- On Monday, anti-money laundering measures already in effect in Tanzania were extended to
- Money laundering schemes in Zanzibar, situated off the coast of East Africa in the Indian Ocean, generally take the form of foreign investment in the tourist industry.
Zanzibar is taking steps to clean up its reputation as a haven for money launderers
The new law requires people intending to move 10,000 U.S. dollars or its equivalent in cash out of Zanzibar to declare their intentions to the TRA.
After years of being seen as haven for money launderers, Zanzibar has taken the first step in cleaning up its ‘soiled’ name.
On Monday, anti-money laundering measures already in effect in Tanzania were extended to Zanzibar Island.
In a statement, Tanzanian Revenue Authority (TRA) said that the move was aimed at sensitizing the public on the importance of declaring their financial status in line with the law.
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The new law requires people intending to move $10,000 or its equivalent in cash out of Zanzibar to declare their intentions to the TRA.
“This law is practiced across the world,” said Richard Kayombo, TRA Director for Taxpayer Education and Service.
In 2012, Tanzania parliament passed the anti-money laundering act and in 2017, it started to implement the act, which require all travellers to declare cash of at least Sh1 million ($10,000) at its ports and borders.
“The law forbids one from moving 10,000 U.S. dollars or more, or its equivalent in Tanzanian shillings or any foreign currency, across Tanzania’s borders without declaring the same to TRA’s Customs Department,” he said.
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The government also tightened forex controls by raising the minimum capital requirement for forex bureaus, placed a moratorium on new operations and required extant traders to apply for new licenses.
Until now there was no restriction on physical transportation of currencies in Tanzania which provided fertile grounds for capital flight out of Tanzania and money launderers exploiting the loophole.
While Tanzania is not a major regional financial center, its location at the crossroads of southern, central and eastern Africa makes it a prime location for smuggling activities that generate illicit revenue, including the trafficking of narcotics, arms, and humans.
According to US International Narcotics Control Strategy Report (INCSR) 2015, money laundering schemes in Zanzibar, situated off the coast of East Africa in the Indian Ocean, generally take the form of foreign investment in the tourist industry.
Bank of Tanzania estimates that the equivalent of $650 million is transferred each month through mobile money transfers.
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