The Case of Elections Propaganda…

Foreground: Freeman Aikaeli Mbowe

NEWS ANALYSIS:

By TZ Business News Staff.   

Tanzania’s 2015 elections brought to light one important financial revelation; that Tanzania has people or organizations with capacity to track down financial transactions in foreign banks, but with little capacity to track money exiting the country.

In an interview with a member of staff of this website, Commissioner of the Tanzania Financial Intelligence Unit (FIU), Onesmo Makombe, expressed concern that the Chairman of Tanzania’s main opposition political party, Chama cha Demokrasia na Maendeleo (CHADEMA), Freeman Aikaeli Mbowe  was able to make a bank transfer of USD 1 million from a Dubai bank  during the elections, but without one trace of the money leaving the country.

The alleged three transfers (see bottom two paras) totaling Tsh. 2.3 billion/- ($1,023,029) from a bank account under the company Aretra World Wide Limited– believed to be owned by  Mr. Mbowe in the Dubai-based Noor Bank to three companies in Hong Kong was described by the FIU Commissioner as both perplexing and a matter of  public interest.

“This is a public interest issue which the Unit  has to think about”, Makombe said,  but it turns out the Unit is handicapped on what it can do about the transfers.  The interest and concern relates to a puzzle in which a Tanzanian in public service,  but who also has businesses in the country,  is believed to have transferred Tsh. 2.3 billion to Hong Kong without a trace in the local banking system.

The bank transfer documents were  apparently leaked to the media by  some information agencies showing finances belonging to Mr. Mbowe  moved  from Noor Bank in Dubai to Hong Kong with additional data indicating existence of  a political link to the movement.  That was the political side.  But there is a financial side…

The financial side shows there may be nothing wrong with what happened because a loophole exists permitting  foreign transfer. The country’s Anti-Money Laundering Act used on the mainland, and the Anti-Money Laundering and Proceeds of Crime Act used in Zanzibar permits unlimited  transportation of bundles of hard cash in foreign exchange out of Tanzania.  It is for that reason that no charges may ever be raised against Mbowe. The reports based on Dubai bank documents may have been nothing but elections propaganda.

READ ALSO: Tanzania’s Weak Control of Exit Points

The transfer was a widely circulated piece of information, the commissioner said,  identifying at least three  local newspapers which carried the reports.  The reports were carried in Raia Mwema, Jambo Leo and  Uhuru. Changamoto newspaper also carried the story, alleging that Mbowe transferred the funds to  companies in Hong Kongo during the elections in the following  distribution order:  Puku Hong Kong Limited  Tsh. 461 million ($230,555),  TanChin Trading Co. Limited Tsh. 605 million ($302,614), and Hong Kong Da Web International Tradings Limited Tsh. 980 million ($489,860).

Commissioner Makombe said  information on the Mbowe transfers reached the FIU  through media reports, which he described as one of the many  open sources an investigating institution may use  to get useful information from. He then added: “nobody has reported this transfer to the FIU as a suspicious transaction, but don’t leave with the notion that we are not working on it.”