Tanzania - Threat Assessment - 2020 Page 1 of 30 Slavery: US Trafficking in Persons: Tier 2 � Country (Watchlist) According to the 2018 Global Slavery Index, Tanzania has 336,000 Section 1 - Executive Summary modern day slaves )incidence of 6.2/1000 people) & the country is rated CCC (limited Grey Lists : Tanzania is listed by the US as a response to modern slavery). Country of Primary Concern in respect of ML & FC, but is not listed by FATF, or the EU on their Sanctions & Terrorism: No Sanctions against “Grey” lists. the Country. For Proliferation Tier 2 PPI Index (Proliferation) Tanzania is given a “Moderate” NRA - Published in 2016. Overall ML risk at response score 423/1300. Global Terror Index “Medium High”. The Report found rated “Low”. Terrorism ratings from GTI give domestically, “money laundering comes from Tanzania a “Low” impact (Score 2.834/10). corruption, tax evasion, drugs trafficking, poaching and smuggling of goods,” and Indices: Freedom House 2019 Freedom in the foreign threat for money laundering comes World score of 45/100, “partly free.” and rated from “unlawful dealing in Government trophy “increasing improvement" 58.5/100 in Mo (wildlife parts and products), drugs trafficking Ibrahim Index of African Governance. Basel and smuggling of goods.” AML Index 2019 - ranked 17th worst of 125 countries, with a score of 6.63/10. Corruption: TI CPI - 2018 - ranked 96/180 with a score of 37/100 in 2019. The World Bank in Resilience & Response: Tanzania is currently its Governance Indicator - Corruption Control under review by the ESAAMLG and is due to rated Tanzania 39/100. The 2018 TRACE report in 2020. Removed from FATF Watchlist Bribery Risk Matrix - “High” risk rating of 60, in 2014. OC Index scores Tanzania Low for ranked 139/200. Resilience at 4.13/10 ranked 22/54 for and 4/9 for E Africa.. Organised Crime Index: High Criminality ranked 17/54 of African countries and 6/9 of Overall Ratings: Tanzania is rated overall East African countries. The main markets, “Very High” Risk, 8th highest risk out of 9 according to the OCI, with highest criminality Eastern African Countries and =35th highest scores (rated 1-10 with 10 the highest) were risk out of 40 in FCN’s SSA Threat Assessment illegal drugs, with Cannabis (8/10) and Heroin with a score of 34/100, but with an (7.5/10) the most significant, followed by “Improving” tend. Environmental Crimes, Illegal Wildlife and Illegal Logging (7/10) and Illegal Mining (6/10), FCN Rating: “High” Risk 34/100 at the same level as Human Trafficking (6/10) Trend “Improving” and Human Smuggling (6).

Tanzania - Threat Assessment - 2020 Page 2 of 30 Section 2 - Country Dashboard

Tanzania ↗ Improving Capital & Population: Dar Es Salam /55 million approx Political Leader: John Magufuli, President since 2015 GDP: US$58 billion -2018 (0.54% of Global GDP) Economic Sector Breakdown: Agri (23%), Industry (29%), Services (48%). Exports: US$4.971 billion (2017), gold, coffee, cashew nuts, manufactures, cotton to India 21.8%, South Africa 17.9%, Kenya 8.8%, Switzerland 6.7%, Belgium 5.9%, DRC 5.8%, China 4.8%. Imports: US$7.869 billion (2017), consumer goods, machinery and transportation equipment, industrial raw materials, crude oil from India 16.5%, China 15.8%, UAE 9.2%, Saudi Arabia 7.9%, South Africa 5.1%, Japan 4.9%, Switzerland 4.4%.

Score: 34/100 “High” FCN Risk Rating (Average Country Score is 32 - SSA) Proceeds / Laundering Rank: 28/40 SSA - 5/10 Region EA range 8.5% - 11.5% GDP / 50 - 60% of Proceeds

Organised Crime Costs of Corruption range up to approx 26 - 28% of Proceeds range up to approx 10 - 15% of Proceeds (Criminal Networks 6/10, State Embedded 5.5/10, Foreign Actos 5.5/10, Mafia Style 3/10)

Total Criminal Proceeds in Sub Tanzania Higher (Inherent) Risk Factors Saharan Africa in US$ Billions - FCN 2020 (not including fraud and Customer Sector Country corruption and tax evasion) Risks Risks Risks

Customers with elevated Banks (in particular Retail Major Export / Import Mining exposures to Criminal and Correspondent Banks) Partner Countries (Trade Fishing Real Estate, Motor Vehicle Mispricing and IFF’s - 10 2.5 activities such as: drugs Dealers & Hawala all particularly mining and Wildlife Goods Piracy and wildlife trafficking, “High” - NRA extraction sectors) 2 9 illegal logging & mining, smuggling of goods & Dealers in Precious Metals Neighbouring Countries & Stones, Bureau de in particular Zambia, Logging along with corruption (e.g Change, Casino’s, Lawyers, Kenya, Uganda 12.5 PEP’s) which also helps Notaries, Micro Credit Modern Slavery facilitate these crimes & Companies - rated Kenya, Somalia (Terrorism 8.3 tax evasion “Medium High” - NRA Al Shabaab) Drugs Informal Sectors China (Wildlife, Mining, 3 Theft to Higher Risk Sectors Logging) 15 and/or Geography Risks Vietnam (Wildlife)

FCN SSA Country Risk Rating - Threats by FCN - Tanzania

GTI GSI INCSR TI CPI US TIP Overall WEF OC US Terror GFI IFF’s IUUF Index OC Index US END Wildlife FCN SSA Country Risk Rating - Response - Tanzania

GSI PPI Gov Free Basel OCI NRA FATF 40 FATF 11 Overall Seizures US$ FATF/EU Lists

Tanzania - Threat Assessment - 2020 Page 3 of 30 Section 3 - Country Information

People & Geography: Tanzania is home to 55 from India 16.5%, China 15.8%, UAE 9.2%, million people in an East African country Saudi Arabia 7.9%, South Africa 5.1%, Japan known for its vast wilderness areas. They 4.9% & Switzerland 4.4%1. include the world famous Serengeti National Park and the Ngorrogorro Crater, popular for Environment: According to the Environmental safari populated by the “big five” game Performance Index2 2018, Tanzania scores (elephant, lion, leopard, buffalo, rhino), and 50.83/100 & is ranked 119/180 countries. Kilimanjaro National Park, home to Africa’s Indoor air pollution caused by the burning of highest mountain. fuel wood or charcoal is a large environmental health issue as is deforestation. Recent History & Leadership: Shortly after achieving independence from the UK in the Tourism:Travel and early 1960s, and merged generated US$6.6 billion in 2019 employing to form Tanzania (the name "Tanzania" derives 1.55 million Tanzanians (11%) and from the names of the two states, Tanganyika representing 10.7% of Tanzanian GDP. Main and Zanzibar) in 1964. In 1995, the country attractions include wildlife tourism, with held its first democratic elections since the numerous national parks, including the 1970s. Zanzibar maintains semi-autonomy and Serengeti. Domestic spending on tourism and participates in national elections. President travel stood at 16% while international John Magufuli has been in office since 2015, spending was 84%. Main tourists come in from following his election win. Kenya (15%), US (7%), UK (5%), Germany (5%) & Burundi (4%), with outbound tourists going Economy & Trade: Tanzania has a GDP of to; Zambia (35%), Uganda (15%), Kenya (11%), US$58 billion (2018), representing 3.6% of SSA Zimbabwe (6%) & South Africa (6%).3 GDP. Tanzania’s economy relies heavily on its mining and agricultural sectors. Agriculture Finance: Tanzania’s financial profile4 includes represents approx 23%, industry 29% & the following (people aged over 15); 21% have services 48% (2017). Exports of US$4.971 Bank account’s, 0.5% have a credit card, 39% billion (2017), gold, coffee, cashew nuts, have a mobile money account, 12% make manufactures, cotton to India 21.8%, South online payments, Internet penetration is at Africa 17.9%, Kenya 8.8%, Switzerland 6.7%, 25% via 15 million internet users 44 million Belgium 5.9%, DRC 5.8% & China 4.8%. mobile connections or 75%. Foreign Imports of US$7.869 billion (2017), consumer remittances received of 0.8% of GDP & costs goods, machinery and transportation of outbound remittances from Tanzania are equipment, industrial raw materials, crude oil 15.9% of US$2005.

Tanzania - Threat Assessment - 2020 Page 4 of 30 Section 4 - Country Ratings & Heat Map

Source Tanzania � Source Tanzania � Source Tanzania �

World Economic Forum 63.9 / 100 Transparency International (TI) 37 / 100 Proliferation Index - PPI Tier 2 Organised Crime Index* Corruption Perceptions Index* a score below 50 is more corrupt Threat Middle Threat Level

OC Index “High” Criminality TI & Afrobarometer 25% Proliferation Index - PPI 423/ 1300 Criminality* 5.63 Citizens Views and Experiences of Corruption Controls* Controls score Report

OC Index 5/10 TRACE 72/100 Global Terrorism Index “Low” Impact Criminal Actors Bribery Risk Matrix GTI - Impact* 2.834

OC Index 5.5/10 Global Slavery Index 6.2/1,000 US Dept of State No State Embedded Actors GSI Incidence* Incidence of human trafficking Country Reports on Terrorism*

OC Index 6/10 Global Slavery Index 336,000 Global Cybersecurity Index 0.317/1 Criminal Networks No of estimated Modern Day Slaves numbers of modern slaves 2018 (88/175)

OC Index 5.5/10 Global Slavery Index “CCC” Rating Mo Ibrahim Governance Index 58.5/100 Foreign Actors Country Response Rating* (49.9 - All Africa)* “Increasing Improvement”

OC Index 3/10 US Dept of Labor 3.6 million children work Freedom House 45/100 Mafia Style Gangs Child Labour Freedom Index* “partly free” 29.3%

OC Index Cannabis 8/10, Heroin 7.5/10 US Dept of State Tier 2 (Watchlist) Rated Heritage Foundation 60.2/100 Drugs Trafficking Synthetic’s 5/10, Cocaine 4.5/10 Trafficking in Persons* Economic Freedom Index “moderately free” and 94 out of 180.

OC Index 5.5/10 IOM Migration 509,000 I / 323,000 E Basel AML Index* 6.63/10 Arms Trafficking E - Emigration / I - Immigration 17/125 Countries

OC Index 6/10 Illegal Unreported and Unregulated 2,65/6 FIU Egmont Yes People Smuggling (IUU) - IUU Fishing Index Member

OC Index 6/10 EU Listing of Countries for Illegal No Interpol Yes Human Trafficking Fishing Member

OC Index 7/10 US DoS - Wildlife Trafficking Yes Asset Confiscations Estimated below 1% Illegal Timber Focus / Countries of Concern* Focus Country over 1% of Proceeds*

OC Index 7/10 Environment Performance Index 50.83/100 Country National Risk Assessment* 2016 Illegal Wildlife Published 119/180

OC Index 6/10 EUIPO & OECD Counterfeit Goods 0.08% Financial Information Sharing No Illegal Mining Propensity of Exports Partnership

OC Index 4.13 Tax Justice Network 71 US Dept of State Listed Under Vol 2 Resilience* Financial Secrecy Index (98/133) INCSR Vol I & Vol II* Financial Crimes - Primary Concern

OC Index 5.5/10 EU List of None Co operative Not Included European Union List* No AML Jurisdictions for Tax purposes

OC Index 5/10 Not Yet Reviewed FATF Standards Report in 2020 OECD - Global Forum Law Enforcement on Transparency & Exchange Info for Tax Purposes 40 Recommendations*

OC Index 4/10 Global Financial Integrity US$321 million 2017 - 18.21% FATF Standards Report in 2020 International Co- operation Illicit Financial Flows* 11 IO’s on Effectiveness*

OC Index 4.5/10 Embassy’s from N Korea, Syria, Iran Cuba, North Korea, Iran & Syria FATF Standards Report in 2020 Economic Regulatory Environment or Cuba Core 10 Recommendations

Illegal Drug Dependency / Disorders 247,000 / 0.52% Embargoes - Country Sanctions None FATF Standards Report in 2020 Number/Share (Comprehensive - UN, US, EU, UK) Core 4 IO’s on Effectiveness

Numbeo Crime Survey 2020 58.9/100 OFAC Listed Parties 4 Entries FATF No (25/129) with Local Addresses Counter - Measures (Strategic Deficiencies) Strategic Deficiencies List*

FCN Final Ratings - Tanzania �

Financial Crime News 23/100 Financial Crime News 34/100 “High” Risk Threat Rating Financial Crime Rating “Very High” Threat 28/40 SSA - 5/10 EA

Financial Crime News 44/100 Trend Improving Trend Response Rating “Moderate” Response (TI CPI, Mo Ibrahim, FATF, Basel Index & GTI - 3-5 years)

For more details on the scoring model for FCN Ratings contact the Editor FCN directly for access to the Methodology

Tanzania - Threat Assessment - 2020 Page 5 of 30 Section 4 Continued - Tanzania Threats Heat Map

There are many threats that effect Tanzania, which are in most part targeted towards its resources, it’s trading status and its port as well as its natural resources, the people, wildlife, metals, minerals, gems, forests, crops and fish. The effect of endemic corruption increases the threats and reduces the ability to effectively respond. For more details in summary form see the figure below.

Tanzania - Threat Assessment - 2020 Page 6 of 30 Section 5 - Key Threats

In this Section 5, the most important criminal 5.2 US INCSR: Tanzania is listed as one of 80 markets, are assessed and summarised based Countries categorised by the US State Department on available sources. as a Country of Primary Concern in respect of Money Laundering and Financial Crimes. 5.1 National Risk Assessment: Tanzania published 7 its AML/CFT National Risk Assessment (NRA) in According to its 2019 Report , it states that: 2016. The Report6 found that, overall, based on “Tanzania is a significant transit country for illicit assessing threats and vulnerabilities, the overall drugs. Domestic drug use is also increasing. threat level was “Medium” with domestic money Tanzania-based trafficking organisations and courier laundering rated “Medium High” and the money networks operate globally, and play a prominent laundering threat from abroad as “Medium Low” role in the Southwest Asian heroin trade. Tanzania’s The overall money laundering vulnerability was geographical location, prevalence of corruption, “Medium High”. and porous borders present considerable challenges to drug interdiction. Traffickers exploit The overall money laundering risk for Tanzania is Tanzania’s 854 mile coastline and inadequate therefore “Medium High.” The NRA states that, security at Tanzanian seaports. Southwest Asian domestically, “money laundering comes from heroin is transported in multi- hundred kilogram corruption, tax evasion, drugs trafficking, poaching, quantities by small vessels to Zanzibar and the and smuggling of goods.” Tanzanian coastline. Large quantities of heroin transit Tanzania’s land border with Kenya for Money laundering comes from transshipment to Europe and North America. corruption, tax evasion, drugs Smaller amounts (three to five kilograms) are trafficking, poaching, and smuggling of trafficked to Europe, India, and North America from goods Dar es Salaam via commercial flights and air cargo. National Risk Assessment 2016 South American cocaine is trafficked into Tanzania Foreign threats for money laundering come from by air for further international distribution. Tanzania “unlawful dealing in Government trophy, drugs produces cannabis and khat for domestic trafficking and smuggling of goods.” consumption and regional distribution.”

Overall terrorist financing (TF) risk was rated Primary Jurisdiction of Money “Medium” based on the TF threat which was rated Laundering Concern as “Medium” and TF vulnerability which was also US Department of State - INCSR 2019 rated “Medium”. 5.3 Corruption: According to Tanzania’s NRA, For more details on specific threats see separate corruption is considered the most significant sections on, for example: drug trafficking, generator of illicit funds, but it also is an enabler of corruption, environmental crimes and tax evasion other crimes and protects action against criminals below. as well. Between 2011 and 2015, thousands of

Tanzania - Threat Assessment - 2020 Page 7 of 30 cases were initiated and a total sum of US$1.85 The institutions considered most corrupt are: the million was seized. Police (36%), Business Executives (32%), Judges and Magistrates (21%), followed by NGO’s (11%) Transparency International’s (TI) Corruption Local Government (10%) and Members of Perceptions Index (CPI) in 20198 ranked Tanzania Parliament (8%). These scores are nevertheless a 96/180 out of all countries listed with a score of big improvement on scores reported in 2015, for 37/100 (as “more corrupt”), an improvement from Police (50%), Judges and Magistrates (36%) and 30/100 in 2015 (score are from zero (highly corrupt) MP’s (21%). to 100 (very clean).

TI - CPI Scores (out of 100) � TI & Afrobarometer Findings 2019 (% Survey) �

37.0 66.0 33.0 32.0 58.0 27.0 36.0 25.0

2010 2013 2016 2019 ”Increasing” ”Doing Badly” ”Paid Bribe” ”Most Corrupt - Police”

The World Bank in its Governance Indicator - Notwithstanding this, their 2019 Report, Overview Corruption Control9 rated Tanzania 39/100. The of corruption and anti- corruption in Tanzania,14 TI 2018 TRACE Bribery Risk Matrix10 places Tanzania reported that, “the Tanzanian government, under in the “high” risk category, ranking it 139 out of 200 the presidency of John Magufuli, has cracked down surveyed countries with a risk score of 60. heavily on corruption. Despite the current anti- corruption campaigns, however, political, petty and 36/100 (as “more corrupt”) ranked grand corruption seem to be endemic in the 99/180 country.” TI CPI 2018 25% pay bribes to access public According to PWC’s Global Economic Crime & services in last 12 months Fraud Survey11 2018, the incidence rate for Bribery TI - 2019 and Corruption in Tanzania is 31%, against a 30% incident rate in , 32% in all of Africa and TI also report on the importance and correlation 25% globally. between the lack of freedom and corruption, citing Freedom House, in its 2019 Freedom in the World According to TI’s Global Corruption Barometer report, which accords the status of partly free to (GCB) survey of People and Corruption: Citizen's Tanzania with an aggregate freedom score of Voices from Around the World12, and TI Tanzania’s 45/10015. Overview of corruption and anti- corruption in Tanzania13 2019, 66% of Tanzanians, in 2019 5.4 Organised Crime: Based on the results from thought that corruption had increased in the past the 2019 African Organised Crime Index16 (OCI), 12 months and that 25% of Tanzanians using public Tanzania is rated as High Criminality and Low services paid a bribe in the previous 12 months. Resilience, alongside other Sub Saharan Countries,

Tanzania - Threat Assessment - 2020 Page 8 of 30 such as: Cameroon, Central African Republic, Ivory as present across the continent, “play an important Coast, DRC, Guinea, Madagascar, Mozambique! role in Tanzania Criminal networks, foreign actors Sierra Leone, South Sudan, Togo, Uganda and and state-embedded actors play an important role Zimbabwe. in a range of illicit markets, moving commodities from and through the country, with an absence of High Criminality - Low Resilience “Mafia style Groups” noted. Corruption notably Africa’s OC Index 2019 protects and enables higher- value trade. Asian

According to the African Organised Crime Index, actors and networks from neighbouring countries Tanzania ranks 17th (out of 54 African Countries) are noted as being particularly rooted in certain and 6th (out of 9 East African Countries) in the criminal markets.” Index for levels of criminality, with a broad range of OC Index - Criminal Actor Types - Importance � established criminal markets, but an absence of any particularly dominant criminal actor-types.

6.0 Main criminal markets are Drugs 5.5 5.5

(Cannabis & Heroin), Green Crimes 3.0 (Wildlife, Logging & Mining) & Human Trafficking Criminal Networks State Embedded Foreign Actors Mafia Style Africa’s OC Index 2019 5.5.1 Environmental “Green” Crimes: Illegal

The main markets, according to the OCI, with Wildlife: According to the NRA, poaching is one of highest criminality scores (rated 1-10 with 10 the the major concerns in Tanzania. Wildlife in highest) were illegal drugs, with Cannabis (8/10) Tanzanian National parks and game reserves is and Heroin (7.5/10) the most significant. poached for body parts such as tusks, skins, claws and bones. Some animals are smuggled alive out of OC Index Criminal Markets - Importance - � the country.

Elephants and Rhino’s are threatened 8.0 7.0 7.0 7.5 with extinction 5.5 6.0 6.0 6.0 NRA 2016

Rhino horns and elephant tusks fetch very high Arms Wildlife HT Mining Logging Heroin Cannabis Human Smugg prices abroad especially in some Far East countries. These are then followed by Environmental Crimes, In those countries, these animal parts and live Illegal Wildlife and Illegal Logging (7/10) and Illegal animals are prestigious collectibles and they are Mining (6/10), at the same level as Human also used for medicinal purposes. As a result of Trafficking (6/10) and Human Smuggling (6), with poaching, animals such as elephants and rhinos are Arms Trafficking (5.5/10), Synthetic Drugs (5/10) & threatened with extinction. Cocaine (4.5/10). 5.5.2 Environmental “Green” Crimes 2: Illegal The African OCI also suggests that 3 out of the four Mining: According to the Africa’s OCI, “Extensive main types of criminal actor typologies highlighted

Tanzania - Threat Assessment - 2020 Page 9 of 30 mineral reserves, including tanzanite, rubies, gold, Liberia & Cameroon in Sub Saharan Africa. Recently silver, diamonds, coal and uranium, make the Tanzania has fought back against illegal fishing, country very susceptible to non-renewable-resource with estimates suggesting that the Tanzania crimes, including both resource extraction and government lost US$220 million a year, in revenue smuggling. The government has taken significant collection in 2013. In tackling illegal fishing, the and effective steps to curtail these, but there is room government has focussed on the use of for improvement.” inappropriate fishing gear; over-exploitation; destruction of fish habitats though blast fishing and The NRA also highlighted Tanzania’s abundance of other harmful practices. So called “blast fishing” mineral riches, and the concern around illegal uses dynamite and this activity has devastated parts mining and illegal trading in precious minerals and of Tanzania’s coastline. In 2016, there were an stones. Between 2011 and 2015, US$7.2 million estimated 60,000–80,000 blasts along Tanzania’s worth of illegal proceeds were confiscated, mainland coast19. representing an average of US$2.4 million a year. 5.5.5 Environmental “Green” Crimes: Waste/ 70% of timber is unaccounted for, Pollution: In Tanzania’s major towns and cities, including high-value protected species solid and liquid wastes are left untreated. As a Africa Organised Crime Index 2019 result, air and water are contaminated with pollutants, a major health hazard for those who live 5.5.3 Environmental “Green” Crimes: Illegal in under-privileged areas. In Dar es Salaam, few Logging: A majority of Tanzanians rely on wood for people are connected to a sewage system. The few their energy needs, and forests are targeted and sewage systems that exist disgorge their waste trees felled illegally, causing deforestation. directly into the ocean, affecting marine habitats According to the Africa’s OCI, “Illegal logging is of and the species that live there. particular concern, where it is estimated that more than 70% of the total timber harvested is 5.6 Human Trafficking: Tanzania is a Tier 2 unaccounted for, including high-value protected (Watchlist) US TIP rated Country. According to the species. This causes huge losses in government US TIP 201820, “Tanzania is a source, transit, and revenue and biodiversity.” Based on 2017 exports, destination country for men, women, and children of US$65 million17, the value of illegal logging in subjected to forced labor and sex trafficking. Tanzania is estimated at least US$46 million. Internal trafficking is more prevalent than transnational trafficking and characteristically 5.5.4 Environmental “Green” Crimes: Illegal facilitated by the victims' family members, friends, Fishing: Tanzania primarily produces wild fish in or intermediaries offering assistance with education Lake Victoria – the world’s second-largest or securing employment in urban areas. freshwater lake – and along its coast. Impoverished children from the rural interior remain According to the Illegal Fishing Index18 Tanzania, most vulnerable to trafficking. Girls are exploited in scores 2.65/5, with a global average of 2.29 (with 5 domestic servitude throughout the country and in being the worst), ranking Tanzania as 18th worst out sex trafficking particularly in tourist hubs and along of 152 in the Index, and behind only Sierra Leone, the border with Kenya.”

Tanzania - Threat Assessment - 2020 Page 10 of 30 Tanzania - Threat Assessment - 2020 Page 11 of 30 Children are subjected to forced labor on farms – 5-14 work (29.3%), with 94% of child Labour in including as cattle herders and occasionally as the agriculture sector. Industries producing hunters – and in mines and quarries, the informal cloves, coffee, gold, Nile Perch, sisal, tanzanite, commercial sector, and on fishing vessels operating tea & coffee use child labour. on the high seas. Media reports also allege that traffickers subject girls to sex trafficking in China. 5.7 Drug Trafficking: Tanzania has an estimated 247,000 People25 with illegal drug use disorders US Tier 2 Country for Human Trafficking (2017), representing 0.52% of the population. The US TIP 2018 NRA reports that drug trafficking is the second

Tanzanian nationals are sometimes subjected to largest likely generator of criminal proceeds in forced labor, including domestic servitude, and sex Tanzania, after corruption. A total of US$45 million trafficking in other African countries, the Middle in illegal drugs was seized, between 2011 and East, Europe, Asia, and the United States. More than 2015, valuing that at US$15 million a year. Based 6,000 Tanzanians, particularly from Zanzibar, are on estimates on the value of Drug Trafficking across working in Oman, with many, according to Human SSA, Tanzania is estimated as generating US$58.5 Rights Watch21, in forced labour conditions in million a year. domestic service. OC Index - Drug Trafficking - Importance - �

According to a 2017 Report from UNICEF, ILO and the World Bank22, child labour in Tanzania affects an estimated 4.2 million children aged 5–17 years, 8.0 7.5 4.5 5.0 about 29% of this age group. Trafficking victims from other countries – including children from Cocaine Synthetics Cannabis Heroin Burundi and Rwanda, as well as adults from India, Based on the findings of the African OCI, “Tanzania Nepal, and Yemen – are subjected to sex trafficking is a major trans-shipment country for illicit narcotics. and involuntary servitude, including forced labor in Despite declaring a ‘war on drugs’, the interdiction Tanzania's agricultural, mining, and domestic capacity of government forces is weak, marked by service sectors. corruption and porous borders. The country is at the According to the 2018 Global Slavery Index23, nexus of a number of inland and coastal trafficking Tanzania has 336,000 modern day slaves, routes.” Tanzania has become a major landing point representing an incidence of 6.2/1000 people, and for Afghan heroin entering Africa by maritime and is rated 29th (worst) of 51 African Countries, with a air routes. Synthetic drugs and cocaine also pass government response of CCC, meaning that their is through this hub. a limited response. 5.8 Goods Piracy:Tanzania imports much of its 336,000 modern day slaves manufactured goods and machinery from abroad, Global Slavery Index 2018 to meet high demand for affordable goods. Criminal groups are responding to this demand by According to the US Bureau of International supplying counterfeit products, into a market that is Labour Affaires24, 3.6 million children aged

Tanzania - Threat Assessment - 2020 Page 12 of 30 recognised as one of the high threat markets in There were 31% who reported that they had lost Tanzania’s NRA. According to Interpol’s Overview of between US$100,00 and US$1 million, 20% Serious and Organised Crime in East Africa reporting losses below US$25,000 and 14% losses Report26 2018, counterfeit drugs make up the of between US$1 million and US$5 million. Asset largest criminal market for fake goods, not just in misappropriation was cited by 23%of the the Region, but across the African continent, in respondents as the most common and disruptive many cases sourced from China. economic crime noted in Tanzania.

Between 2011 and 2015, US$385,000 worth of After asset misappropriation, bribery & corruption, goods were seized and confiscated. The estimated business conduct/misconduct, cybercrime, value for counterfeit goods in Tanzania is US$462 accounting fraud, fraud by the consumer, HR fraud million (based on 6% of total imports in 2017 of and procurement fraud. US$7.7 billion). 5.11 Cybercrime: In Tanzania, cybercrime is the 5.9 Theft /Stolen Goods and Smuggling: fourth most prevalent form of economic crime at an According to the NRA, crimes considered as a incident rate of 23%, according to PWC’s Global “Medium High” ML Threat include theft and goods Economic Crime & Fraud Survey28 2018, based on smuggling across borders, mainly to evade tax. 61 Tanzanian respondents being senior officers, for Crimes considered as “Medium” ML Threat example in Executive Management, Finance, Audit include: armed robbery, counterfeiting of etc, from large medium and small organisations, banknotes, banking fraud, human trafficking and with some larger organisations being globe smuggling of migrants, environmental crimes, spanning enterprises, state owned enterprises and organised criminal activities and racketeering, and NGO’s. The incidence rate within the financial piracy of goods. services sector in Tanzania was even higher with 45% of the respondents within this category saying 5.10 Financial Fraud: According to PWC’s Global that they had suffered economic crime. This was Economic Crime & Fraud Survey27 2018, 3 in 5 second only to fraud Committed by the consumer respondents (based on 61 Tanzanian respondents that had an incidence rate of 55%. However, 33% of being senior officers, for example in Executive the respondents felt that cybercrime has the Management, Finance, Audit etc, from large potential to be the most disruptive fraud type, medium and small organisations, with some larger ahead of fraud committed by the consumer at 25%. organisations being globe spanning enterprises, Across all sectors and in terms of level of state owned enterprises and NGO’s) reported disruption, 11% of the respondents in Tanzania having experienced at least one form of economic reported cybercrime as the third most disruptive crime in the past two years. economic crime.

3 in 5 Tanzanian respondents reported According to Interpol’s Overview of Serious and having experienced at least one form of Organised Crime in East Africa Report29 2018, economic crime in the last 24 months cybercrime is on the rise in the region and involves, PWC 2018 “illegal access (hacking), online frauds, card frauds, phishing, cyber-stalking, child pornography, Tanzania - Threat Assessment - 2020 Page 13 of 30 malware, computer enabled terrorism, identity theft, In 2019, the Organisation for Economic Co- unsolicited messages, violation of intellectual operation and Development’s (OECD) Global property rights, and the use of internet in Forum on Transparency and Exchange of commission of a range of other transnational Information for Tax Purposes visited Tanzania after organised crimes in general. they “joined the Forum with the aim to join the global efforts in fighting offshore tax evasion by Interpol report that cyber criminals are targeting implementing the internationally agreed tax the financial services sector including mobile transparency standards”32. The capacity building money service providers, web/online services, program was aimed at exploring legislative social media platforms, and a number of e- changes and expansion of exchange of information commerce websites, platforms, and services. networks to assist with raising domestic revenues Interpol cite a “lack of investment and awareness and addressing illicit financial flows. Tanzania has exacerbated by limited capacities to prevent, not yet been formally reviewed as to its level of detect, and investigate cybercrime incidents is compliance with standards of Exchange of further driving this criminality.” Information on Request (EOIR)33.

Lack of investment and awareness to Tanzania has a Tax to GDP ratio of 12.4%34, which is risks of cybercrime below the average African figure of 16.2% ranking Interpol 2018 9th lowest out of 40 SSA Countries, and rated According to the Africa Cyber Security Report across Africa as a “Medium” Tax Collection Country. 201730 by Serianu, an information technology 5.13 Overall Threat Level: According to FCN, the services and business consulting firm, Tanzania lost overall FC Threat Level is rated as “Very High” US$99 million from cybercrime. Threat (23/100), ranked equal highest 35th/40. 5.12 Tax Evasion: According to the NRA, tax evasion, by large corporations, petty traders and street vendors is one of the major concerns in Tanzania, and is likely the 4th largest in terms of the generation of illicit proceeds, with tax evasion experienced at all levels,. Between 2011 and 2015, US$75 million of evaded tax was recovered, averaging US$25 million a year.

Tax evasion is considered 4th in terms of importance NRA 2016

The Tax Justice Network31 includes Tanzania in its Financial Secrecy Index 2020, ranking it 98/133 with a secrecy score of 71.

Tanzania - Threat Assessment - 2020 Page 14 of 30 Tanzania - Threat Assessment - 2020 Page 15 of 30 Section 6 - Sanctions & Terrorism

In this Section 6, the focus in on Sanctions and attacks to al-Shabaab but have yet to formerly Terrorism threats. acknowledge or reveal the Group’s level of activity in the Country.” 6.1 Sanctions: Tanzania is not subject to 39 Sanctions. Tanzania is a Tier 2 Country According to analysis conducted by the Critical (Moderate Risk based on 3 Tiers) PPI Index35 Threats Project, Tanzania may be at risk from the expansion of the Salafi-jihadi threat in East Africa. (Proliferation) with a “Moderate” response An emerging Islamic State–linked insurgency in (423/1,300). Tanzania has 4 OFAC SDN’s listed Mozambique may spill into Tanzania which “is a with connections to Tanzania. UN experts on N refuge and recruiting ground for Salafi-jihadi Korea included Tanzania in their most recent militants operating in neighbouring countries” They report to the UN SC (March 2019) as a Country claim that “some of the militants in northern potentially violating UN - DPRK Sanctions. Mozambique are likely Tanzanian40. North Korea, Syria, Iran & Cuba have embassies in Tanzania. Also that “ Tanzanians form one of the largest contingents of foreign fighters in al Shabaab, al North Korea, Iran, Syria & Cuba have Qaeda’s Somalia-based East African affiliate. Embassies in Tanzania Deteriorating political conditions in Tanzania may FCN Research create new opportunities for Salafi-jihadi groups to forge ties with local populations. Political turmoil in 6.2. Terrorism & Extremism: Overall, terrorism the Muslim-majority Zanzibar archipelago has remains a significant issue across Eastern Africa, already helped push some Zanzibari youths to join but more so for Tanzania’s neighbours, than so far, al Shabaab.” They predict that “Zanzibar’s crisis will for Tanzania itself. The Global Terrorism Index36 deepen ahead of elections scheduled for 2020.” rates Tanzania as “Low” at 2.834/10 “Tanzanian authorities have linked Terrorism impact rating of “Low” several domestic attacks to al-Shabaab Global Terrorism Index - 2019 but have yet to formerly acknowledge That said foreign tourists, for example UK nationals or reveal the Group’s level of activity in are advised37 that, “although Tanzania has not the Country.” suffered a major terrorist incident since the Counter Extremist Project - 2018 bombing of the United States embassy in 1998, Another group, Al-Muhajiroun of East Africa which there have been a number of smaller scale is based in Kenya, which seeks to implement sharia incidents,” and, “most attacks target the local across East Africa, has in the past released security forces,” but that “terrorists are likely to try to statements directly threatening Tanzania. carry out attacks in Tanzania.”

According to the Counter Extremist Project38, “Tanzanian authorities have linked several domestic

Tanzania - Threat Assessment - 2020 Page 16 of 30 Tanzania - Threat Assessment - 2020 Page 17 of 30 Tanzania - Threat Assessment - 2020 Page 18 of 30 Section 7 - Money Laundering

In this Section 7, the focus is on Tanzania’s goods, and overseas, for example through vulnerability to money laundering. sales of illegal wildlife products, or heroin in destination markets such as Asia and Western 7.1 Higher Risk Areas: Higher risk areas have Europe. The amounts laundered in Tanzania been identified through the published NRA will include domestic proceeds and some and from other sources, including those set proceeds generated in neighbouring countries out in this Country Threat Assessment. In many or overseas though these will be limited. cases a single risk factor may not be evidence Domestic proceeds, for example corruption of actual higher risks, and higher risks may be may also be laundered overseas. more likely to arise where a number of risk factors are identified. 7.1 Cash Based Money Laundering: Tanzania remains a cash based economy, though this is Tanzania Higher (Inherent) Risk Factors changing. Much of the day to day, person to

Customer Sector Country person transactional activity occurs via Risks Risks Risks exchange of cash for goods or services, with Customers with elevated Banks (in particular Retail and Major Export / Import Partner exposures to Criminal Correspondent Banks) Countries (Trade Mispricing Real Estate, Motor Vehicle and IFF’s - particularly mining many areas of the Country still unbanked, but activities such as: drugs and Dealers & Hawala all “High” - and extraction sectors) wildlife trafficking, Illegal NRA logging & mining, smuggling Neighbouring Countries in increasingly mobile money is becoming more of goods & along with Dealers in Precious Metals & particular Zambia, Kenya & Stones, Bureau de Change, Uganda corruption (e.g PEP’s) which and more popular. It is therefore not unusual Casino’s, Lawyers, Notaries, also helps facilitate these Micro Credit Companies - Kenya, Somalia (Terrorism Al crimes & tax evasion rated “Medium High” - NRA Shabaab) for relatively large cash transactions to be

Informal Sectors China (Wildlife, Mining, to Higher Risk Sectors and/or Logging) undertaken, including when purchasing high Geography Risks Vietnam (Wildlife) value assets, such as real estate, vehicles, gold

According to the NRA, the banking sector, real and gems. estate, motor vehicle dealers and hawala were 7.2 Trade Based Money Laundering: identified as the main sectors through which Tanzania's main ports are in Dar es Salaam as the proceeds of crime are channelled, to the well as in Zanzibar, with a huge new port under extent these formal sectors are used & rated as consideration at Bagamoyo, which if built (with a “high” threat. Dealers in precious stones and Chinese financing), will be the largest in sub- metals, bureaux de change, casinos and other Saharan Africa if completed as planned. gaming activities, lawyers, notaries and other Currently Dar es Salam port handles almost 1 independent legal professionals, micro credit million containers a year, which makes it companies were rated “medium high” threat. vulnerable to money laundering via trade. Criminal Proceeds are generated in Tanzania for example through sexual exploitation of 7.4 Other Money Laundering: Securities, forced labour, but also in neighbouring Transaction and VC laundering are not Countries, for example through smuggling considered significant.

Tanzania - Threat Assessment - 2020 Page 19 of 30 Section 8 - Illicit Funds including Estimated Criminal Proceeds

In this Section 8, the focus is on Tanzania’s Whilst not all IFF’s are made up of criminal vulnerability to Illicit Financial Flows and illegal activity, a significant proportion are. Proceeds and to the laundering of criminal and According to the sources and analysis carried other illicit funds. out in this Threat Assessment, estimates for It is estimated that Tanzania suffered from Illicit criminal proceeds, laundered funds and funds Financial Flows (IFF’s) with “36 Advanced generated by corruption and organised crime, Economies” with US$4.8 billion, from amongst others, are estimated in the following 2004-2013 according to the African Union41, ranges: and US$602 million a year on •Total estimates for criminal average from 2008-2017, Total Criminal Proceeds in Sub Saharan Africa in US$ Billions - proceeds combined of 8.5 according to Global Financial FCN 2020 (not including fraud and corruption and tax evasion) to 11.5%44 of GDP and with Integrity42 (GFI), with US$321 10 - 15% of this estimated million in 2017 (18.21%). as costs of corruption. Mining Fishing 10 2.5 According to GFI, the most Wildlife 2 Goods Piracy • Total estimates for monies common method for 9 available for laundering Logging transferring illicit financial 12.5 Modern Slavery through the formal sector is funds, is through trade mis 8.3 50 - 60% of criminal pricing. GFI believe this Drugs 3 Theft proceeds and 26 - 28%45 method or series of techniques 15 involving organised crime, may represent up to 80%43 of with most significant illicit financial flows, and can criminal actors being criminal networks, involve abusive and or aggressive transfer closely followed by states enabled and pricing (which can be construed as tax foreign actors. avoidance or evasion, depending upon the circumstances), trade mis pricing and mis- • The largest criminal markets in Tanzania will invoicing, for example intentionally overpaying include Corruption, Fraud, Smuggling / Tax for imports of goods or services (or Evasion, and those crimes identified as the underpaying for exports or services) which is a largest markets across Sub Saharan Africa straightforward way of illegally transferring (see Pie Chart), with Green Crimes and Drugs monies out of a Country. The risks, according elevated. to GFI increase in trade dealing with so called advanced economies.

Tanzania - Threat Assessment - 2020 Page 20 of 30 Section 9 - Resilience & Response

In this Section 9, the focus is on Tanzania’s level in 2014. The latest follow-up MER47, relating to of resilience and response. Tanzania was undertaken in 2017 and significant improvements are still required. The 9.1 FATF: Tanzania was evaluated by the mutual evaluation review under the new FATF Eastern and Southern Africa Anti-Money Methodology is currently underway and results Laundering Group (ESAAMLG) with the World are expected in 2020. Bank as an observer in 2009 (based on the pre-2012 requirements) and the Mutual 9.2 Resilience to Organised Crime: Evaluation Report (MER) was published in According to the Organised Crime Index 2019, 2010. Tanzania is rated “Low Resilience” with an overall score is 4.13/1048. Country Evaluation expected in 2020 FATF MER Calendar “Low Resilience” OC Index - 2019 The Report46 found that the AML/CTF regime in Tanzania was at an early stage of On Resilience it states that Tanzania is a “mid- development and highlighted that, “the ranked Country in Africa with regards to geographical position of Tanzania makes it a resilience, ranking 22nd [out of 54] on the strategic gateway into East and Central Africa continent. While resilience is deemed as for legitimate and illicit trade. Dar es Salaam is moderate, with the government prioritising the a major sea port that serves Mainland Tanzania. fight against organised crime, evidence of In addition, a large number of land- locked tangible implementation is lacking. Experts countries.... depend on Dar es Salaam for note the shrinking space for civil society, and movement of goods.” state targeting of lower-level drug users and trafficking victims, as being of significant Tanzania acknowledges in the Report that, concern.” A “decline in press freedom, “money laundering, terrorist financing and government officials’ alleged involvement in corruption remain serious impediments to criminal networks, and a business environment attain national development objectives, with likely to provide incentives for citizens to theft and robbery the most reported cases, but engage in illicit activities” are also highlighted. corruption related cases are also quite high. Illicit trafficking in drugs is also of growing Ratings by the OC Index for a number of component parts which make up the overall importance.” “Resilience” rating are: AML - 5.5/10, Economic Tanzania is currently under review by the Regulatory Environment - 4.5/10, Law Enforcement ESAAMLG and is due to report in 2020. - 5/10 & International Co operation - 4/10 Tanzania was removed from the FATF Watchlist

Tanzania - Threat Assessment - 2020 Page 21 of 30 Tanzania - Threat Assessment - 2020 Page 22 of 30 9.3 Law Enforcement/Asset Seizures: levels of freedom have some correlation with According to the NRA, between 2011 and corruption and criminality levels and of course 2015, seizures included US$1.85 million for levels of modern slavery. corruption, US$45 million for drug trafficking, The Freedom in the World 2019 report accords US$7.2 million for minerals and precious Tanzania the status of “partly free” with a score stones, US$385,000 for counterfeit drugs and of 45/100. US$75 million for tax evasion. According to the Heritage Foundation’s 2019 In total over this period, US$130 million was Index of Economic Freedom50, Tanzania seized averaging US$26 million a year, or economic freedom score is 60.2 making its US$11 million, excluding recoveries from tax economy one described as “moderately free” evasion. Tanzania holds the seat as the current and 94 out of 180. President of the Asset Recovery Inter-Agency Network for Southern Africa (ARINSA) until 58,5 rating and 14/54 in Africa June 2020. At the last ARINSA meeting held in Mo Ibrahim African Governance Index - 2018 June 2019, the Vice-President, Samia Suluhu 9.6 Governance: Mo Ibrahim Foundation Hassan, stated that “assets, including minerals Governance51 scores, Tanzania at 58.5 /100 worth US$41 million, determined to be the (African average is 49.9) and 14th out of 54 in proceeds of crime, were confiscated and Africa, with an “increasing Improvement” nationalised by the Government in 2018.”49 Ranked 17th worst out of 129 US$26 millions seized annually Countries, scoring 6.63/10, NRA 2018 Basel AML Index 2019

9.4 Financial Intelligence Unit: Tanzania’s FIU 9.7 Basel AML Index: According to the was established in 2007 and joined the 201952 findings, the Ivory Coast has an AML Egmont Group in 2014. To date there is no score of 6.63/10 ranked 17th worst from 129 Financial Information Sharing Partnership countries. (FISP) in Tanzania.

“Partly free” Freedom in the World Index 2019

9.5 Freedom: Beyond the definitions ascribed to Human Trafficking and or Modern Slavery, a broader concept of freedom is described by Freedom House’s, Freedom in the World Index, which ranks Countries and their citizens as either, “free” “partly free” or “not free.” The

Tanzania - Threat Assessment - 2020 Page 23 of 30 Section 9 - Resilience & Response Continued

Based on the FCN Sub Saharan Africa Risk Rating Model, Tanzania is rated overall “High” risk at 34/100 with a “Very High” threat score of 23/100 and a “Moderate” response scoring 44/100 to the ranking Tanzania overall as 28th best out of 40 SSA Countries.

Ranges for individual components are summarised below, with Low Response - RED, Moderate Response - Amber & Higher Response - Green, (see Section 4 for actual ratings).

Key component ratings showing the progress for FATF MER ratings (where available) and for OC Index for Resilience, and over time in the Mo Ibrahim African Governance Index and the Basel AML Index are also shown.

Not Yet Available

Tanzania - Threat Assessment - 2020 Page 24 of 30 Section 10 - Observations & Recommendations (O&R’s)

Based on this Tanzania Threat Assessment, the current FI / DNFPB assessments based on following Observations and Recommendations technical regulatory compliance to one (O&R) are made as follows: based more broadly on testing effectiveness. O & R for Tanzanian Financial Institutions Overall Observations & Recommendations Tanzanian FI’s may want to consider whether • The Country Threat Assessment was their AML/CTF/Proliferation Programmes published in 2016 and should be refreshed, reflect the threats identified and/or if changes & updated. Tanzanian should be achieving or enhancements are needed. much greater asset recoveries than those reported, which represent less than 1% of O & R for Foreign Financial Institutions estimated criminal proceeds. The FIU should finalise and publish annual reports, covering Foreign Financial Institutions that have its work, its resourcing, STR filing (including exposures to Tanzania, from outside the asset values) whether it is effective, and the Country may want to consider the following: measurements and evidence to support • Tanzanian PEP’s are likely inherently higher effectiveness, and or an action plan to risk, due to high levels of corruption in improve effectiveness. The FIU should Tanzania, and the State enabled actor scores establish a Financial Information Sharing in the OC Index, so FI’s should consider Partnership. undertaking EDD+ & Heightened • The MER Report should be finalised and Monitoring. published in 2020, which will enable • Tanzania can be considered “High” FC risk stakeholders to understand the response in from a Foreign FI’s perspective, relative to Tanzania to financial crime, proliferation other countries around the world. Tanzania terrorism / terrorism finance threats. is also though having an Improving” trend, • Tanzania has started to address and target with TI CPI scores, governance scores, reduced levels of corruption, particularly by freedom Scores and FATF scores all senior public officials, but should also target improving. the justice system, including the police, • Pending the publication of the MER 4th including increasing resources to levels round Report, it is premature to speculate as commensurate with meeting the far as compliance with FATF requirements for fighting financial crime Recommendations, (particularly R-8 NPO’s, expectations/commitments. R10-CDD, R12-PEP, R13-CBR, R14-MSB’s, • Tanzania should i) review current priorities R15-NewTech, R23- Supervision & R26-FIU, and resourcing to ensure a renewed focus on and on Effectiveness (particularly IO3 main criminal markets and those activities Supervision, IO4-FI (& others) Preventative that pose the greatest threats and harms. Measures, IO6-FIU & IO8-Confiscations. These should include Green crimes, and ii) • Once published these may have an impact enhance the response of the private sector, on risk ratings for NPO’s, CBR’s, MSB’s, by incentivising improvements in VASP’s and other FinTech’s from TZ, and the “preventative measures” by moving beyond overall TZ Risk Ratings.

Tanzania - Threat Assessment - 2020 Page 25 of 30 Appendix 1 - Range Matrices by FCN

In Section 8 Illicit funds including “Criminal Proceeds”, estimates for criminal funds in percentage terms and for “Costs of Corruption”, as well as estimates for “Laundering” and “Organised Crime” are set out, based on the inputs and calculations explained below.

1. Criminal Proceeds and Corruption: Table A1 below illustrates how the final estimates for Criminal Proceeds and Costs of Corruption are estimated. By taking the level of Criminality in the OC Index 2019, and the score from TI’s Corruption Index 2019, FCN’s overall Country Risk Rating, and based on the aggregate of these 3 sources a final range estimate for criminal proceeds can be established. For corruption, the three sources are used, but ranges then depend on the level of corruption based on TI’s Corruption Perception Index 2019 score.

Table A1. Range Matrix for Estimating Criminal Proceeds & Corruption by FCN - 2020 - (Very High Rating is 4, High Rating is 3, Moderate Rating is 2 & Low Rating is 1 - with all scores aggregated for OCI Criminality, TI CPI & FCN Country Score

Bottom of the Range % of Top of the Range % of GDP Corruption % of Proceeds If Corruption % of Proceeds If Corruption % of GDP If Score GDP Very High Levels (CPI) High Levels (CPI) Moderate Levels (CPI)

12 10.5% 12.5% 15-20% 10-15% 5%-10%

11 10% 12% 15-20% 10-15% 5%-10%

10 9.5% 11.5 15-20% 10-15% 5%-10%

9 9% 11% 15-20% 10-15% 5%-10% (Includes a V High)

9 8.5% 11.5% 15-20% 10-15% 5%-10% (No V Highs)

8 8% 11% 15-20% 10-15% 5%-10%

7 7.5% 10.5% 15-20% 10-15% 5%-10%

6 7% 10% 15-20% 10-15% 5%-10% (Includes a High)

6 6.5% 9.5% 15-20% 10-15% 5%-10% (No Highs)

5 6% 9% 15-20% 10-15% 5%-10%

4 5.5% 8.5% 15-20% 10-15% 5%-10%

3 5% 8% 15-20% 10-15% 5%-10% (Includes a Moderate)

3 4.5% 7.5% 15-20% 10-15% 5%-10% (no Moderates)

2 4% 7% 15-20% 10-15% 5%-10%

1 3.5% 6.5% 15-20% 10-15% 5%-10%

Note: TI CPI Scores below 50 are rated: 40-49 Moderate to High, 30 to 39, High, below 30 Very High; OCI Criminality Scores are rated: 6 or above at Very High, 5 - 5.9 at High, 4 - 4.9 Moderate and below 4 as Low; FCN Scores are rated: 1-19 - Extremely High, 20 - 29 Very High, 30 - 39 High, 40 - 49 Moderate - High, 50 - 59 Moderate, 60 - 69 Low- Mod, 70 - 79 Low, & 80 - 100. For Costs of Corruption, ranges then depend on the level of corruption based on TI’s Corruption Perception Index 2019 score. For more details on source information for the OC Index, see HERE53, for TI CPI Index see HERE54 and for the results for Tanzania for criminality for corruption and the FCN Country Risk Rating Score see Section 3 above.

Tanzania - Threat Assessment - 2020 Page 26 of 30 2. Monies available for Laundering: Table A2 below illustrates how the final estimates for the range for monies available for Laundering was established. The top of the estimated range is 76% of criminal proceeds, based on the findings of the UNODC 2011 Study, which found that of US$2.1 trillion estimated global proceeds, that US$1.6 trillion was available for laundering or 76%, and that most of this this was expected to be available to be laundered via the formal financial sector. Based on the relatively low levels of financial inclusion in most Sub Saharan African Countries compared with the rest of the world, and the size of the shadow and informal economies, as well as the dominance still of cash within Sub Saharan economies, the estimates available for laundering through the formal financial sector have been assessed with these factors in mind based on the range estimates set out below, from sources estimating bank account and mobile money penetration. Tanzania is rated “Lower.” For more details on source information on Financial Access, see HERE55.

Table A2. Ratings Range Matrix for Laundering by FCN - 2020

Financial Access Range % for Laundering Financial Access Range % for Laundering Criminal Proceeds Criminal Proceeds

V Low Access Levels 40-50 Moderate Access Levels 60-70 < 30% bank accounts >40% - 50% bank accounts AND OR <30% mobile money >40% - 50% mobile money OR vice versa

Lower Access Levels 50-60 Higher Access Levels 70-76 >30% - 40% bank > 50% bank accounts accounts OR OR > 50% mobile money >30% - 40% mobile money

3. Criminal Proceeds Involving Organised Crime: Table A3 below illustrates how the final estimates for the range for criminal proceeds involving Organised Crime was established. The top of the estimated range is 46% of criminal proceeds, based on the findings of the UNODC 2011 Study, which found that of US$2.1 trillion organised crime were involved in US$960 million or approx 46%. Table A takes the different scores for organised crime in Sub Saharan African Countries reported by the OC Index and presents an estimate or range as a % of criminal proceeds, established as set out in Appendix 1 Section 1 above. Tanzania is rated 5.0. For more details on OC information Financial Access, see HERE56.

Table A3. Ratings Range Matrix for Involvement by Organised Crime by FCN - 2020

Criminal Actors Score in OC Index Range % for OC Financial Criminal Actors Score in OC Index Range % for Involvement OC Involvement

Below 4 /10 in OC Index 2019 22-24 Rated 6 - 6.5/10 in OC Index 2019 32-34

Rated 4 - 4.5/10 in OC Index 2019 24- 26 Rated 6.5 -7/10 in OC Index 2019 34-36

Rated 4.5-5/10 in OC Index 2019 26-28 Rated 7-7.5/10 in OC Index 2019 36-38

Rated 5-5.5/10 in OC Index 2019 28-30 Rated 7.5-8/10 in OC Index 2019 38-40

Rated 5.5-6/10 in OC Index 2019 30-32 Rated 8/10 in OC Index 2019 or above 40-46

Tanzania - Threat Assessment - 2020 Page 27 of 30 Endnotes 1 See: https://www.cia.gov/library/publications/the-world-factbook/geos/tz.html 2 See: https://epi.envirocenter.yale.edu/epi-indicator-report/EPI 3 See: https://www.wttc.org/api/sitecore/DownloadForm/DownloadPdf? token=bBhJjBeP3urrjS4nZeQqYoPHdWJIWE0H7B5%2FvZdsHqAJEr9IYqc1mF%2FYWvQjBMJz0zBeCPGJjjUyzmiPtIqc5mytiyiJBhmIPSDy9UmfcaGI0jtt%2FEpAZZPKriNSF9IASWTr0SD QTYBuEg4Tychx1Q%3D%3D 4 See: https://datareportal.com/reports/digital-2020-tanzania 5 See: https://migrationdataportal.org/data?i=stock_abs_&t=2019&cm49=834 6 See: https://www.fiu.go.tz/TanzaniaNRA(Main)ReportDec2016.pdf 7 See: https://www.state.gov/2019-international-narcotics-control-strategy-report/ 8 See: https://www.transparency.org/cpi2019?/news/feature/cpi-2019 9 See: https://info.worldbank.org/governance/wgi/Home/downLoadFile?fileName=wgidataset.xlsx/ 10 See: https://www.traceinternational.org/trace-matrix#157 11 See: https://www.pwc.co.tz/assets/pdf/gecs-2018-report.pdf 12 See: https://www.transparency.org/news/feature/global_corruption_barometer_citizens_voices_from_around_the_world 13 See: https://knowledgehub.transparency.org/assets/uploads/helpdesk/Country-profile-Tanzania-2019_PR.pdf 14 See: https://knowledgehub.transparency.org/assets/uploads/helpdesk/Country-profile-Tanzania-2019_PR.pdf 15 See: https://freedomhouse.org/report/freedom-world/2019/tanzania 16 See: https://ocindex.net/assets/downloads/ocindex_profile_tanzania.pdf 17 See: https://wits.worldbank.org/CountryProfile/en/Country/TZA/Year/LTST/TradeFlow/Export/Partner/by-country/Product/44-49_Wood 18 See: http://www.iuufishingindex.net/profile/tanzania 19 See: https://rusi.org/sites/default/files/201911_whr_3-19_turning_the_tide_de_rivaz_web.pdf 20 See: https://www.refworld.org/docid/5b3e0a624.html 21 See: https://www.hrw.org/sites/default/files/report_pdf/tanzania1117_1.pdf 22 See: http://www.ucw-project.org/attachment/3009201844child_labour_youth_employment_Tanzania.pdf 23 See: https://www.globalslaveryindex.org/2018/findings/regional-analysis/africa/ 24 See: https://www.dol.gov/agencies/ilab 25 See: https://ourworldindata.org/illicit-drug-use 26 See: https://enact-africa.s3.amazonaws.com/site/uploads/2018-12-12-interpol-east-africa-report.pdf 27 See: https://www.pwc.co.tz/assets/pdf/gecs-2018-report.pdf 28 See: https://www.pwc.co.tz/assets/pdf/gecs-2018-report.pdf 29 See: https://enact-africa.s3.amazonaws.com/site/uploads/2018-12-12-interpol-east-africa-report.pdf 30 See: https://www.theeastafrican.co.ke/business/Africa-loses--3-5b-to-cyber-crime/2560-4532928-1392g40z/index.html 31 See: https://fsi.taxjustice.net/en/introduction/fsi-results 32 See: http://www.oecd.org/tax/transparency/the-global-forum-on-tax-transparency-assists-togo-and-tanzania-in-the-fight-against-tax-evasion.htm 33 See: https://www.oecd.org/tax/transparency/exchange-of-information-on-request/ratings/ 34 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 35 See: http://isis-online.org/uploads/isis-reports/documents/ThePeddlingPerilIndex2019_POD.pdf 36 See: http://visionofhumanity.org/app/uploads/2019/11/GTI-2019web.pdf 37 See: https://www.gov.uk/foreign-travel-advice/tanzania/terrorism 38 See: https://www.counterextremism.com/countries/tanzania 39 See: https://www.criticalthreats.org/analysis/a-salafi-jihadi-insurgency-could-spread-to-tanzania 40 See: https://www.businesslive.co.za/bd/world/africa/2017-12-28-mozambique-cracks-down-on-tanzanians-accused-of-terrorism/ 41 See: https://au.int/sites/default/files/documents/37326-doc-k-15353_au_illicit_financial_flows_devv10_electronic.pdf 42 See: https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-content/uploads/2020/03/GFI-Trade-IFF-Report-2020-Final.pdf?time=1583530239 43 See: https://gfintegrity.org/gftrade/ 44 See: https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-content/uploads/2020/03/GFI-Trade-IFF-Report-2020-Final.pdf?time=1583530239 45 See: https://secureservercdn.net/45.40.149.159/34n.8bd.myftpupload.com/wp-content/uploads/2020/03/GFI-Trade-IFF-Report-2020-Final.pdf?time=1583530239 46 See: https://esaamlg.org/reports/Tanzania_Mutual_Evaluation_Detail_Report.pdf 47 See: https://esaamlg.org/reports/Progress%20Report%20Tanzania-2018.pdf 48 See: https://ocindex.net/country/tanzania 49 See: https://www.unodc.org/southernafrica/en/arinsa-members-sign-the-dar-es-salaam-declaration-on-strengthening-asset-forfeiture-for-development.html 50 See: https://www.heritage.org/index/explore 51 See: http://iiag.online 52 See: https://www.baselgovernance.org/sites/default/files/2019-08/Basel%20AML%20Index%202019.pdf 53 See: https://ocindex.net 54 See: https://www.transparency.org/cpi2019?/news/feature/cpi-2019 55 See: https://datareportal.com/library 56 See: https://ocindex.net

Tanzania - Threat Assessment - 2020 Page 28 of 30 Message from the Editor - FCN

This Country Threat Assessment focuses on the financial crime threats and responses and is both a stand-alone publication, but can also be read in conjunction with the Global Threat Assessment, published in 2019 and the Sub-Saharan Threat Assessment published in 2020. The Sub-Saharan Threat Assessment has been supplemented by this country threat assessment, as well as for other countries in Sub-Saharan Africa. The individual threat assessments have been co-created with dedicated financial crime fighters from the countries covered, and/or with the help of professionals familiar with the country and the region, based on a consistent approach researching available open source information. Judgement has been applied in deciding what to include and what to emphasise. Each threat assessment follows the same structure and includes the same main sources, usually over 50 sources from important and credible agencies, in the form of reports, papers and or ratings. The threat assessments include the results from the FCN Sub-Saharan Africa 2020 Risk Rating Scorecard which includes a significant number of these sources to aggregate the threats and the responses to derive a final rating and a final ranking.

More Financial Crime Materials from FCN

Global Threat Phase 1 - 19 Country Sub Saharan Africa Sub Saharan Africa Assessment by FCN - Threat Assessments Country Risk Ratings Threat Assessment by 2019 by FCN - 2020 FCN - 2020

Available at: https://thefinancialcrimenews.com For Subscription for Commercial Businesses / Free to NGO’s and Policy Makers Or Contact the Editor: [email protected]

Acknowledgements: Thanks and appreciation to a number of colleagues and collaborators who freely gave their time, to research, comment and provide advice in connection with this Tanzanian Country Threat Assessment, including: Hans Peter Bauer, Alois Maluvu, Ursula M’Crystal, Victoria Meyer, Bruce Viney & Andrew Williams.

Information to Note: The information, provided in this Country Threat Assessment is designed to help those involved in combating financial crime. The Editor (John Cusack) takes full and sole responsibility for the contents of this document, including any opinions, observations or recommendations, but does not take responsibility for referenced materials, that are the responsibility of the authors and publishers as appropriate. References are provided for information purposes and do not constitute endorsement of any information. readers should be aware that website references listed may change.

Author(s) & Editor The Author and Editor of this work is John Cusack. John Cusack is a leading financial crime fighter, Editor of the Financial Crime News, former Global MLRO at UBS and Standard Chartered Bank, Two time Co Chair of the Wolfsberg Group (to end 2019), and adviser to a number of financial institutions, Regtech Providers, and engaged with NGO’s combatting wildlife and human trafficking.

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