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EFIU LEAKS MESS; WHAT’S NEXT?

26/04/2024 07:15:00 Editor

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Not many people knew of the Eswatini Financial Intelligence Unit (EFIU) until the leakage of confidential financial information allegedly belonging to various people across all sectors of our society and dubbed ‘Swazi Secrets’ by the International Consortium of Investigative Journalists (ICIJ), an elite investigative media company.

While some are demanding accountability from the EFIU, others have directed their anger at the bank employees who handled their money or failure thereto. Those less knowledgeable about journalism see ICIJ among those needing to account, but this can only happen if and where they may have got their facts wrong.

More than 890 000 internal records landed on the desks of ICIJ, which has set out to unpack each of these transactions carried out by our politicians, businesspeople and other high-profile members of our society. This purportedly took place over a period of approximately six years, beginning in 2016. The ICIJ cannot be blamed for the scoop, which it describes as the biggest leak in Southern Africa. This is what investigative journalism is all about.

It is not, however, about obtaining the information and abusing it with the intent to drive a particular narrative, such as using a non-fraudulent transaction and lumping it together with those that are. A counter-investigation would be needed to determine if any of the information has been used unethically, but without it, it is entirely up to those cited to clear their names.

Jaws have dropped and tongues are still wagging over the details laid bare, opening another window to who has money and where and how it is used or even stolen in this country. Bank managers have had sleepless nights since, no doubt, and it will come as no surprise to hear or see accounts closed or moved to other institutions considered safer and more trustworthy. These leaks suggest, however, that there is nowhere to hide anymore, except perhaps under pillows, beds and couches.

Confirm

The government is frantically trying to reframe the situation, but it’s not an easy task, especially because on the one hand it does not want to confirm or authenticate the leaked documents, while on the other it is using them to highlight the credibility of our financial systems in handling potential interference. I will not labour on the impact these leaks have on the country and its regulatory institutions as this was aptly articulated by Economist Sanele Sibiya in his column ‘Economics for humans’ on Wednesday.

What matters now is what happens next? The vault has been blown open and the cash is flying all over the place. How will the government clean up this mess to restore confidence in our financial retaliatory system and assure investors it is safe to do business in Eswatini? Undoubtedly, there is a need for accountability from various sources, including having our law enforcement agencies taking action on transactions that do not meet legal requirements. It is important to note that it is not all the transactions leaked that are illegal or fraudulent. The financial institutions have an obligation to report transactions they deem not usual. This forms part of their need to comply with Section 12 of the Anti-Money Laundering Act of 2011.

According to the EFIU, flagging may be prompted by simple things such as one suddenly receiving a large amount of money that is not a common feature in his/her accounts; quick movement of funds in the account; money being sent or received by a person of interest to money laundering monitoring agencies or a criminal; or the source of funding raising questions. What is also evident, though, given the anger of those whose records have been revealed, is that the financial institutions do not let you know that you have been reported to EFIU.

Corruption

The leaks come at a time when the country has set its sights on eradicating corruption, following a tall order from His Majesty the King, who not only wants to see the corrupt exposed but also tried and convicted this time around.
In response to this call, Prime Minister Russell Dlamini set up an anti-corruption task team, which has seen Chief Justice (CJ) Bheki Maphalala approve a warrant of arrest for the ACC concerning the Ecsponet E340 million ‘heist’, yet for almost seven years we were made to believe this was not possible because the CJ had intimated that the ACC had no powers to arrest. We have also seen arrests regarding a probe into the corruption at the Home Affairs Ministry, which has revealed that government immigration services had migrated to some of the employees’ backyards.

The proceeds of criminal activities unit (POCA) has also been active of late with the seizure of suspected proceeds of crime, including homes and cars and the freezing of bank accounts. However, these are what people refer to as the small fish. The biggest test is bobhabuli. Now we have a mother of all hot potatoes on the laps of law enforcement agencies. We wait with bated breath to see what happens next. While great efforts are being made to find the source of the leaks, we expect no less effort to separate the good from the bad with these records and hold those who have cases to answer accountable.