Tanzania - Threat Assessment 2020 - Page of 1 - Financial Crime News

Tanzania - Threat Assessment - 2020 Page 1 of 30

Slavery: US Traffi cking in Persons: Tier 2
 Tanzania 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 traffi cking,
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 traffi cking 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 Africa
 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, “High” Risk, 5th highest risk out of 10 Eastern
according to the OCI, with highest criminality African Countries and 28th highest risk out of
scores (rated 1-10 with 10 the highest) were 40 in FCN’s SSA Threat Assessment with a
illegal drugs, with Cannabis (8/10) and Heroin score of 34/100, but with an “Improving” tend.
(7.5/10) the most signifi cant, followed by
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 Traffi cking (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 Proceeds / Laundering
 (Average Country Score is 32 - SSA)

 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
 and Correspondent Banks) Partner Countries (Trade Mining Fishing
 exposures to Criminal
 Real Estate, Motor Vehicle Mispricing and IFF’s - 10 2.5
 activities such as: drugs Wildlife
 Dealers & Hawala all particularly mining and
 and wildlife trafficking, 2 Goods Piracy
 “High” - NRA extraction sectors)
 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
 to Higher Risk Sectors Theft
 Logging)
 15
and/or Geography Risks Vietnam (Wildlife)

 FCN SSA Country Risk Rating - Threats by FCN - Tanzania !

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 GT
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 CP
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 TIP ex life ex F’s all
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 IN EF Te US I Ov
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 USE

 FCN SSA Country Risk Rating - Response - Tanzania !

 v e I l I I $ ts all
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 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 fi ve” 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 Tourism in Tanzania
early 1960s, Tanganyika and Zanzibar 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 fi rst 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 offi ce 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 fi nancial profi le4 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* over 1% of Proceeds*
 Focus Country

 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 OECD - Global Forum Not Yet Reviewed FATF Standards Report in 2020
 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
its AML/CFT National Risk Assessment (NRA) in According to its 2019 Report7, 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 signifi cant
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 East Africa, 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.

 Main criminal markets are Drugs 6.0
 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
 7.0 7.0 7.5 8.0 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 signifi cant 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 fi sh 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
 8.0
estimated 4.2 million children aged 5–17 years, 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 traffi cking 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
Sanctions. Tanzania is a Tier 2 Country According to analysis39 conducted by the Critical
 Threats Project, Tanzania may be at risk from the
(Moderate Risk based on 3 Tiers) PPI Index35
 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
 Also that “ Tanzanians form one of the largest
embassies in Tanzania.
 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 signifi cant 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

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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 identifi ed 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 identifi ed. 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)
 Real Estate, Motor Vehicle
 Countries (Trade Mispricing
 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
 logging & mining, smuggling
 NRA
 Neighbouring Countries in
 increasingly mobile money is becoming more
 Dealers in Precious Metals & particular Zambia, Kenya &
 of goods & along with
 corruption (e.g PEP’s) which
 Stones, Bureau de Change, Uganda and more popular. It is therefore not unusual
 Casino’s, Lawyers, Notaries,
 also helps facilitate these
 crimes & tax evasion
 Micro Credit Companies -
 rated “Medium High” - NRA
 Kenya, Somalia (Terrorism Al
 Shabaab) for relatively large cash transactions to be
 to Higher Risk Sectors and/or
 Informal Sectors China (Wildlife, Mining,
 Logging)
 undertaken, including when purchasing high
 Geography Risks Vietnam (Wildlife)
 value assets, such as real estate, vehicles, gold
 and gems.
According to the NRA, the banking sector, real
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 fi nancing), 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 signifi cant.

 Tanzania - Threat Assessment - 2020 Page 18 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 average from
 • Total estimates for criminal proceeds
2008-2017, according to Global Financial
 combined of 8.5 to 11.5%44 of GDP and
Integrity42 (GFI), with US$321 million in 2017
 with 10 - 15% of this estimated as costs of
(18.21%).
 corruption.
According to GFI, the most common method
 • Total estimates for monies available for
for transferring illicit financial funds, is through
 laundering through the formal sector is 50 -
trade mis pricing. GFI believe this method or
 60% of criminal proceeds and 26 - 28%45
series of techniques may represent up to
 involving organised crime, with most
80%43 of illicit financial flows, and can involve
 significant criminal actors being criminal
abusive and or aggressive transfer pricing
 networks, closely followed by states enabled
(which can be construed as tax avoidance or
 and foreign actors.
evasion, depending upon the circumstances),
trade mis pricing and mis-invoicing, for • The largest criminal markets in Tanzania will
example intentionally overpaying for imports include Corruption, Fraud, Smuggling / Tax
of goods or services (or underpaying for Evasion, and those crimes identified as the
exports or services) which is a straightforward largest markets across Sub Saharan Africa
way of illegally transferring monies out of a (see Pie Chart), with Green Crimes and Drugs
Country. The risks, according to GFI increase in elevated.
trade dealing with so called advanced
economies.

 Section 9 - Resilience & Response

In this Section 9, the focus is on Tanzania’s level 9.1 FATF: Tanzania was evaluated by the
of resilience and response. Eastern and Southern Africa Anti-Money
 Laundering Group (ESAAMLG) with the World

 Tanzania - Threat Assessment - 2020 Page 19 of 30

Bank as an observer in 2009 (based on the mutual evaluation review under the new FATF
pre-2012 requirements) and the Mutual Methodology is currently underway and results
Evaluation Report (MER) was published in are expected in 2020.
2010.
 9.2 Resilience to Organised Crime:
 Country Evaluation expected in 2020 According to the Organised Crime Index 2019,
 FATF MER Calendar Tanzania is rated “Low Resilience” with an
 overall score is 4.13/1048.
The Report46 found that the AML/CTF regime
in Tanzania was at an early stage of “Low Resilience”
 OC Index - 2019
development and highlighted that, “the
geographical position of On Resilience it states that
Tanzania makes it a strategic Total Criminal Proceeds in Sub
 Saharan Africa in US$ Billions - Tanzania is a “mid-ranked
gateway into East and Central FCN 2020 (not including fraud Country in Africa with
Africa for legitimate and illicit and corruption and tax evasion)
 regards to resilience,
trade. Dar es Salaam is a major ranking 22nd [out of 54] on
sea port that serves Mainland Mining Fishing
 10 2.5 the continent. While
 Wildlife
Tanzania. In addition, a large Goods Piracy
 2
 9 resilience is deemed as
number of land- locked
 Logging
 moderate, with the
countries.... depend on Dar es 12.5
 Modern Slavery government prioritising the
 8.3
Salaam for movement of
 Drugs
 fight against organised
goods.” 3
 Theft
 15
 crime, evidence of tangible

Tanzania acknowledges in the implementation is lacking.

Report that, “money Experts note the shrinking

laundering, terrorist financing and corruption space for civil society, and state targeting of

remain serious impediments to attain national lower-level drug users and trafficking victims,

development objectives, with theft and robbery as being of significant concern.” A “decline in

the most reported cases, but corruption related press freedom, government officials’ alleged

cases are also quite high. Illicit trafficking in involvement in criminal networks, and a

drugs is also of growing importance.” business environment likely to provide
 incentives for citizens to engage in illicit
Tanzania is currently under review by the activities” are also highlighted.
ESAAMLG and is due to report in 2020.
 Ratings by the OC Index for a number of
Tanzania was removed from the FATF Watchlist
 component parts which make up the overall
in 2014. The latest follow-up MER47, relating to
 “Resilience” rating are: AML - 5.5/10, Economic
Tanzania was undertaken in 2017 and
 Regulatory Environment - 4.5/10, Law Enforcement
significant improvements are still required. The
 - 5/10 & International Co operation - 4/10

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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 traffi cking,
 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 defi nitions ascribed
to Human Traffi cking 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 22 of 30

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 fi nal 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 fi nal 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 fi nal 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 fi ndings 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 fi nancial sector. Based on the relatively low levels
 of fi nancial 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 fi nancial 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
 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 fi nal
 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 fi ndings 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

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