Money laundering laws silent on in-country cases

IRENE SEME

MASERU – Fresh concerns have been raised relating to Lesotho’s capacity in the implementing the Money Laundering and Crimes Act due to insufficient legal remedies. According to the law, movement of large sums of cash only applies when people are crossing in and out of the Lesotho borders, but it is silent on the movement of cash within the country’s regional, district and towns. Literally walking around with large sums of money is not regulated in Lesotho and there is no law that prohibits people from carrying large sums of cash but if one is caught they may have to give proof of origin and source of income.

This is according to the Lesotho Mounted Police Service (LMPS) Spokesperson Senior Superintended Mpiti Mopeli. The concerns were raised as the country inches towards the general elections and it is becoming a trend for politicians and philanthropists to gift people with handy items or cash handouts at political gatherings.

However, whether that act is illegal can only be proven by law. According to those raising concerns the trend could open doors for money laundering and other illegal acts while politicians may take it as a good gesture of support for their political campaigns. Responding to whether it is not illegal to disburse money in public gatherings to gift to attendees, Mopeli said it is not unlawful as there is no law that prohibits such.

He added that some people give out such gifts in the form of material things such as groceries. Since all those gifts are bought with money, as long as givers are able to justify their source of income it is lawful so they are not prohibited by any law from giving in public. Mopeli said: “There is no law that restricts people from carrying large sums of money in cash, neither is there any law that forces them to save with banks.” The LMPS, through the office of Crime Investigation Department (CID), has programmes in which they often reach out to communities to create awareness of the dangers of walking around carrying huge sums of cash, he said.

Mopeli said in instances where a person is caught carrying a large sum of cash whose spurce they fail to justify, police may lay charges against them in accordance with the Money Laundering and Proceeds Act of 2008. To ensure that Lesotho does not become a safe haven for money laundering, the Central Bank of Lesotho (CBL) through it division of Financial Surveillance and Integrity Division, advises the government on appropriate domestic policies to combat it.

The CBL states that this division’s responsibility is to supervise the “Authorized Dealers in foreign exchange (ADs) to enforce compliance with Exchange Control and Anti Money Laundering and Combating of Financing of Terrorism (AML/CFT) Laws” The division is also set to oversee compliance on Authorized Dealers in foreign exchange with limited authority (ADLAs) including Bureaux de Change, which deal in foreign exchange for the sole purpose of facilitating travel related transactions.

The Central Bank as the regulator may from time to time, if it finds it fit, issue new regulations, either to deal with a specific money control need or as a protective measure when the public may be at risk – for scams or being preyed on through cash handouts. According to the current laws, people trying to cross in or out of Lesotho’s borders with cash exceeding M25,000 may need to get clearance for that, but as cited from different concerned parties, it has not been easy to enforce the law because of Lesotho’s position to South Africa and the common monetary area arrangement.

For instance, a lot of South Africans own businesses in the bordering towns on the Lesotho side and vice versa, which makes it almost impossible to suspect anyone crossing the borders, especially when they are known business operators. It becomes even tricky for the banks on both sides of the borders as they often have to accept huge cash-ins and out on the principle of trust and client satisfaction.

According to many who have had to withdraw huge sums of money from banks or stokvel collections, the main reasons are usually to buy cars, livestock and business stock and items, which they say are easier bought by cash, especially from second-hand dealers. On cases where some people are caught carrying large sums of money at the airport or border posts, Mopeli said when such people are handed over to police, the CID interrogates them and if they are not fully convinced with the evidence presented to them, such people are then charged.