Security experts have warned that Rwanda is not immune from acts of terrorism like those other East African countries are grappling with.

Rwanda recently hosted a regional workshop on financial crimes, during which the country was warned to be wary of money laundering syndicates that have permeated financial systems in the region.

Rwanda’s financial system like those other countries in the region has been infiltrated by money laundering.

Authorities admit that it has been hard to eradicate the vice as criminals use legal instruments to cover their tracks.

In the East African Community, Kenya is ranked number one in money laundering followed by Uganda, Tanzania and Rwanda respectively.

READ: Mobile money laundering on the rise in EA

The influx of refugees from the war-torn Somalia has been blamed for the rampant money laundering in the region.

“This practice is prevalent in all countries in this region and it has become a tool to finance AlShabab terror group in Somalia, which is spreading to all countries in the region,” said Daniel Ochieng, regional co-ordinator of the Institute of Terrorism Research and Response.

Although it is difficult to quantify the amount that is lost through money laundering, analysts confirm that it highly distorts national economies and say measures to fight the practice should be stepped up.

Western countries have already warned that the region needs strict anti-money laundering laws to curb the crime and strangle terrorism networks operating in the region.

“Governments and financial institutions should equip employees with technological skills to monitor and minimise the magnitude of the vice,” added Mr Ochieng.

The delegates heard that financial institutions can detect money laundering in their systems when transactions of customers are inconsistent with their profile, when bank drafts are cashed for foreign currency and cash deposited domestically is withdrawn from ATMs offshore.

Experts warned that although money laundering has been used to finance terrorism in the region, terrorism can also be financed through individuals, non-governmental organisations and corporate companies.

“Money laundering takes place due to corruption and abuse of office by individuals, but the other challenge that we still face is the new e-payment systems that we still struggle to control,” said Joy Ntare, a director of financial stability at the National Bank of Rwanda.

READ: Rising crime a threat to EAC integration

The delegates also noted that most governments in sub-Sahara Africa are still reactive rather than proactive in fighting money laundering in the region.

“Financial institutions still face challenges of legal and regulatory environments and are yet to adopt best practices in combating the crime,” added Mrs Ntare.

Rwanda finds itself in a precarious position, following threats by the Al-Shabaab terror group to attack neighbouring Uganda and Burundi.

The two countries have sent their soldiers to join the war against the terror group in the war-torn Somalia under the African Union Mission in Somalia.

In July 2010, the terror group carried out their attacks in Uganda, killing and injuring over 70 soccer fans who were gathered in restaurants watching the FifaWorld Cup finals in South Africa.

The 2010 attack and fresh threats have led to speculation that the criminals could set up base in the country to plan terror against Uganda and Burundi.

Kenya has in the recent past experienced a string of grenade attacks in Nairobi and Mombasa. after its troops entered Somalia to fight Al-Shabaab.

Recently, there were also riots in the country’s coastal town of Mombasa when a terror suspect, Aboud Rogo was murdered.

Money laundering is mostly experienced in Kenyan financial system where claims of piracy money landing in some of the country’s key sectors. However, the Kenya has enacted anti-money laundering law that sets rules for international transfer of money and buying and selling of foreign currencies.

READ: Kenya FRC to fight money laundering

To curtail money laundering, Kenyan government ordered the closure of a commercial bank over claims it was involved in the vice.

However Kenyan parliament has dismissed the claims and gave it a clean bill of health to continue operating.

“Rwanda faces the same mortgage risk where laundered money is invested in property and it can be reinvested into terrorist activities,” said Luke Mulunda, the operations Manager at cyber Security Africa.

Cyber security is working with financial institutions and governments in consultancy services especially information protection which is central to the field of security.

READ: Cyber fraud costing firms money, assets, reputation, posing threat to investments

Besides financing terrorism, money laundering Money has been used to support drug trafficking.

READ: EAC urged to enact tough laws against trafficking

The delegates at the Kigali workshop were also told that money laundering also poses a threat to the economy of a country as it can scare away crucial foreign direct investment.