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The Financial Intelligence Centre (FIC) has revealed that Zambia recorded illicit financial transactions amounting to US$3.5 billion in 2024, predominantly driven by private sector commercial activities involving multinational enterprises.
However, the Centre noted a reduction in corruption-related reports during the same period.
According to the 2024 FIC report, most of the illicit flows were linked to business transactions by recently incorporated companies with little to no commercial activity, while a smaller portion was attributed to criminal networks and corrupt practices.
The report identified 1,203 individuals and entities involved in illicit transfers — comprising 401 corporate entities and 802 individuals, many of whom were foreign nationals.
These individuals either transacted directly or used Zambians as business partners, employees, or agents, often paying them commissions for facilitating the transactions.
The FIC cited a notable case involving a syndicate of both foreign and Zambian nationals who registered 13 companies using the same business address in 2023.
Although Zambians were listed as the beneficial owners, actual management and control of the accounts were dominated by foreign nationals.
FIC Director General, Clement Kapalu, explained that many of the listed Zambian owners had no known sources of income or active bank accounts, raising serious suspicions.
“Financial analysis showed a transactional pattern of third-party cash deposits between US$75,000 and US$100,000, followed by inter-company transfers and final outward remittances labeled as payments for furniture or goods,” Kapalu said.
The analysis further revealed that over US$100 million had been transferred to jurisdictions in the Middle East and Asia by the 13 companies. Their suspected operations included illegal mining, cross-border currency smuggling, and illegal wildlife trade. None of the companies were tax compliant.
Kapalu added that intelligence received from a foreign counterpart confirmed the same group had replicated the scheme in another country, suggesting a transnational illicit financial network.
The case has since been referred to relevant law enforcement agencies for investigation on suspicion of tax evasion, fraud, and money laundering.
Suspicious Transactions Down, But Red Flags Remain
The FIC received 8,981 Suspicious Transaction Reports (STRs) in 2024 — a 12.7 percent drop from 10,293 in 2023. Common red flags included unusually large cash deposits in USD, structured transactions just below reporting thresholds, and immediate international transfers after fund accumulation.
“The use of Zambian-owned entities and accounts to hide beneficial ownership remains a consistent trend,” Kapalu said.
He noted that reliance on cash transactions continues to pose serious money laundering risks, given the difficulty in tracing anonymous cash movements.
Commercial banks were the largest source of STRs, accounting for 96.9 percent (8,710 reports), followed by money value transfer service (MVTS) providers, which submitted 184 reports, up from 163 in 2023. Zambia had three registered virtual asset service providers (VASPs) in 2024.
During the reporting period, the Centre disseminated 951 intelligence reports to law enforcement agencies. Of these, 573 were sent to the Zambia Revenue Authority (ZRA), resulting in tax assessments worth K28.9 billion from 326 reports.
Feedback from other agencies showed 3 convictions and 7 non-conviction-based forfeitures, with assets worth US$26.5 million and K71.5 million forfeited.
Additionally, the FIC froze 34 bank accounts and 10 mobile money accounts, totaling US$4.7 million and K176.9 million, compared to US$2.8 million and K126.5 million in 2023.
“These actions were taken to facilitate further investigations by competent authorities,” Kapalu stated.
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