eBusiness Weekly
Enacy Mapakame
The Insurance and Pensions Commission (IPEC) is increasing its efforts to promote Anti-Money Laundering or Combating the Financing of Terrorism (AML/CFT) awareness within the industry.
This comes as the Commission has identified some deficiencies perpetuating the challenge.
In Zimbabwe, money laundering is done primarily through the banking system, underground banking networks, and through the purchase of assets.
The real estate industry is one of the sectors vulnerable to money launderers.
In light of these challenges, IPEC revealed it conducted two dedicated AML/CFT onsite inspections in 2022 at a time the Commission continues to implement a risk-based approach to AML/CFT supervision, thereby directing resources to areas presenting higher ML/CTF risks.
The Commission said some of the deficiencies include lack of sound corporate governance systems and oversight of AML/CFT issues as well as inadequate client onboarding procedures to guide staff on AML/CFT requirements.
“An AML/CFT unit was established to ensure that there is improved monitoring and enforcing AML/CFT compliance. Supervised entities are required to demonstrate their understanding of the money laundering and terrorist financing risks to which they are exposed and implement the appropriate mitigation measures.
“To this end, entities updated their institutional risk assessments. Similarly, IPEC updated its sectoral risk assessment with the life insurance sub-sector being rated medium low.
“Two dedicated AML/CFT onsite inspections were conducted during the period under review,” IPEC said in its annual report.
The commission added that offsite monitoring was being done through review of AML/CFT quarterly returns.
However, IPEC also pointed to limited understanding of the AML/CFT compliance role, and insufficient resources for the function.
It also noted insufficient documents for verification of customer identity.
“Lack of risk categorisation of clients, and application of enhanced due diligence measures for high-risk clients. The Commission continues to promote AML/CFT awareness within the insurance and pensions sector.
“Two industry trainings were conducted in 2022.
“The first training done in January 2022 virtually targeted Compliance Officers and technical staff and was on AML/CFT Obligations and Quarterly Return Templates,” the Commission said.
Meanwhile the commission says it has made significant progress toward resolving the pre-2009 loss of value as recommended by Justice Smith’s Commission of Inquiry.
IPEC added that the 2009 Compensation Regulations are currently going through the necessary governance processes.
“The Commission remains hopeful that gazetting of the regulations will be done before the end of Q1 2023. Allowing for approval of compensation schemes and mobilisation of resources, we expect the actual compensation to commence in September 2023.” IPEC said.
The 2009 period saw pension values wiped off, creating disgruntlement among pensioners.
Following the economic meltdown of 2008, some pensioners received annuity payments equivalent to U$$0,80 while others received lump sum payments of US$30 to compensate over 10 years of consistent contributions and hard work.
The US$75 compensation for loss of value is now 90 percent, which still remains inadequate to heal the market from that catastrophic period.
