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SADC Advances Fight Against Money Laundering and Terrorism Financing

The Southern African Development Community (SADC) has initiated the process to establish the Committee on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). This move, in accordance with Annex 12 of the SADC Protocol on Finance and Investment, is set to have its inaugural meeting in February 2024. 

The committee’s primary objectives include harmonizing AML/CFT policies, laws, and regulatory practices across SADC Member States based on Financial Action Task Force (FATF) Recommendations and supporting proportional actions against money laundering and terrorism financing in the region.

The decision to operationalize the SADC AML/CFT committee stems from the Ministers of Finance and Investment meeting in the Democratic Republic of Congo in July 2023, influenced by recommendations from studies commissioned under the Support to Improving Investment and Business Environment (SIBE) Programme. 

These studies assessed the risk level for implementing FATF Recommendations and the capacities of national authorities to combat money laundering, terrorist financing structures, proliferation financing, and capacity-building programs.

Mr. Sadwick Mtonakutha, the Director Finance of Investment and Customs at the SADC Secretariat, emphasized the organization’s commitment to combating AML/CFT, considering the rising incidence of money laundering crimes and the escalation of criminal networks in the region. 

The operationalization of the committee aligns with SADC’s goal to maintain the region as an investment destination with stable, efficient, and integrated financial systems.

The SADC AML/CFT Committee’s establishment enables the region to address AML/CFT concerns in both banking and non-banking sectors. It aims to mitigate the impact of criminal economic activity and promote integrity and stability in financial markets. 

Following the SADC Protocol on Finance and Investment, member states are encouraged to adopt FATF recommendations, and the SADC Secretariat has formalized its relationship with the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) Secretariat through a signed Memorandum of Understanding (MoU).

The SADC AML/CFT Committee, set to collaborate closely with the ESAAMLG Secretariat, will monitor member states’ technical compliance with FATF recommendations, facilitate capacity-building efforts, and introduce legal, political, and institutional improvements. 

This initiative aligns with the SIBE Programme, a five-year endeavor funded by the European Union, aiming to develop the region into a SADC investment zone, fostering intra-regional investment and Foreign Direct Investment (FDI), particularly for Small and Medium Enterprises (SMEs).

Source: SADC Secretariat

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