FATF AML Deficiency List
Non - Compliance with FATF MER Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score
)Weakness in Government Legislation to combat Money Laundering
Namibia is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.
Latest FATF Statement - 27 February 2015
The FATF welcomes Namibia’s significant progress in improving its AML/CFT regime and notes that Namibia has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011. Namibia is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Namibia will work with ESAAMLG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Namibia was undertaken by the Financial Action Task Force (FATF) in 2009. According to that Evaluation, Namibia was deemed Compliant for 2 and Largely Compliant for 5 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.
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
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 51
World Governance Indicator – Control of Corruption 66
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 economy is heavily dependent on the extraction and processing of minerals for export. Mining accounts for 11.5% of GDP, but provides more than 50% of foreign exchange earnings. Rich alluvial diamond deposits make Namibia a primary source for gem-quality diamonds. Marine diamond mining is increasingly important as the terrestrial diamond supply has dwindled. The rising cost of mining diamonds, increasingly from the sea, combined with increased diamond production in Russia and China, has reduced profit margins. Namibian authorities have emphasized the need to add value to raw materials, do more in-country manufacturing, and exploit the services market, especially in the logistics and transportation sectors.
Namibia is the world's fifth-largest producer of uranium. The Chinese owned Husab uranium mine in expected to start producing uranium ore in 2017. Once the Husab mine reaches full production, Namibia is expected to become the world’s second-largest producer of uranium. Namibia also produces large quantities of zinc and is a smaller producer of gold and copper. The mining and quarrying sectors employ 2% of the population. Namibia's economy remains vulnerable to world commodity price fluctuations, and drought.
Namibia normally imports about 50% of its cereal requirements; in drought years food shortages can be a problem in rural areas. A high per capita GDP, relative to the region, hides one of the world's most unequal income distributions. A priority of the current government is poverty eradication.
A five-year, Millennium Challenge Corporation compact ended in September 2014. As an upper middle income country, Namibia is ineligible for a second compact. The Namibian economy is closely linked to South Africa with the Namibian dollar pegged one-to-one to the South African rand. Namibia receives 30%-40% of its revenues from the Southern African Customs Union (SACU). Volatility in the size of Namibia's annual SACU allotment complicates budget planning.
Agriculture - products:
millet, sorghum, peanuts, grapes; livestock; fish
meatpacking, fish processing, dairy products, pasta, beverages; mining (diamonds, lead, zinc, tin, silver, tungsten, uranium, copper)
Exports - commodities:
diamonds, copper, gold, zinc, lead, uranium; cattle, white fish and molluscs
Imports - commodities:
foodstuffs; petroleum products and fuel, machinery and equipment, chemicals
Investment Climate - US State Department
Namibia is a stable, democratic country, and the Government of the Republic of Namibia is committed to stimulating economic growth and employment through foreign investment. The Ministry of Industrialization, Trade and SME Development is the governmental authority primarily responsible for carrying out the provisions of the Foreign Investment Act of 1990 (FIA). The government emphasizes the need for investors to partner with Namibian-owned companies and/or have a majority of local employees in order to operate in the country. The past year has seen an increase in high-profile challenges to government-awarded tenders in the energy, infrastructure, and water sectors. Namibia’s judiciary, widely regarded as independent, is reviewing those tenders and has suspended some of them due to procurement process irregularities. In late 2015, the Namibian parliament passed a new procurement act that is more in line with international standards and aims to ensure greater transparency.
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 between investors and the government, the right to remit profits and access to foreign exchange.
There are large Chinese foreign investments in Namibia, particularly in the uranium mining sector. Australia and the United Kingdom (U.K.) are other important investors in uranium mining. South Africa has considerable investments in the diamond mining and banking sectors, while the U.K. has additional investment in zinc and copper mines. Foreign investors from Brazil, Spain, the U.K, Netherlands, the United States and other countries have expressed interest in oil exploration off the Namibian coast although the interest has dwindled with the worldwide drop in petroleum prices. European and Chinese companies are investing in the fisheries sector.
Namibia has a relatively small domestic market, high transport costs, high energy prices, and limited access to skilled labor. These disadvantages are offset by the main factors facilitating Namibia's inward Foreign Direct Investment (FDI): political stability; a favorable macroeconomic environment; an independent judicial system; protection of property and contractual rights; good quality of infrastructure; and easy access to South Africa. Namibia also has access to the Southern African Customs Union (SACU); the Southern African Development Community’s (SADC) Free Trade Area; and markets in Europe. The investment climate is generally positive.
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