16 May 2024

IFFs and money laundering / Counterfeit cash in the Democratic Republic of the Congo

The Congolese population and economy are bearing the brunt of organised criminals and their counterfeit currency.

Counterfeit cash hurts businesses, buyers and the entire economies of countries – and this criminal industry is rife in Africa.

In February 2021, the Uganda Police Force arrested 10 people – the majority of whom were from the Democratic Republic of Congo (DRC) – in a Kampala suburb. The suspects were found with US$2.4 million (about UGX9 billion) worth of counterfeit United States (US) dollar currency notes ready for circulation in Uganda and the region. In January 2023, Uganda Revenue Authority enforcement officers arrested a Congolese national trafficking fake dollar bills worth US$500 000 concealed in his luggage.

The circulation of counterfeit currency notes is an endemic problem in most African countries. According to an INTERPOL liaison officer, who requested anonymity, there are only about two cases of counterfeit currency reported in the DRC per year – but this represents only a drop in the ocean of counterfeit currency crime in the country.

Evidence suggests that the DRC is an origin, transit and destination country for counterfeit currency, most of which is US dollar-denominated. The crime is perpetrated by networks of criminal actors operating in the underground economy with transnational links to other African countries. Counterfeit currency notes are produced in the DRC itself, but they are also made in secret locations in neighbouring countries, and then smuggled into the DRC from Tanzania, Uganda and others.

The circulation of counterfeit currency notes is an endemic problem in most African countries

The distribution patterns of counterfeit currency notes in the DRC vary, influenced by multiple factors such as the counterfeiters' level of sophistication, their distribution networks and the techniques employed to introduce the forged currency into circulation. These criminals often target local markets or smaller businesses that engage in frequent cash transactions. Vendors, particularly those lacking proper training or equipment to identify counterfeits, may unknowingly accept these notes.

Counterfeiters focus on high-traffic areas and commercial outlets in neighbouring countries such as Rwanda and Uganda. They exploit porous borders and utilise road travel to evade detection by security and law enforcement agencies. A suspect apprehended in Rwanda in 2023 admitted to smuggling the components for the criminal operation from the DRC and then collaborating with other syndicates to manufacture counterfeit money.

A well-established correlation exists between counterfeit currency and organised crime networks. These criminals exploit fake money as a means to fund illicit activities, including human and drug trafficking, and even terrorism. In 2021, exhibits recovered from four suspects arrested in Bukavu by the Congolese National Police included AK-47 rifles, counterfeit US dollars and the equipment used to counterfeit the currency.

The primary producers of fake dollar bills in the DRC work with syndicates in East and Central Africa to funnel the counterfeit notes into the licit economy through mineral trading and other commercial activities in the DRC. They target unsuspecting people, particularly at financial establishments and commercial premises in the informal economy, offering to exchange counterfeit currency for legitimate currency at a favourable rate. Counterfeit cash is also used in transactions in the conflict-prone areas of the eastern DRC.

Counterfeit cash diminishes the worth of genuine money, affecting the country’s financial stability

This crime is enabled by both the porous borders and prevalence of informal cross-border trade activities in the country’s war zone. Incidents of counterfeit currency use often occur in the country’s east, near the Ugandan border. The crime is sustained by weak law enforcement capacity and protracted conflict in the country.

There is also a lack of public awareness about the issue. Signs of a counterfeit note include serial number discrepancies on the note, poor-quality colour, a lack of security features and the lower-grade type of paper used. However, these indicators are usually only detectable by law enforcement agents, formal businesses with modern screening technology, or those familiar with the security features of authentic currency notes. The INTERPOL officer told ENACT that the general public are unaware of the presence, much less the signs, of counterfeit currencies.

The counterfeiting and circulation of US dollar notes across the DRC is exacerbated by the dollarisation of the country’s economy. US dollar notes are accepted everywhere, including restaurants and shops, and are used for most major purchases. The Congolese CFA has been abandoned in most parts of the country, having experienced significant devaluation due to the extended civil conflict in the 1990s. The nation experienced a period of hyperinflation, during which the cost of groceries doubled every 25 days. This led to the government introducing the US dollar as the country’s legal tender, and the US dollar is now used as legal tender in both retail and wholesale commercial activities. About 90% of the assets held by the banking system are denominated in US dollars.

A report by the Action Group against Money Laundering in Central Africa (GABAC) on the effectiveness of anti-money laundering and financing of counter-terrorism measures in the DRC says this dollarisation is further entrenched by Decree-Law No. 004/2001. Introduced on 31 January 2001, this law regulates transactions in national and foreign currencies in the DRC and guarantees the unrestricted settlement of transactions in foreign currencies.

The bank should amplify efforts to disseminate information on the security features of bank notes

Irrespective of country, the effects of having counterfeit currency notes in circulation are significant. Counterfeit currency diminishes the worth of genuine money, which negatively affects the country’s overall financial stability. It also leads to inflation, burdening consumers with higher prices for goods and services. Companies suffer substantial monetary losses because of counterfeit money, as goods and services are paid for with fake cash.

The GABAC report is worrying. It affirms the investigation and prosecution of various criminal activities associated with money laundering, including the counterfeiting of currency. However, the lack of accessible statistics across different administrative bodies has impeded the collection of specific details regarding the outcomes of these legal proceedings.

Preserving the integrity of both local and foreign currency notes in the DRC falls under the purview of the country’s Central Bank, which can learn and adapt lessons from other regions to adopt primary measures to do this.

Increased and ongoing efforts to provide information and training on the security features of bank notes – to law enforcement, business and the general public – is an important pillar in these measures. Promoting and reinforcing awareness among civilians on how to detect and differentiate between real and fake US dollar currency notes, and what to do when they come across them, is a critical role that the Central Bank of the DRC needs to be playing.

Another critical pillar is continuous investment in new technology to stay ahead of counterfeiters. So too is bolstering the capacity of law enforcement, financial investigation units, prosecutors and the judiciary to investigate, arrest and expedite the prosecution of counterfeit currency offenders. As noted above, collating relevant and accurate data will be an important part of this response. These measures will send a strong message, not only to organised criminal groups but also to citizens, that the state is committed to a robust response to this crime.

The crime’s cross-border dimensions call for regional solutions through increased surveillance and partnerships with security and law enforcement agencies in neighbouring states. Underpinning this, efforts by DRC authorities in Kinshasa to control inflation, with a view to reversing the normalisation of the US dollar as the country’s legal tender, are imperative to sustaining solutions.

Oluwole Ojewale, Regional Organised Crime Observatory Coordinator – Central Africa

Image: © Samir TOUNSI/AFP


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ENACT is implemented by the Institute for Security Studies in partnership with
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