Hertta-Maria Amutenja
The Bank of Namibia (BoN) and Namibia Revenue Agency (NamRA), have unveiled the Trade Verification System (TVS) to enhance trade efficiency and combat illicit activities.
The central bank and the agency said the digital initiative promises to revolutionise the country’s trade processes, offering improvements in efficiency, transparency, and security in trade operations. The system will come into effect next month.
BoN Director of Strategic Communications and International Relations Kazembire Zemburuka and Chief NamRa Strategic Communications and Support Engagements Yarukeekuro Ndorokaze, in a joint media statement, explained that the international trade system, in particular, has been exploited by various illicit activities, such as fraud, capital flight, and tax evasion, especially Trade-Based Money Laundering.
“The primary vulnerability in national assurance frameworks arises from the absence of mechanisms that compare or reconcile trade declarations made via customs (amongst others) with financial transactions related to such trade. In the absence of such a reconciling framework, the Financial Intelligence Centre observed that Namibia suffered significant foreign currency losses, evidenced by irregular outward remittances for non-existent imports,” they explained.
They emphasised that the TVS aims to create efficiency, ensure compliance, combat illicit capital flows, streamline trade operations, and reduce operational costs.
They highlighted that for years, the trade industry in Namibia has heavily relied on paperwork and manual processes, making it vulnerable to errors, fraud and non-compliance issues.
To address these issues, a Public-Private Partnership, led by the Financial Intelligence Centre was established to investigate the losses.
The findings revealed losses amounting to N$3 to N$4 billion over a three-year period. In response, the investigation recommended the implementation of a national framework to reconcile trade declarations with relevant financial transactions.
“This system automates trade, reduces the reliance on manual processes, advances and ensures the authenticity of documents, and provides a single source of truth on which both customs and financial services can rely to enable capital exportation as payment for foreign goods and services while ensuring regulatory compliance,” reads the statement.
Furthermore, they noted that the TVS streamlines commercial banks’ operations by providing new data elements for automated transaction management. Unique identification numbers will enable banks to enhance trader identification and verify compliance.
