Staff Reporter
THE Namibia Revenue Agency (NamRA) will officially introduce the Trade Verification System (TVS) on November 17, with the aim of enhancing trade operations by addressing issues such as fraud and financial discrepancies.
Yarukeekuro Ndorokaze, NamRA’s Chief of Strategic Communications and Support Engagements, affirmed that TVS is a collaborative venture with the Bank of Namibia, with the shared goal of reshaping trade operations in Namibia. The aim of the system is to enhance the efficiency and transparency of trade processes in the country.
“Over the past years, trade has been heavily dependent on paperwork, necessitating labour-intensive manual handling, which has proven to be arduous and susceptible to errors, fraud, and non-compliance concerns. The international trade system is subject to a wide range of vulnerabilities exploited to advance fraud, capital flight, tax evasion, and especially Trade-Based Money Laundering (TBML),” Ndorokaze said.
He elaborated on the key weaknesses in national assurance frameworks, which stem from the lack of mechanisms to align or cross-reference trade declarations, including those made through customs, with the corresponding financial transactions. In the absence of this reconciliation framework, he stressed that the Financial Intelligence Centre (FIC) identified substantial foreign currency losses, as indicated by irregular outward remittances for non-existent imports, affecting Namibia.
“The discovered losses led to the establishment of a Public-Private Partnership (PPP) under the leadership of the FIC. The PPP’s investigation observed losses to the tune of N$3 to 4 billion over a three-year period,” Ndorokaze said.
He disclosed that the results of the investigation proposed the establishment of a nationwide system to harmonize trade declarations with pertinent financial transactions carried out within the financial sector. According to him, this framework has been under development for several years and has now reached its culmination with the introduction of TVS.
“To create efficiencies, ensure compliance, deter illicit capital flows and illicit practices, and streamline trade operations, many countries have adopted the concept of trade verification systems. This system automates trade, reduces the reliance on manual processes, advances, and ensures the authenticity of documents, avails a single source of truth on which both customs and the financial services can rely to enable capital exportation as payment for foreign goods and services, and reduces operational costs, while ensuring regulatory compliance,” Ndorokaze said.
He clarified that trade verification systems present a more effective, secure, and technologically advanced method for conducting international trade. He explained that these systems are progressively gaining prevalence in contemporary global trade due to their ability to tackle numerous constraints and issues associated with conventional trade practices.
“Integrated with NamRA’s Automated System for Customs Data (ASYCUDA), the innovative system enables the user to declare transactions in multiple currencies and also offers users the ability to manage documents and update relevant export and import information. Furthermore, traders now have the opportunity to create their own Unique Consignment Numbers (UCR) for declarations at NamRA and commercial banks, particularly for prepaid export transactions,” Ndorokaze added.
Moreover, he pointed out that the system also streamlines the operations of commercial banks by allowing them to incorporate new data elements specifically designed for automating and efficiently managing transactions. He went on to clarify that these unique identification numbers will empower banks to accurately confirm the identity of traders during transactions and ensure compliance. This will enable both the Bank of Namibia and commercial banks to establish effective oversight, accountability, and financial precision.
“Trade verification systems offer a more efficient, secure, and technologically advanced approach to international trade. This initiative signifies a step forward in maintaining a sound financial system,” Ndorokaze said.
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