Namibia reports progress on financial grey-listing

Namibia will over a two-year period demonstrate its intent to be removed from the Financial Action Task Force’s (FATF) grey list, despite progress that has already been noted.

Providing an update on efforts to remove the grey-listing, Financial Intelligence Centre (FIC) director Bryan Eiseb said Namibia had made notable progress regarding efforts to strengthen its anti-money laundering regime, but added that there was still a long way ahead towards full compliance.

“The FATF noted that Namibia has made good initial progress with anti-money laundering risk-based supervision, increasing the filling of beneficial ownership information, and having initiated some tangible efforts to strengthen the existing capacity of law enforcement in investigating complex financial crimes,” he said.

The FATF, however, said Namibia was lacking with regards to its ability to prevent tourism-related and financially complex crimes, according to Eiseb.



Next 24 months pivotal

The FIC director said the FATF commended Namibia for its strong commitment and encouraged the country to continue with its ongoing efforts to remediate the strategic deficiencies in the anti-money laundering regime, as well as implement an action plan in line with established timelines.

The next 24 months would prove pivotal to Namibia being removed from the FATF’s grey list, resulting in by-yearly reporting.

“Namibia is now entering the period of compulsory reporting, which commences in November. The compulsory reporting ends in May 2026 and is divided into reporting cycles of six months, which will demonstrate that it has largely addressed the remaining 13 action items as set out in the timelines of the action plan,” Eiseb said.



Reputational damage

Namibia had been placed on the grey list because concerns had not been rectified to the satisfaction of FATF. A national focal committee has been put in place to oversee the execution of the plan to restore international confidence in the country, investment firm NinetyOne said in advisory to investors following the grey-listing.

“FATF reviews are broken down into compliance, with 40 recommendations, six of which are considered core and 11 immediate outcomes on the effectiveness of the control environment,” NinetyOne said at the time.

Following a review in 2021, Namibia had 72 recommended actions to implement; at the time of the plenary, the country still had 13 actions outstanding.

Touching on the effects of the grey-listing, NinetyOne said there was an obvious reputational risk Namibia would be exposed to as a consequence of the decision taken by the FAFT. “Clearly, grey-listing will be negative for Namibia in terms of reputational damage, and higher transactional, administrative and funding costs will result in a less efficient economy with more frictional costs,” it said.