Ethiopian Review

ADDIS ABABA, ETHIOPIA — The Council of Ministers has endorsed a bill on Friday, June 19, 2009, criminalizing the practice of money-laundering. It sent this bill to Parliament for final approval in what industry experts say is a long overdue law.

Money laundering is a practice used by criminals to conceal the source of illegally obtained money and disguise it as clean money earned a legitimately manner. The source of the phrase is, however, very controversial. Some associate it to Al Capone’s, an American mob boss, attempt to use his laundromat business to hide his ill-gotten gains. Still others say it is a concept developed from “dirty money made clean”. But it is Britain’s newspaper, The Guardian, which is credited for identifying the practice as “laundering.”

It is a first for Ethiopia to issue a law of its own to control the movement of money whose origin is not clearly identified, although the penal code revised in 2005 has few provisions that criminalize the practice. The current bill was first scheduled to be ratified by Parliament in 2006, together with the counterterrorism bill, which too is in the legislative ladder of the Parliament.

Since 2004, Ethiopian authorities have been trying to design a law in order to control money laundering. They had developed a roadmap in combating the circulation of dirty money and the financing of terrorism, with the help of the United Nations Office on Drugs and Crime (UNODC).

The government has been under intense pressure from international groups, including the government of the United States, to introduce this law. The US government has reportedly informed Ethiopian authorities that it would not be possible for American based banks to do business with countries where there are no such laws. Its diplomats in Addis Abeba have been very keen to push the authorities to speed up the legislative process in ratifying anti-money laundering (AML), sources disclosed.

“Such a bill is both essential and timely since Ethiopia remains in partnership in the global efforts geared toward prevention and control of money laundering and sponsoring terrorist acts,” a statement issued by the Prime Minister’s office said following the approval of the bill.

The bill is authoured by officials at the Central Bank. Teklewold Atnafu, governor of the National Bank of Ethiopia (NBE), and his top expert on the subject, have briefed members of the Council. The bill includes a provision that would establish a Financial Intelligence Unit, sources disclosed.

A provision in the bill also obliges depositors to disclose the source of their money when depositing or transferring funds, sources disclosed.

- By Tamrat G. Giorgis | Addis Fortune