Jan 24, 2012

Dar to enforce cash limit law on travellers

Tanzania is to introduce cash limits for people moving across its borders to fight money laundering and the financing of terrorism and crime. Photo/REUTERS Posted Sunday, January 22 2012 at 16:16 Tanzania is to introduce cash limits for people moving across its borders to fight money laundering and the financing of terrorism and crime. The government said the regulations require travellers entering and leaving the country to inform officials of cash or financial instruments in their possession — including travellers’ cheques, bonds, cheques or convertible securities. The Customs department will monitor cash declarations at all ports, airports, land, sea and air crossings as the country begins enforcing the anti-money laundering measure from this year. Laston Msongole, Deputy Permanent Secretary in the Ministry of Finance and Economic Affairs, said Tanzania will have measures in place to detect physical cross-border transportation of currency and bearer negotiable instruments, including a declaration system or other disclosure obligation. Mr Msongole said the regulations would ensure that competent authorities have the legal powers to stop or restrain currency or bearer negotiable instruments that are suspected to be related to terrorist financing or money laundering, or that are falsely declared or disclosed. The government established the Financial Intelligence Unit (FIU) in 2007 to tackle money-laundering activities. Deputy Commissioner of Police and also Commissioner for the FIU, Samson Kasalla, said that the regulations were still awaiting the signature Minister for Finance and Economic Affairs Mustafa Mkullo before being made public. Money laundering is a worldwide problem, with approximately $300 billion being processed annually in the United States. According to Mr Kasalla, the government will also focus on real estate as part of a review of the Anti-Money Laundering Regulations Act of 2007. “One of the areas to be examined during the review of the Act is real estate development, which has witnessed massive growth in Tanzania. It is an area that can easily be used by launderers to hide dirty money,” he said. FIU Assistant Commissioner Gilbert Nyombi said Tanzania was among countries faced with the problem of money laundering because many financial transactions were settled in cash. According to Mr Nyombi, the FIU faces many challenges in detecting money laundering. “FIU has no mandate to hold suspects after completion of investigations. There are seven cases so far that have been handed over to law enforcers for action,” he said. He said the regulation is going to make it tougher to move terrorist money across borders. In Tanzania, the Proceeds of Crime Act of 1991 criminalises narcotics-related money laundering. However, the Act does not adequately define money laundering, and it has only been used to prosecute corruption cases. The law obliges financial institutions to maintain records of financial transactions exceeding $109 (Tsh100,000) for a period of 10 years. The Bank of Tanzania has issued regulations requiring financial institutions to file suspicious transaction reports, but this requirement is not being enforced, and no mechanism currently exists for receiving and analysing the suspicious transaction. International standards requires travellers crossing national borders to carry an upper limit of $10,000