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MONEY LAUNDERING SURVEY IN EAST AND SOUTHERN AFRICA –
January to June 2006
Charles Goredema, Organised Crime and Money Laundering Programme
ISS Cape Town Office
(PART 1)
1. Introduction
The Organised Crime and Money Laundering programme of the Institute for Security
Studies is dedicated to study the nature, prevalence and impact of money laundering in
sub-Saharan Africa. Since 2003, the study has been limited to eastern and southern
African countries. The study considers and evaluates the responses by states and other
key stakeholders to money laundering, on the basis of principles and practices emerging
in various parts of the world, including the developed economies. Drawing on lessons
from, and comparisons with other parts of the world, the current study focuses on
Botswana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, the Seychelles,
South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. It also covers (to a
limited extent) the Democratic Republic of the Congo. As part of the world community,
these countries are showing an awareness of the importance of money laundering. Their
common membership of the East and Southern Africa Anti Money Laundering Group
(ESAAMLG) is of more than symbolic significance, since it commits them to certain
prescriptive standards, exposes them to peer scrutiny, but also avails to them limited
forms of technical assistance in combating money laundering and the financing of
terrorism.
The study of money laundering involves identification of behaviour patterns of criminal
income. Criminal income is not homogenous. Its scale and the way it impacts on the
host economy depend on the nature of the crime from which it is derived. Economic
crime analysts draw a functional distinction between predatory and market-based (or
related) sources of criminal income. The categorisation is admittedly woven around
stereotypes, but serves a useful purpose. At its simplest, predatory crime involves:i
‘the redistribution of existing wealth. The transfers are bilateral, involving victim
and perpetrator…(and) the transfers are involuntary, commonly using force or
the threat of force, although deceit may suffice. The victims (individuals,
institutions or corporations) are readily identifiable. The losses are also simple to
determine—a robbed (or defrauded ) person, institution or corporation can point
to specific money and property lost.’
Market-based crimes, on the other hand:
‘involve the production and distribution of new goods and services that happen
to be illegal by their very nature. The exchanges are multilateral, much like
legitimate market transactions, involving (among others) producers, distributors,
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