AML & CFT Education
Learn how to recognize and prevent money laundering and terrorist financing risks.
Money Laundering Basics
What is Money Laundering?
Money laundering is the illegal process of making money generated through criminal activities appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean. (disguise the source)
Stages of Money Laundering
The process of laundering money typically involves three stages: placement, layering, and integration.
Placement injects the “dirty money” into the legitimate financial system.
Layering conceals the source of the money through a series of transactions and bookkeeping tricks.
Integration , the final step, is when the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it.
This educational material is for awareness purposes.
Anti-Money Laundering (AML) & CFT
What is Anti Money Laundering?
Anti-money laundering (AML) refers to the activities financial institutions perform to achieve compliance legal requirements to actively monitor for and report suspicious activities.
What is Countering/Combating Financing of Terrorism (CFT)?
What is Terrorism?
Terrorism is the unlawful use of violence and intimidation, especially against civilians, in the pursuit of political aims. These aims may include, but not limited to:
Attract media attention to obtain recognition of their cause/ideology;
Influence government decision;
Weaken or embarrass government and/or security forces;
Free prisoners;
Discourage foreign trade and investment;
Produce or instill fear.
CFT, or Combating the Financing of Terrorism, refers to a set of standards and regulatory systems intended to prevent terrorist groups from laundering money through the banking system or other financial networks. These practices require accountable institutions to collect identifying information on their clients, as well as the origins of funds.
Governing Legislation
There are regional and International bodies which issue guidelines to which countries should conform to. In the context of Eswatini, we are a member to Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) which is a regional body. By virtue of our membership to ESAAMLG, we are also members to Financial Action Task Force (FATF) which is an international body. The standards set at international and regional levels must then be incorporated into the country’s legislation.
The FATF has passed recommendations which accountable institutions should adopt in order to comply with international standards. The following laws are relevant to the AML/CFT in Eswatini:
Money Laundering and Terrorist Financing (Prevention) Act, 2016 (as amended)
Anti-Money Laundering (UNSCR) Regulations, 2016
Prevention of Corruption Act, 2016
Human Trafficking Act, 2009
Electronic Evidence Act, 2009
Prevention of Organized Crime Act, 2018
Sexual Offences and Domestic Violence Act, 2018
Witness Protection Act, 2018
Regulatory Framework
The Central Bank of Eswatini is the regulatory body with regards to AML. It will issue guidelines to Accountable institutions and monitor their compliance to set AML/CFT laws.
The EFIU is an autonomous central national agency responsible for receiving, requesting, analyzing and disseminating to competent authorities' disclosures of financial information in order to counter money laundering and financing of terrorism.