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FIC UNMASKS MUKULA ILLEGAL DEALERS

By Bennie Mundando

THE Financial Intelligence Centre (FIC) says in 2019, it continued to receive Suspicious Transaction Reports (STRs) related to environmental crimes particularly the illegal harvest, transportation, and export of the prohibited rosewood popularly known as “Mukula”.

In its 2019 trends report, the FIC says these reports originated from areas where the endangered tree is indigenous.

“Further, the Centre observed that the funds generated from the sale of the prohibited tree were declared to financial institutions as proceeds from the sale of timber.

“The suspected perpetrators of the vice are undertaking other businesses in Zambia that involve wood processing. This makes it easy to comingle the criminal activity and proceeds with the legitimate businesses,” reads the report in part.

The FIC says some of the reports analysed involved interception of Mukula by authorities in neighboring countries who identified forged/falsified documents relating to the export of the endangered tree.

It says one of the loopholes that exists and is being exploited by criminals is that Democratic Republic of Congo (DRC), one of Zambia’s neighbouring countries has not effected the ban on the harvest, transportation, and export of the rosewood species.

It says as a result, local Rosewood is suspected to be declared as transiting Zambia from the Democratic Republic of Congo.

It says the Statutory Instrument No. 58 of 2019 : The Control of Goods (import and export) (Forest Produce) (Authorisation of Importation) (Democratic Republic of Congo) order, 2019 which authorized the Democratic Republic of Congo (DRC) to transit forestry products through Zambia expired on June 28, 2020.

It says the SI was manipulated to facilitate forgery of documents for forestry products harvested in Zambia and disguised as being from DRC.

“In the case of Kalowa Mooto and the Director of Forestry & Attorney General (2017/HP/1016) the applicant sought the court to quash the Minister of Lands and Natural Resources’ decision made at a press briefing on 13th June, 2017 that banned the export of all types of timber species for an indefinite period.

“The judge ruled that the Minister of Lands and Natural Resources decision to ban all types of timber export at a press briefing held on 13th June, 2017 was illegal as it was not supported by any provision in the Forests Act No 4. of 2016 A civil servant based in a rural district where the prohibited rosewood is indigenous and earns a monthly income of ZMW 5,000 received funds in excess of ZMW 2.5 million from various third parties mostly of foreign origin. These funds were suspected to be proceeds from the sale of the prohibited rosewood and were subsequently withdrawn in the form of cash,” reads the report in part.

It says environmental crimes pose significant risks to the financial system and society as a whole and has recommended that the national framework for the management, harvesting, transportation and export of forestry resources be reviewed to reduce the incidence of corruption.

It has also recommended that Government should clarify the legal position on the harvesting, transportation and exporting of Mukula following the court judgement and that the SI should not be renewed to reduce the incidences of forgery and illegal harvest, transportation and export of Zambian Mukula which has been detected by jurisdictions outside Zambia.

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