Central bank says unexplained wealth law would reduce financial crime

The Bank of Namibia (BoN) says the law that will enable the state to examine whether people’s lifestyles match their earnings or salaries would assist Namibia in reducing financial crime.

Minister of justice Yvonne Dauseb last week tabled the Prevention of Organised Crime Act (Poca) amendment bill, which would see the state enforce laws facilitating lifestyle audits, including the recognition of “unexplained wealth orders”.

The bill was passed by the National Assembly on Wednesday.

BoN spokesperson Kazembire Zemburuka says the main aim of an unexplained wealth law in Namibia is to curb financial crime.

He says the law would also help minimise wrongdoers benefiting from the proceeds of financial crime, and would help ensure Namibia’s financial crime prevention and combating framework is aligned with and enables compliance with applicable United Nations obligations and international Financial Action Task Force and anti-money laundering standards.

“In addition, the use of unexplained wealth orders will help Namibia reduce financial crime by timeously adapting the prevention and combating regime, changing financial crime risk patterns.

“By effectively utilising unexplained wealth orders, the government could prevent and combat financial crime and maintain financial integrity more effectively,” Zemburuka says.

He says the implementation of unexplained wealth orders plays a crucial role in fostering a robust and transparent financial system, thereby alleviating concerns surrounding the undue accumulation of wealth.

“Unexplained wealth orders are intended to ensure that wrongdoers . . . explain how they have accumulated their wealth, especially where they are not gainfully employed,” he says.

Zemburuka says the bill contains provisions to prevent privacy breaches, arbitrary and discriminatory decision-making, and the use of provisions against law-abiding citizens.

He says the introduction of unexplained wealth orders should not be a cause for concern for law-abiding citizens.

He says the administration of unexplained wealth orders would involve a judicial process, requiring those affected to appear in court to prove their assets have been obtained legally and in a just and justifiable manner.

“To alleviate concerns about privacy breaches, unexplained wealth orders will not be carried out at the discretion of any individual or organisation, but will be safeguarded by a judicial process.

“The involvement of the Namibian judiciary will ensure fairness for all parties involved, with the rule of law being upheld at all times,” Zemburuka says.

The Poca amendment bill includes a clause, stating the prosecutor general may apply to the High Court for an unexplained wealth order, declaring the property concerned an unexplained asset.

“The unexplained wealth order must require the person who is the owner, holder, custodian or bona fide possessor of the unexplained asset to provide an affidavit under oath that sets out the nature and extent of his or her interest in the property in respect of which the order is made. An explanation must be given on how he or she obtains the wealth, including how any cost incurred in obtaining the property were met, and if the property is held on behalf of a third party.”

The Namibian last week reported that the Institute for Public Policy Research (IPPR) researcher Rosevitha Ndumbu said while privacy concerns are valid, legislation can be designed to strike a balance between individual privacy rights and the public interest.

She said proper legal safeguards can ensure that lifestyle audits are conducted fairly, respecting due process and protecting sensitive personal information.

“Overall, enacting laws to enforce lifestyle audits, including unexplained wealth orders, strengthens Namibia’s anti-corruption framework, promotes transparency, and helps restore public trust,” she said.

Ndumbu said it is important to carefully balance the benefits and drawbacks of lifestyle audits, taking into account privacy concerns, fairness, proportionality, and adherence to legal safeguards.

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