FATF Status

Namibia is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement  -  23 February 2024

In February 2024, Namibia made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in September 2022, Namibia has made progress on its MER’s recommended actions to ensure a common understanding of ML/TF/PF risk across key stakeholders as well as improve international cooperation. Namibia will work to implement its FATF action plan by: (1) strengthening its AML/CFT risk based supervision through enhancing the human and resource capacities, conducting offsite and onsite inspections informed by supervisory risk assessment tools and applying effective, proportionate and dissuasive sanctions for breaches of AML/CFT obligations; (2) enhancing preventive measures through inspections and outreach to ensure that FIs and DNFBPs apply enhanced due diligence measures as well as TFS obligations related to TF and PF without delay; (3) increasing the filing of beneficial ownership information of legal persons and arrangements, and applying remedial actions and/or effective, proportionate and dissuasive sanctions against breaches of compliance with BO obligations; (4) providing the FIU with adequate human and financial resources, as well as trainings, to improve operational and strategic analysis; (5) improving the cooperation between the FIU and LEAs to enhance the use and integration of financial intelligence in investigations; (6) enhancing the operational capabilities of authorities involved in ML and TF investigations and prosecutions by providing them with adequate resources and targeted trainings; (7) demonstrating the LEAs’ capabilities to effectively investigate and prosecute ML/TF cases; and (8) approving the amended National Counter Terrorism Strategy.

Compliance with FATF Recommendations

The last Mutual Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Namibia was undertaken in 2022. According to that Evaluation, Namibia was deemed Compliant for 5 and Largely Compliant for 16 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

US Department of State Money Laundering assessment (INCSR)

Namibia was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Namibia is not a regional financial center, although it has one of the most highly developed financial systems in Africa. Both regional and domestic criminal activities give rise to proceeds that are laundered in Namibia. Falsification or misuse of identity documents, customs violations, trafficking of precious metals and gems, and trafficking in wildlife, illegal drugs, and stolen vehicles, mostly from South Africa, are regional problems that affect the level of money laundering in Namibia.  Organized criminal groups involved in smuggling activities generally use Namibia as a transit point. Domestically, real estate as well as minerals and gems are suspected of being used as vehicles for money laundering. Namibian authorities believe the proceeds of criminal activities are laundered through Namibian financial institutions, but on a small scale.

The Namibian government has set up Export Processing Zones (EPZs). Companies with EPZ status can set up operations anywhere in Namibia. There are no restrictions on the industrial sector provided the exports are destined for markets outside the South Africa Customs Union region, earn foreign exchange, and employ Namibians. EPZ benefits include no corporate tax, no import duties on the importation of capital equipment or raw materials, and no value added tax, sales tax, or stamp or transfer duties on goods and services required for EPZ activities. There is at least one EPZ at the port of Walvis Bay. The Offshore Development Company (ODC) administers the EPZ regime. The ODC develops and leases multi-purpose industrial parks in four locations where companies can establish operations, including as EPZs.

EU Tax Blacklist

Namibia was removed from the EU Tax Blacklist in December 2018.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           49

World Governance Indicator – Control of Corruption             61

Companies face a moderate risk of corruption in Namibia. While the country suffers from less corruption compared to other countries in the region, corruption remains common. The country's public procurement sector is particularly susceptible to corruption due to the monopoly of state-owned companies (parastatals). The Anti-Corruption Act is Namibia's primary anti-corruption law, covering passive bribery, active bribery, attempted corruption, extortion and bribing a foreign public official. A range of legislation covers other corruption offenses; however, despite a strong framework for curbing corruption, enforcement of the legislation is inconsistent. Gifts and facilitation payments given or received as an inducement for an act are illegal under the Anti-Corruption Act, and there are few reports of gifts being expected. However, facilitation payments are common. For further information - GAN Integrity Business Anti-Corruption Portal

The Namibian government prioritizes attracting more domestic and foreign investment to stimulate economic growth, combat unemployment, and diversify the economy. The Ministry of Industrialization and Trade (MIT) is the governmental authority primarily responsible for carrying out the provisions of the Foreign Investment Act of 1993 (FIA). The MIT is working on new business legislation, the Namibia Investment Promotion and Facilitation Act, but the legislation is still in draft form. As a result, the FIA remains the guiding legislation on investment.

The FIA calls for equal treatment of foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes, the right to remit profits, and access to foreign exchange. The government emphasizes the need for investors to partner with Namibian-owned companies and/or have a majority of local employees to operate in country.

The mining, fishing, and tourism sectors have historically attracted significant investment in Namibia. There are large Chinese foreign investments, particularly in the uranium mining sector. South Africa has considerable investments in the diamond mining and banking sectors, while Canada has investment in gold, zinc, and lithium mining. Spain and Russia have investments in the fishing industry. Foreign investors from the United Kingdom, the Netherlands, the United States, Qatar, and other countries have investments in oil exploration off the Namibian coast, with promising initial results from exploration in Namibia’s offshore Orange Basin, according to government officials and media. Logistics, manufacturing, and mining for diamonds and critical minerals such as gold lithium, and uranium also attract investment.

The investment climate in Namibia is generally positive. Despite global economic disruptions caused by the COVID-19 pandemic and inflation, Namibia has maintained political stability and continues to offer key advantages for inward Foreign Direct Investment (FDI), such as an independent judicial system, protection of property and contractual rights, good quality physical and telecommunications infrastructure, and easy access to South Africa and the region. Namibia is upgrading its transportation infrastructure to facilitate investment and position itself as a regional logistics hub. An expansion at Walvis Bay Port concluded in 2019 and there are plans to extend and rehabilitate the national rail line, notably to improve connection from Walvis Bay port to neighboring countries. Namibia has the best roads on the African continent, according to the World Economic Forum. Namibia also has access to the Southern African Customs Union (SACU, which is also headquartered in Namibia), the Southern African Development Community’s (SADC) Free Trade Area, and markets in Europe and Asia. With the second highest solar radiation in the world and vast land and wind resources, Namibia is also positioning itself to be a global leader in renewable energies and green hydrogen, with potential to improve local and regional access to energy and efforts to combat climate change.

Factors that may inhibit FDI into Namibia are the country’s relatively small domestic market, high transport costs, high energy prices, and limited skilled labor pool. Corruption is a problem but not endemic. A 2019 scandal in the fishing sector resulted in the arrests of ministers and business leaders, cost Namibia around a billion USD, and strained public trust.

As a post-apartheid country with one of the highest rates of inequality in the world, Namibia continues to look for ways to address historic economic imbalances. Proposed legislation, the New Equitable Economic Empowerment Bill (NEEEB), which has been in draft form for more than a decade, will look to create economic and business opportunities for disadvantaged groups, including in the areas of ownership, management, human resource development, and value addition. Parliament aimed to pass the bill in 2022 but did not do so.

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Country Links

Financial Intelligence Centre (FIC)

Bank of Namibia