RESOURCE MATERIAL SERIES No. 58

CURRENT SITUATION AND COUNTERMEASURES AGAINSTMONEY LAUNDERING:TANZANIA’S EXPERIENCE
Saidi Ally Mwema *I. INTRODUCTION
Prior to the mid-1980s, our country had
no orientation with organized crimes. The
crime pattern was largely dominated byordinary traditional offences such as simple
thefts, sporadic incidents of armed
robberies, simple forgeries, and the like.
We could not by then envisage thatorganized criminal syndicates would one
day transcend across our borders with suchforce and speed.
Early symptoms of organized crimes
were first detected in 1983 when the
country experienced serious economiccrisis1. However, the nature and extent oforganized crimes by then differs from what
we are experiencing today. The organizedcriminal syndicates which dominated thescene were largely based within the
country, without any external connections.
As a result, even the legislation which wasenacted in 1984 to cater for that situation
contained fewer offences that forms partof the organized offences2. As a matter offact, the Act 3 was specifically tailoredagainst International Economic Saboteurs.
Though some of the provisions of the Act
are still valid and operational, their* Dar es Salaan Regional Crimes Officer, Tanzania
Police Force, Tanzania
1 This was the time when the then Prime Minister,late EDWARD MORINGE SOKOINE, declared andled the war against economic saboteurs.
2 The economic and organized crime control Act
number 13 of 1984.
3 Ibid;428

application to what is taking place today
in the organized crime world is very
difficult and below the required standards.
II. THE CURRENT PATTERN OFORGANIZED CRIME IN TANZANIAIn 1985, the organized crime pattern inthe country began to take a different shape.
This was a time when our country made aU-turn in her economic policy. The effects
of globalization never spared us. The windof change in the former East European
countries also had a role in determining
our economic policy.
As a result of such changes which wereby then taking shape in the world, we
decided to abandon our former closed-door
economic policy and instead opted for tradeliberalization. This change of policy left
our doors open for both genuine investors
and potential organized criminal
syndicates of the world to infiltrate theiroperatives into our country.
Immediately there-after, we began tonote an astonishing upsurge of certain
offences as well as emergence of new formsof crimes, such as the illegal Arms dealing,major frauds, poaching, corruption, violent
crimes, smuggling, economic crime/fiscal
offences, drug trafficking, and mostrecently terrorism. The opening up of oureconomy and the development of scienceand technology have together fuelled up
organized crime incidents in our country.
This was the first real orientation which
we had with organized crimes.

117TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
III. THE OFFENCE OF MONEY
LAUNDERING

IV. BRIEF ANALYSIS OF THE
CURRENT SITUATIONThis is part of organized crime offences.
It is very difficult and completely out ofperspective to discuss about money
laundering without discussing organizedcrimes. Money laundering should be
discussed in the context of organizedcrimes. This is the reason why we havedirected our attention to organized crimesin the foregoing paragraphs. Just as it waswith organized crimes, the offence of money
laundering has not yet manifested itself
fully in our system.

As mentioned in the introductory part,the offence of Money laundering has not
yet registered itself very firmly in oursystem. Perhaps we lack the necessary
skills to detect and investigate this offenceor it is non existent. However, we would
like to believe the former to be true becausewith the trade liberalization at its peak,there has been a lot of people from all over
the world coming into the country under
the guise of investors. Due to lack ofadequate skills it has always been difficult
on us to identify non-genuine investors
from the genuine ones.

There is however a very strong
possibility that the offence has deeply
entrenched itself in our system but owing
to the intricacies involved in its detection
and investigation, we have yet to flush itout. To many of us for example, we used toassociate the offence of money launderingwith illicit drug trafficking only. It tooktime before it dawned on us that money
laundering can be facilitated by dirty
incomes derived from all the organizedcrime offences.
With those brief foregoing introductory
remarks, let us now examine the current
situation and countermeasures that havebeen adopted in Tanzania against Money
Laundering. In this regard, our discussion
will cover a brief analysis of the current
situation of money laundering and the legal
framework for combating such crime; weshall also explore and identify current
problems in the detection, investigation,prosecution and punishment of the said
offenders and solutions for them. We shallfinally discuss, albeit briefly, the possibilityof introducing new investigation methods
and legislation in the fight against money
laundering.

Being a poor country which welcomes
investments from all over the world,
sometimes it is felt that if you start equiries
against the so called investors you risk thepossibility of chasing them away with theirmuch wanted investments. As a result weare always in dilemma not knowing theright course of action to take.
It is partly because of these reasons that
our record of detection is not very
impressive at all. These are however
instances when Money Laundering
activities have been inferred. One such
incident involved the MERIDIAN BIAO
bank which had offices in Tanzania,
Zambia and in other countries in theworld4. Apart from that case we do not haveany statistics to amplify this situation.
This does not however mean that Money
Laundering is not present in our country.
Most of the emphasis had therefore beenplaced in fighting other organized crimes.
4

This bank was opened by suspected criminals from
Malaysia and after operating for some time, itwound up its activities abruptly leaving several
account holders in abeyance. It is believed thatthe same happened in Zambia.

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RESOURCE MATERIAL SERIES No. 58
The legal framework that is in place caters
generally for organized crimes without
specifically addressing the offence of Money
Laundering. Recently, however, emphasis
has been placed on Money Laundering as
well. Let us now examine the legal
framework in place against the offence ofMoney Laundering in Tanzania.
V. THE LEGAL FRAMEWORK FOR
FIGHTING MONEY LAUNDERINGThe offence of money laundering has
always been discussed in the context oforganized crime. For a long time in ourcountry, there were no specific legal
frameworks to deal with money laundering
as a separate offence. The tendency has
always been to resort to various legal
provisions in place against organizedcrimes. We therefore intended to highlightsome registration put in place againstorganized crime which also somehow caters
for the offence of money laundering.
A. Legislation Against Organized
Crime
When traces of organized crime began
to be felt in Tanzania, organized crime had
not yet assumed the international
character it has now. As such, thelegislation enacted was mainly aimed atcombating what was considered a group of
local economic saboteurs and other localorganized criminal gangs5.
Prior to the enactment of this legislation,
there were of course, two United Nations
conventions against Narcotic drugs and theother against psychotropic substances.
These conventions adopted a number ofresolutions aimed at controlling narcotic
drugs and psychotropic substances whichby then were the leading organized crimes.
It was envisaged, correctly, that other5

The economic and organized crime control Act,
Number 13 of 1984.

430

forms of organized crimes derive their
origins from the illicit trade and abuse of
dangerous drugs.
Apart from the two United Nations
conventions, two legislations were also
enacted in 1965 and 1969 respectively6.
Though they were not expressly dealing
with organized crime directly, they wereintended to facilitate the extradition of
criminals and to follow in hot pursuit,though special arrangements with othercountries, all those people who commit
crimes in one country and run to anothercountry. It was envisaged, again correctly,that the existence of such legislation would
deter potential offenders from organizing
their criminal schemes in one country andrun to seek refuge and reap fruits of theircriminal acts in another country whenthings turn sour in their countries.
As started earlier, the best weapon that
the Tanzanian Government thought would
help wipe out or control incidents oforganized crime, is the Economic andOrganized Crime Control Act7. This Act
was enacted in 1984 when the first real
adverse effects of organized crime began
to bite. The promulgation of this Act was
aimed at making better provisions for thecontrol and eradication of certain crimes
and culpable non-criminal misconduct
through the prescription of modified
investigation and trial procedures, and new
remedies and for connected matters. A
number of new offences were created andenshrined in the first schedule of that Act.
One such offence is that of “Leading
Organized Crime”8. In the following part
we wish to discuss briefly some of theprovisions of the Act which criminalizes
money laundering.
6

The extradition Act of 1965 and the fugitive
offenders (pursuit) Act of 1969.
7 No. 13 of 1984.
8 Ibid; paragraph 4(1) of the first schedule to the Act.

117TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
B. The Economic And Organized
Crime Control Act, Number 13 of
1984Part III of the Act covers the procedureand regulation governing the investigationand prosecution of economic cases.
Organized crimes (including money
laundering) falls within the ambits of thispart. Under the provision of the Act, theinvestigation of all economic offences
reported to the Police shall be conductedby Police Officers, with the assistance ofsuch public officials as may be designatedby the Director of Public Prosecutions after
consultation with the Director of Criminal
Investigation and by order published in
Gazette9.
The act also empowers a Police Officer
to conduct search and seize property
involved in an economic forfeiture orconfiscation of a property proved to havebeen involved in the commission or
facilitation of an economic offence 10 .
Transfer of advantage or property involvedin or arising out of the commission by any
person of an economic offence is prohibitedby the Act11.
However, when one reads the above
provisions of law between the lines, he will
notice that they do not provide anything
specific in relation to the money laundering
offence but rather they provide fororganized crimes in general. Absence ofspecific legal provisions that ciminalizes
money laundering creates loop-holes in ourlegal systems which assists organizedcriminal gangs to thrive and flourish.
This helpless situation led many
countries to introduce legislative initiatives
regarding money laundering andconfiscation of the proceeds of crime. In
act it was the United Nations convention
which appealed to and mandated member
countries to adopt a model with acceptable
standards. In the following part, we wish
to discuss briefly about the directive of theUnited nations and the impact it had on
our country in formulating the required
legislation against money laundering.
C. The United Nations Convention
As we are all aware, the United Nations
in many of its deliberations, convened a
conference in Vienna, Austria. 12 The
conference came up with a very famousconvention against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances. The
conference also came up with a model draft
to be adopted by all member countries inorder to intensify the war againstorganized crimes and especially illicit
traffic in narcotic drugs which in most cases
brews up other forms of organized crimes.
The objectives of such model draft were/
are to enable different countries of theworld to unify their strengths in order tofight and eradicate organized crime
syndicates more collectively.
Tanzania, being a member of the United
Nations, adopted into her legal system the
proposed model and enacted two legislation
almost simultaneously, the Mutual
Assistance in Criminal Matters Act13 andthe Proceeds of Crime Act 14 . Theselegislation are of unique importance as theycall for Agreements to be made between
states with regard to mutual assistance ina variety of activities related to theinvestigation of crime such as; collectionof evidence, location of witnesses orsuspects, service for search and seizure of

12 Ibid; section 58(1).
9Ibid; section 21(1).
10 Ibid; section 22.
11 Ibid; section 23.

13 In 1988.
14 Number 24 of 1991 and number 25 of 1991,

respectively.

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RESOURCE MATERIAL SERIES No. 58
stolen property etc, just to mention a andseizure of stolen property etc, just to
mention a few15. Let us now examine theappropriate legal provisions in these two
Acts which criminalizes money laundering.
D. The Proceeds of Crimes Act,
Number 25 of 1991.
This Act was designed to introduce a newlaw fashioned to provide the most effective
weaponry so far against major crimes. Its
purpose, according to the bill sent toparliament for debate16, is to strike at theheart of major organized crimes bydepriving persons involved of the profits
and instrumentalities of their crimes. By
so doing, it was envisaged that the Act will
suppress criminal activity by attacking the
primary motive, profit, and prevent
reinvestment of that profit in further
criminal activities. Generally speaking,
the Act contains provisions of a coordinatedinternational effort designed to target boththe pushers and others involved in criminal
activities as well as those who reap themost reward from such crimes.
This Act also provides a mechanism forthe tracing, freezing and confiscation of theproceeds of crime such as drug trafficking17.
It also confers on Police new powers toassist in following the money trail 18.
Furthermore, the Act creates a few new
offences such as money laundering andorganized fraud19.
The Proceeds of Crime Act20 when taken
together with the Mutual Assistance in

15 Section 4 of the mutual assistance in criminal

matters Act, 1991.
16 Bill for proposed enactment of a law against

proceeds of crime.
17 Section 9 of the Proceeds of Crime Act, number 25

of 1991.

Criminal Matters Act, enables freezing andconfiscation orders made by courts in ourcountry to be enforced abroad. Likewise,
they enable orders made in foreigncountries in relation to foreign offences tobe enforced against assets located in
Tanzania.
VI. CURRENT PROBLEMS IN THE
DETENTION, INVESTIGATION,PROSECUTION AND PUNISHMENT
OF MONEY LAUNDERING
OFFENDERS
A. Detection
This is the key to the dismantling oforganized criminal syndicates. Without
detection, it is impossible to apprehend andprosecute perpetrators of this crime.
Detection however, requires special skills
and knowledge of how this offence iscommitted. The investigators have a dutyof sharpening their detection skills by updating themselves on methods oflaundering cash that have been used toconvert dirty cash into clean assets. Once
investigators are able to distinguishvarious techniques employed by theoffenders of this crime, detection becomesan easy task.
With increasing globalization andliberalization, countries, especiallydeveloping ones, are vulnerable to the risks
of money laundering. Therefore,
appropriate detection strategies ought tobe put in place in order to discourage
offenders of money laundering offence fromentrenching their roots into our countries.
As stated earlier, our records oncriminalizing money laundering in
Tanzania is not very impressive. The
logical assumption is that our detection
strategies are not well advanced. We
highly appreciate invitations to forums like

18 Ibid; section 31(3).
19 Section 71 of the proceeds of crime Act, Part VII.

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20 Number 25 of 1991.

117TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
this because we are sure to learn something
useful which can improve detection ofmoney laundering in our country.

would entail failure on our parts because
organized criminals would always be
several steps ahead of us.

With the development in technology, forexample electronic cashing throughinternet, organized criminal gangs can now
move large sums of money easier from onepart of the world to another. This has
somehow substantially reduced theimportance of national borders thus
allowing international criminals to finance,
profit from and expand their illicit
operation. This therefore requires highest
standards of detection. This can only beobtained through training and cooperationfrom other developed countries orinternational agencies.

Prosecution of this offence also requires
training and understanding of certain
intricacies surrounding this offence.
Designated prosecutors should be picked
and trained in the various aspects of money
laundering.

B. Investigation and Prosecution
Money laundering investigations arevery complex and require specialized
expertise, and are normally lengthy
investigations. Many traditional Police
investigative tactics did not include
emphasis on the money, now however,these investigations are becoming anessential part of any significant organizedcrime investigation.
The problems outlined about detection
can equally be highlighted in the aspect ofinvestigation. We lack the necessary skills
and knowledge of how to successfully
investigate a money laundering case. The
complexity nature and the lengthiness ofsuch investigations calls for well trained
personnel to carry out such tasks. These
persons should be well versed about theexistence of both bilateral and multilateral
instruments at their disposal and how best
to utilize them to their advantage.
Equally important here, is to impart thenecessary knowledge to the investigators
about the current techniques involving
modern technology in the commission ofthis global offence. Lack of such knowledge

C. Punishment to Offenders
Detection and prosecution of offenders
alone is meaningless unless appropriate
punishment is meted out to proved
offenders. Punishment to offenders, as we
all know, serves a number of purposes.
First and foremost, it consoles the victimsof the offence, it also teaches a lesson tothe offender and more importantly, it acts
as a deterrent to potential criminals.
There is a prevailing belief worldwide
that the more severe a punishment is, thebetter. Members of the public would always
be relieved if severe punishment is inflicted
upon proved offenders. This is the reason
why many penal statutes impose
corresponding punishment to various
offences.
In Tanzania, the Penal Code 21 is thestatute which creates most criminal
offences and imposes penalties to offendersof various crimes. However, in so far as
economic cases are concerned, organizedcrimes being among them, any person
convicted of an economic offence shall be
liable to imprisonment for a term notexceeding fifteen years, or to both thatimprisonment and any other penal
measure provided for in the respective
Act22.
In cases involving money laundering,
imprisonment of whatever term would not
21 Chapter 16 of the revised laws.

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RESOURCE MATERIAL SERIES No. 58
by itself teach offenders a lesson nor will it
serve as a deterrence to others.
Deprivation of the ill gotten property or any
other proceeds of the crime would equally
be very appropriate and would certainly
inflict greater pain to the offender. Since
most of proceeds of money laundering crime
are located far away from where the offence
took place, an appropriate machineryshould be put in place to trace and seize
such properties in those countries. Thismachinery has been established in
Tanzania by the enactment of two Acts23.
However, so far there is no case example
to amplify the application of the provisions
enshrined in those Acts.
VII. POSSIBILITY OF
INTRODUCING NEW
INVESTIGATION METHODS(INCLUDING NEW LEGISLATION)
IN THE FIGHT AGAINST MONEY
LAUNDERING
In order to win the war against offenders
or perpetrators of this offence, deliberateand calculated steps need to be taken inorder to sharpen the investigative skills of
officers concerned and also the come up
with a legislation that will iron out all theexisting legal hurdles.
As narrated in the foregoing paragraphs,
criminals of this offence employ very
sophisticated tactics and resort to modern
technology in facilitating the conversion of
dirty cash into clean assets. They also use
skilled personnel and other professionals
such as Accountants, Lawyers etc. to fend
for them. All these poses a great challenge
to the law enforcers, especially those indeveloping countries like Tanzania, wholack adequate skills, knowledge andmodern facilities.

This situation is further compoundedfrom bad to worse by the fact that thisoffence is an internationalized one in thesense that offenders form themselves instrong organized criminal syndicates. Thisset up requires harmonization of different
legal systems and global cooperation. No
country the world over can manage to fight
this crime single handedly and win. It is
for this obvious reason that we in Tanzania
have supported various Regional andInternational efforts between Law
Enforcement Agencies and Other
Institutions, geared at fighting organizedcrime and particularly money laundering,collectively. We believe that introductionof whatever investigation methods or new
legislation would not bring the desired
effect if there is no corresponding collective
Regional or International resolve to tackle
this problem jointly.
The following is therefore an example of
the Regional and International cooperationthat exists between us and other countries/
institutions against organized crimes:(a) There is the Annual Chiefs of Police
Conference for the three East Africancountries where security cooperationand exchange of intelligence
information feature most. Organizedcrimes are discussed in this forum
and appropriate strategies are set24.
This is also supplemented by the
biannual operational drugs meetingfor the Heads of Criminal
Investigation Department and AntiNarcotic units of the three East
African countries 25 . Within East
African, there is also the East African
Inter-State Defence and Security
Sub-Committee which meetsannually to assess the security

22 Economic and organized crime control Act, number

24 The countries involved are Kenya, Uganda and13 of 1984, section 59(2).
23 Number 24 of 1991 and number 25 of 1991.

25 Ibid; recently Rwanda joined as a member.

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Tanzania.

117TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
situation within the Region. In allthese forums organized crime is themain agenda item. As a result of suchcooperation in the Region, the Headsof states for the east African states
have signed the protocol for
combating illicit drug trafficking andmoney laundering in East Africa26.
(b) In the SADC region, in which
Tanzania is one of the member
countries, the Chiefs of Police for
SADC have a forum called
SARPCCO27. They meet biannually to
lay strategies to combat organizedcrime and other cross-border crimesin the region. A similar protocol asthat in the East African Region was
signed in 1996 for the SADC
countries.
(c) In August 1999 a meeting wasconvened in Arusha, Tanzania, tolaunch the Eastern and Southern
Africa Anti-money laundering group.
In that meeting the ministers
responsible for finance and Legal
Affairs from nine countries of our
Region, agreed on a number of points
for action in the region. Among thosepoints include:(i) Working towards attainment of
the international standards inthe fight against the launderingof proceeds of those crimes
referred to in relevant
multilateral agreements andinitiatives which deal with
combating serious crime, and to
implement
the40
Recommendations of the
Financial Action Task Force onmoney laundering.

(ii) To improve cooperation between
members, and with other states,in the fight against money
laundering.
(iii) To co-operate with all relevantinternational organizations
concerned with combating
money laundering.
(iv) To study emerging regional
trends in money laundering, andto share member states’
experiences in order to address
those trends.
(v) To institute an evaluation
process, including mutual
evaluation, to assess themeasures in place in eachmember state, and theireffectiveness, and to identify thegaps between existing measuresand endorsed standards.
(vi) To a d d r e s s d e f i c i e n c i e s
identified through the process.
(vii) To develop institutional andhuman resource capacities tocheck money laundering.
(d) There is also the INTERPOL. Thisbody has very much helped tocoordinate a number of activities
between Law Enforcement Agency ofits 178 members. INTERPOL has
provided us with the X-400
communication equipment whichtransmits swiftly any information ina safe and secure manner to be usedby the member countries. Recently,
the Interpol Sub-regional Bureau
Office was opened in Nairobi,
Kenya28. The Bureau helps to passover any information on clandestine
money laundering activities.
It is therefore our considered view

26 This was done Arusha, Tanzania, on 30th November,

2000.
27 The Southern Africa Regional Police Chiefs

Committee.

28 Senior Police Officer from Kenya, Tanzania and

Rwanda have already been seconded there.

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RESOURCE MATERIAL SERIES No. 58
that any new investigation methods
or new legislation envisaged to be
introduced, should take into
consideration efforts being currently
made both within the Region andInternationally so as to supplement
such efforts not to contradict them.
VIII. CONCLUSION
Now, money laundering has firmly
established itself as a major worldwide law
enforcement issue. Apart from the effects
of globalization, trade liberalization anddevelopment of science and technology, ourcountry is also faced with a large influx ofrefugees and other displaced people fleeing
the fighting and civil strifes in the Great
Lakes Region29.
Experience over years has shown thatthese people (refugees) engage insmuggling of firearms, illicit dangerous
drugs and other organized offences. Someof them have also established hidden
properties arising from the proceeds of suchcrime and others are being used byorganized criminal gangs to invest their illgotten money in our territory.
On the other hand, being a poor country
in dire need for investments, it is very
difficult to draw a line between genuine andfake investors. As a matter of practice, we
do not quite often make a follow up or trace
the source of money by such investors. Thisin turn diminishes our capabilities indealing with this offence.
All in all, the best solution to the money
laundering problem should come fromconcerted Regional and International
efforts. This seminar for example, is oneof the necessary platforms upon which

29 The wars in the Democratic Republic of Congo, civil

strifes in Rwanda and Burundi serve as an example.

436

concrete and appropriate strategies canembark from. We thus urge otherdeveloped countries and International
institutions to emulate the traditional
example set by the organizers of thisseminar and attend to the short-falls in thedeveloping countries in dealing with theoffence of money laundering.