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Cyber security experts raise alarm over money crimes

By Semaj Itosno, Nairobi, Kenya

Money laundering and terrorism financing are currently the two biggest threats facing financial institutions in Africa, according to security experts.

Cyber Security Africa, a UK-based information and e-commerce security provider, says banks and other money-transfer service providers are investing huge sums of money and personnel in countering these crimes but they continue to pose legal and financial challenges to them.

“Firms today understand the need for a company-wide anti-money laundering culture, one that can adapt to the changing external environment,” said Sammy Kioki, the African Alliance Manager for Cyber Security Africa. “People play an important part in that culture. Each member of staff, regardless of position, has a role to play in safeguarding the reputation of the firm and minimising the financial risk caused by money laundering.”

Kioko was speaking on Monday in Nairobi at a press briefing to announce a three-day conference on "Combating Financial Crime in East Africa" to be held in Kigali, Rwanda, on September 26 to 28, at Serena Hotel. 

Global menace

In one of its latest reports released late 2011 the United Nations Office on Drugs and Crime (UNODC) said criminals may have laundered around USD1.6 trillion in 2009, one fifth of that coming from the illicit drug trade.

According to the report the USD1.6 trillion represents 2.7% of global gross domestic product (GDP) in 2009.

“This figure is in line with the range of two to five per cent of global GDP previously established by the International Monetary Fund (IMF) to estimate the scale of money-laundering,” partly reads the UNODC report , entitled Estimating illicit financial flows resulting from drug trafficking and other transnational organized crime.

The report also says that the “interception rate” for anti-money-laundering efforts at the global level remains low.

Koko said financial institutions should ensure their employees have the necessary skills to protect the organisations from these vices. “It is also important to ensure procedures and processes are implemented throughout the organisation, from head office to regional branch,” he said. “Through training, staff can achieve and understanding of the importance of money laundering prevention, the part they play and the best practice. This will be cheaper in the long run than dealing with the repercussions.”

He said the regional conference – organised by Cyber Security Africa and sponsored by technology company IBM, security training firm Eacademy Group and other stakeholders – will provide solutions on countering money laundering and terrorism financing and their related implications on economies and financial systems.

The workshop will include atwo-day training on anti-money laundering and counter-terrorism financing on September 27 and 28, 2012. Some of the key issues to be addressed include, among others, adopting the latest best practices to protect your organisation from fraud, understanding changes in the money service business regulatory landscape to ensure compliance, mastering anti-money laundering audits to meet institutional needs and satisfy regulators.

"We will explore anti-money laundering issues in emerging payment systems, securing your IT infrastructure as well as other key issues like anti-money laundering laws, identifying money-laundering activities, risk management, sanctions risk, politically exposed person risk and the financial action task force,” he said.

According to UNODC Globally, it appears that much less than one per cent of illicit financial flows are currently being seized and frozen.

“Tracking the flows of illicit funds generated by drug trafficking and organized crime and analysing how they are laundered through the world’s financial systems remain daunting tasks,” stated UNODC Executive Director Yury Fedotov, who launched the report today in Marrakech, Morocco, during the week-long meeting of the Conference of the Parties to the UN Convention on Corruption. 

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