Enhancing Anti-Money Laundering and Combating the Financing of Terrorism Measures

New Guidelines Released by Reserve Bank of Malawi for Financial Institutions

The Reserve Bank of Malawi has issued new guidelines for financial institutions (FIs) to strengthen their anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. The guidelines aim to prevent the misuse of the financial system for illegal activities.

Key Requirements for Financial Institutions

• Develop and implement policies and procedures for:
  • Customer acceptance
  • Due diligence
  • Ongoing monitoring to control identified inherent risks
• Manage residual risk in line with the FI’s acceptable risk appetite
• Document and communicate ML/TF risk assessments to relevant business lines, the board, and all relevant staff

Identifying High-Risk Areas and Customers

• Identify specific products, services, customers, delivery channels, and geographic locations that pose a high ML/TF risk
• Consider factors such as:
  • Transaction volume
  • Customer relationships
  • Interaction with customers
• High-risk areas include:
  • Electronic funds payment services
  • Deposit products
  • Foreign exchange
  • Private banking
  • Trust and asset management services
  • Trade finance
• Customers that are likely to pose high levels of risk include:
  • Foreign FIs
  • Non-bank financial institutions
  • Individuals involved in certain business activities, such as:
    • Casinos
    • Precious metal dealing

Compliance Requirements

• Have compliance programs in place, including:
  • Reviewing relevant policies and procedures
  • Risk assessment processes
  • Training programs annually
• Implement the guidelines immediately
• Failure to comply may result in regulatory action

Source and Effective Date

Source: Reserve Bank of Malawi Guidelines on AML/CFT for Financial Institutions, October 2018.

The guidelines come into effect immediately, and all FIs are required to implement them by [insert deadline].