MBABANE – The illegal online gambling activities have the potential of getting Eswatini greylisted by the Financial Action Task Force (FATF).
The FATF is an entity that leads global action to tackle money laundering, terrorism and proliferation financing.
The Ministry of Finance made this revelation when responding to an urgent application filed in the High Court by XWIN (Proprietary) Limited, which is seeking the reopening of its offices at Madlenya House and the return of equipment seized during an investigation by the police.
The investigation resulted in the arrest of Managing Director (MD) Nhlanhla Tsabedze, who is out on E5 000 bail and other foreign nationals. The company is alleged to be involved in unlawful online gambling, in a scheme commonly referred to as ‘pig butchering’.
The investigation is centred around illegal online gambling, which has seen about 150 foreign nationals from East Asia, Southeast Asia and South America being charged and they await their day in court. A majority of the accused persons are from Mainland China.
The Eswatini Government is vigorously opposing XWIN’s application.
According to government, getting grey-listed would restrict access to global financial markets and increase the cost of doing business.
This in turn would result in foreign investors avoiding Eswatini as a high-risk, reducing capital inflows and slowing economic growth.
This submission has been made by the Acting Principal Secretary (PS) in the Ministry of Finance, Nkululeko Dlamini, in the answering affidavit.
Dlamini said transnational crimes, especially related to money laundering and terrorist financing are among the most dangerous forms of crime. He said such criminal activity enables organised criminal networks and terrorist extremist groups to sustain operations, destabilise economies and undermine national security.
“Hence, it is important for a country to act decisively and swiftly when faced with transnational financial crimes,” he stated.
The acting PS informed the court that the impact of transnational crimes is far-reaching as it can drain economies, weaken governance, fuel terrorism and erode social trust.
“Its impact is not confined to one country as they transcend to a number of jurisdictions, making them a global threat that requires collective action,” he argued.
Dlamini submitted that Eswatini faces a number of risks if transnational financial crimes are not dealt with decisively.
These risks include economic instability in that criminal networks exploit weakness in the financial systems to engage in criminal activities, launder the proceeds of the crime and finance terrorism. This, he said, undermines legitimate trade and investment in a country.
Another risk outlined by the acting PS is that criminal networks could finance terrorist activities against Eswatini or other countries, and if not dealt with, organised crime can weaken governance and destabilise the region.
The acting PS recounted how in 2022 Eswatini was assessed and found to have weaknesses in its systems designed to fight against money laundering, financing of terrorism and other financial crimes.
He said Eswatini, therefore, has faced increased scrutiny which, if unaddressed, could result in Eswatini’s grey listing as a country with strategic deficiencies (high-risk).
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Modus operandi has potential to finance terrorism – REPS
MBABANE – The modus operandi of the foreign national found to be engaging in illegal online gambling has a potential to finance terrorism activities and generate proceeds which are eventually laundered as it is unregulated, thereby placing the country under a security risk.
Assistant Superintendent Mpendulo Dlamini of the Royal Eswatini Police Service (REPS) made this submission in his responding papers in the matter where the Eswatini Government is opposing XWin (Proprietary) Limited’s urgent court application.
Dlamini unpacked the aspect that led to the seizure of the instrumentalities of the company.
He said digital devices are a moving crime scene and their premature release would compromise the integrity of an ongoing investigation into illegal online gambling and immigration violations.
The respondent said the seizure of these gadgets was conducted on the reasonable belief that the computer systems and data storage mediums contained material evidence to prove the alleged offences of illegal online gambling and contravention of the Computer Crime and Cybercrime Act No. 6 of 2022.
He said Section 47 of the Criminal Procedure and Evidence Act 67/1938 allows the search and seizure of goods without a warrant, so long as the police reasonably believe that it will be spirited away. “Electronic evidence is distinct from physical evidence because it is intangible, can easily be manipulated and highly susceptible to alteration or deletion.
“As these gadgets constitute a moving crime scene, the data can be remotely wiped or encrypted if the devices are returned before a full forensic extraction is completed,” the respondent submitted.
He said it is suspected that the devices were used as instruments to commit illegal online gambling and, therefore, are to be used as exhibits.
He mentioned that premature release of these devices would compromise the integrity, reliability and authenticity of the electronic evidence that the Crown intends to lead for eventual admissibility in court.
“Under the circumstances, releasing the gadgets back to applicant’s directors may enable them to continue with their illegal activities and therefore, it is not in the interests of justice. Most importantly, instruments used in the commission of an offence are subject to asset forfeiture proceedings,” he said.
The respondent argued that digital forensic examination requires a multi-disciplinary approach involving digital forensic specialists to conduct live data analysis.
He said the police will have to utilise forensic tools as provided for under Section 40 of the Computer Crime and Cybercrime Act No. 6 of 2022 to extract hidden or encrypted data related to suspicions of the illegal gambling operations. The process of obtaining an intelligible output that is admissible in court is technical and time consuming, returning the digital devices would result in the permanent loss of this best evidence.
*Full article available on Pressreader*
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