Zambia AML for Accountants: FIC Act and 2022 Regulations

In Zambia, accountants are covered by the Financial Intelligence Centre Act, 2010 (Act No. 46 of 2010), as amended by the Financial Intelligence Centre (Amendment) Act, No. 16 of 2020, and by the Financial Intelligence Centre (General) Regulations, 2022 (Statutory Instrument No. 54 of 2022). This guide is built from those three texts as published on Laws.Africa. One caution up front: the 2010 text we read was the original version, so where we cite it we say so, and we recommend checking the consolidated Act before you rely on any section number.

Are accountants covered?

Yes, for part of their work. The 2020 amendment defines a reporting entity as an institution that must report under the Act and is regulated by a supervisory authority, including financial service providers, designated non-financial businesses and professions (DNFBPs) and virtual asset service providers. Under the amended definition of a DNFBP, legal practitioners, notaries, independent legal professionals and accountants are included when they prepare or carry out certain client transactions. Auditors are not named in the text we read. The General Regulations support this reading: the suspicious transaction report form for DNFBPs (Form V) lists "Accountant/Auditor" and "Accounting Services" among its categories.

Who supervises accountants

The 2020 amendment lists the Bank of Zambia, the Securities and Exchange Commission, the Zambia Institute of Chartered Accountants (ZICA) and the Financial Intelligence Centre itself among the supervisory authorities. It does not say which authority supervises which kind of accountant, so confirm with ZICA and the Centre. Under section 36 of the original Act, supervisors must monitor and ensure compliance, can require information, can impose sanctions for non-compliance, and must pass suspicions of money laundering to the Centre.

Reporting: three working days

Section 29(1) of the original Act requires a report to the Centre not later than three working days after forming a suspicion, and section 29(2) extends the duty to attempted transactions. The General Regulations back this up: their suspicious transaction report forms state that the report must reach the Centre not later than three working days of forming the suspicion. Regulation 17(2) requires a full description of the transaction and the reason for suspicion.

For cash, the Fourth Schedule to the General Regulations requires a report of a currency transaction equal to or above the kwacha equivalent of USD 10,000, whether the transaction is in kwacha or a foreign currency, within three working days after the transaction.

Due diligence

Section 16(1) of the amended Act requires reporting entities to identify and verify customers when opening accounts or establishing business relationships, and in other listed circumstances. Where due diligence cannot be completed, section 16(9) requires a report, and section 16(10) says that where verification would tip off the customer, the entity must not do it and must file a report instead. The General Regulations add that you must verify identity (regulation 7), update customer records periodically (regulation 7(6)) and apply enhanced measures to high-risk customers (regulation 10). Section 19 of the original Act requires risk management systems that identify high-risk customers, obtain senior management approval, establish source of wealth and funds, and monitor more closely. See our guide to customer due diligence in accountancy practices for how this looks in practice.

Compliance programme and compliance officer

Section 23 of the original Act requires programmes covering internal controls, staff screening, ongoing training, prevention of technology misuse and independent audit. Under section 23 as amended, the compliance officer must be at senior management level, have two years' regulatory compliance experience, not have a qualifying conviction with a sentence of at least six months without a fine option, and be certified and approved by the Centre.

Records and tipping off

• Records (original section 22): customer identity documents and account files for at least ten years after the relationship ends, transaction records for at least ten years from the transaction date, and copies of suspicious transaction reports for at least ten years from the report. The General Regulations also state a ten-year minimum (Fourth Schedule, paragraph 4).
• Tipping off (original section 33): a reporting entity and its staff must not disclose to a customer or a third party that a report has been or will be made, or that an investigation is under way, subject to exceptions in section 33(2).

Penalties

The Acts express penalties in penalty units, and the texts we read do not state their value, so we do not convert them into kwacha.

• failing to report intentionally or negligently (original section 45): a fine not exceeding 700,000 penalty units, or imprisonment not exceeding seven years, or both;
• tipping off (original section 33(3)) and failing to maintain a compliance programme (original section 44): a fine not exceeding 500,000 penalty units, or imprisonment not exceeding five years, or both;
• administrative financial penalties (amended section 49C(1)(f)): not exceeding one million penalty units, with compounding of offences available for up to fifty percent of the maximum fine with the Director of Public Prosecutions' written consent, and a right of appeal to the High Court within thirty days.

What we could not confirm

• The consolidated Act. The original 2010 text may have been changed by the 2020 amendment or other legislation in ways we did not check.
• Which supervisory authority is responsible for your firm.
• The value of a penalty unit.
• Whether ZICA has issued sector guidance, which we did not look for in this guide.

Practical steps: our suggestions

These are our suggestions, not requirements of the Act.

1. Confirm your supervisory authority in writing.
2. Check that your compliance officer meets the amended section 23 criteria and is certified by the Centre.
3. Build a reporting process that can meet a three-working-day deadline, and test it on a sample case.
4. Keep the ten-year record period in your retention schedule.
5. Read the consolidated Act and General Regulations in full.

For comparison with other African regimes, see our guides to Uganda, Kenya and Ghana.

Frequently asked questions

How quickly must a suspicion be reported in Zambia?

Not later than three working days after forming it, according to the original Act and the 2022 General Regulations.

What is the cash reporting threshold?

A currency transaction equal to or above the kwacha equivalent of USD 10,000, according to the Fourth Schedule to the General Regulations.

Are auditors covered?

The amended definition names accountants, not auditors, but the DNFBP reporting form lists "Accountant/Auditor". Ask your supervisor how they treat audit work.

This guide is general information, not legal advice.