanzania, 2010;Mniwasa, 2015). Money generated from these criminal
activities is laundered in Tanzania and abroad (Mniwasa, 2015). Money laundering and its
predicate offences have had negative effects on Tanzania, its economy and people
(Government of Tanzania, 2010). Considering the adverse effects of the problem, the
Government of Tanzania (GoT) has enacted laws to control money laundering and its
predicate offences. These laws, which have evolved for several decades, set up legal and
institutional frameworks for tackling money laundering offences. One of the anti-money
The financial
intelligence
unit
543
Journalof Money Laundering
Control
Vol.22 No. 3, 2019
pp. 543-562
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2018-0043
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
laundering (AML) institutions is the financial intelligence unit (FIU) vested with powers to
receive and analyse information for purposes of determining commission of money
laundering and/or its predicate offences and to transmit such information to the relevant
authorities and agenciesto enable them to take legal action against suspected offenders.
Mwema (2001),Bagenda (2003),Mniwasa (2004) and Mandopi (2010a) have examined
generally issues about moneylaundering in Tanzania, its drivers and impacts and thelegal
and institutional frameworksfor tackling the problem. With regard to Tanzania’s FIU, some
authors have described superficially the FIU and its functions in controlling money
laundering (Moshi, 2008;Kapinga, 2010;Mandopi, 2010b;Mniwasa, 2015). The description
of the salient features of the FIU in the above literature is not detailed. The analysis of the
role and efficacy of the FIU are not comprehensive. Law-related and non-law factors that
impinge on the operation and the efficacy of the FIU have not been looked into at length.
This article attempts to address the above issues by exploring comprehensively the
establishment, mandates and role of Tanzania’sFIUinfighting against money laundering
and its predicate offences and by uncovering thoroughly some limitations that undermine
the potential of the FIU in the exerciseof its functions.
The objectives of this article are to look at the general featuresand the roles of the FIUs
in fighting against money laundering; to describe the establishment, powers of the FIU in
Tanzania and its significance in fighting against money laundering and the financing of
terrorism; to explore the potentialof Tanzania’s FIU; and to discuss the key challenges that
undermine its effectiveness in fighting money laundering and the financing of terrorism;
and to propose some measuresto address the challenges identified.
Building on the previousliterature, this article describes the general featuresand present
background information on FIUs.It explores Tanzania’s law to elucidate the establishment,
mandates and the roles of the FIU in fighting against money laundering and its predicate
offences. It analyses the law,policy documents and media reports to uncover the potential of
the FIU and examines non-law factors to appraise the effectiveness of the Tanzania’s FIU
and point out its inadequacies.
The remainder of the articleis organized as follows. Section 2 explores FIUs, their models
and functions. Section 3 describes the FIU in Tanzania, its establishment, mandates and
roles in fighting against money laundering and countering the financing of terrorism.
Section 4 analyses the potentials of the FIU and limitations that undermine its potency in
tackling money laundering and the financing of terrorism. It proposes some
recommendations to address the limitations identified. Section 5 presents concluding
remarks and identifies someissues for future research.
2. The financial intelligence units: an overview
Money laundering is a transnational phenomenon and a worldwide problem. Money
laundering[1], which is associated with a wide range of criminal offences including the
financing of terrorism[2], involves actors operating in different countries. Similarly, effects
of money laundering are experienced in different countries (Lucian, 2010;Aluko and
Bagheri, 2012;Keesoony, 2016). Taking into account the transnational nature of money
laundering and the fact that one country cannot tackle money laundering and its predicate
offences singly, there have been international efforts to fight against money laundering.
These efforts include the adoption of the multilateral AML instruments and the
establishment of global authorities and agencies to tackle the problem. The international
instruments include the United Nations (UN) Convention against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances of 1988 (the Vienna Convention), the International
Convention for Suppression of Financing of Terrorism of 1999, and the UN Convention
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