By Silndzelwe Nxumalo
IN a bid to curb potential risks of money laundering and illicit financial flows, the Central Bank of Eswatini (CBE) has cautioned the public against the use of point-of-sale (POS) gadgets known as speed points linked to bank accounts held in foreign countries.
In a statement issued on Monday, the CBE said the use of POS gadgets connected to foreign bank accounts is not permitted in the Kingdom of Eswatini and that helps the Bank to ensure the traceability of financial transactions for the benefit of the citizens.
The Central Bank said the curtailing of the usage of POS gadgets linked to accounts in foreign countries displays its commitment to promoting financial stability and regulating electronic transactions within the Kingdom of Eswatini, stressing that all gadgets used for payment purposes must be directly linked to local bank accounts only. The CBE said that this was in line with their strategic objective to bolster domestic economic growth and maintain financial stability.
The bank further encouraged all residents and businesses to comply with this requirement and further encouraged the public to approach local financial institutions for similar services and product offerings.
The Bank is of the view that adherence to this requirement would contribute to the growth and resilience of the local economy while enjoying the existing security and convenience provided by the country’s banking system.
“Failure to adhere to this requirement may lead to penalties stipulated in relevant financial services laws and regulations,” reads the statement. At a regional level, the Southern African Development Community (SADC) Secretariat has stepped up the region’s resolve to fight money laundering, terrorism financing, and proliferation finance. There is a common dislike to money laundering, terrorism finance, and proliferation finance in SADC and Member States have committed themselves, through the Eastern and Southern Africa Anti-Money Laundering Group of Countries (ESAAMLG), to take effective measures against the vices.
Information sourced from the SADC website states that it is against this background that SADC convened a Validation Workshop in Johannesburg, South Africa, from March 21 – 24 March 2023 to discuss ways to facilitate the convergence of the anti-money laundering and combatting financing of terrorism policies, laws, and regulatory practices in Member States, with the requirements of the Financial Action Task Force (FATF).
Participants deliberated on ways to support effective and proportional action against money laundering and the financing of terrorism in the Region. The specific objective of the workshop, which was backed by the European Union (EU) supported Support to Investment and Business Environment Enhancement Programme (SIBE), was to assess the implementation of FATF recommendations to ensure effective and proportionate measures against money laundering in SADC Member States.
The workshop was anchored on Annex 12 of the SADC Protocol on Finance and Investment. The Protocol foresees compliance of all SADC Member States with the FATF recommendations in line with set guidelines.
SADC seeks to ensure that there is a convergence of laws to combat money laundering, proliferation and terrorism finance, and regulatory practices of State Parties.
FATF leads global action to tackle money laundering, terrorism, and proliferation financing. Its purpose is to establish international standards and to develop and promote policies, both at national and international levels, to combat money laundering and the financing of terrorism. FATF recommendations set out a comprehensive and consistent framework of measures that countries should implement to combat money laundering and terrorist financing as well as the enhancement of proliferation of weapons of mass destruction.
FATF Recommendation 7 requires countries to implement targeted financial sanctions to comply with the United Nations Security Council Resolutions (UNSCRs) relating to the prevention, suppression, and disruption of the proliferation of weapons of mass destruction (WMD) and its financing.
Money laundering is the process of illegally concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement, or gambling, by converting it into a legitimate source. Terrorist financing is the raising of money involving the solicitation, collection, or provision of funds, with the intention that it may be used to support terrorist acts, terrorists, or terrorist organisations.
Proliferation financing is defined by the FATF as the provision of funds or financial services used for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling, or use of nuclear, chemical, or biological weapons and their means of delivery and related.