Namibia has been warned against the inherent risks associated with developments in the oil and gas sector and the emergence of the green hydrogen sector and to remain vigilant.
The risks associated with the emerging opportunities, among others, are illicit financial flows, money laundering, corruption, and terrorism financing.
The Governor of the Bank of Namibia, Johannes !Gawaxab, sounded the warning at the launch of the Financial Intelligence Centre Annual Report.
!Gawaxab, who is also the Chairperson of the Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation Councils, said effective anti-money laundering and combating the financing of terrorism policies are key to the stability and integrity of the financial system, which was grey-listed by the Financial Action Task Force early this year.
The central bank governor further raised red flags against other emerging financial crimes such as trade mispricing, intricate kickback schemes, and offshore transactions.
''In light of this, it is essential for the FIC, accountable institutions, and the entire financial sector to proactively establish the requisite capabilities for mitigating the introduction of new forms of financial crimes. By doing so, we can not only protect our economy and resources but also attract more responsible and sustainable investments."
He further said that the entry of new entities, including multinationals, investors, and emerging technologies, brings complex financial structures that may be vulnerable to exploitation for illicit activities.
The governor therefore called on statutory bodies and other related agencies to stay ahead of the curve and invest in technology and highly skilled teams and individuals who can navigate hostile threats.
!Gawaxab said artificial intelligence has emerged as both a friend and a foe in the fight against financial crimes.
"While we cannot take our eyes off traditional crime types that generate illicit finance, such as drug, arms, human, and illegal wildlife trafficking, environmental crimes, fraud, theft, bribery, and cybercrime and ML/TF/PF. AI and the Internet of Things have created a plethora of new and different ways for criminals to target new victims, new pathways into organisations, and strategies to exploit the formal financial system, which must be addressed."
The fight against illicit financial crimes continues to be a headache for combating institutions; therefore, !Gawaxab said that the world will continue to look to the Financial Action Task Force to identify risks, update standards, and issue guidance to uplift the fight against financial crime.