Financial Crime World

Malawi Tightens Anti-Money Laundering Regulations with New Notice

The Government of Malawi has taken a significant step to strengthen its anti-money laundering (AML) regulations by issuing a new notice. This move is aimed at enhancing the country’s efforts to combat money laundering and terrorist financing.

Key Provisions of the Financial Crimes Act

On May 15, 2020, the Financial Crimes Act came into effect, outlining key provisions and requirements for financial institutions and individuals to adhere to. Some of the key measures include:

  • Customer Due Diligence: Conducting thorough checks on customers’ identities and sources of funds
  • Suspicious Transaction Reporting: Informing the Financial Intelligence Unit (FIU) about suspicious transactions
  • Record-Keeping: Maintaining records of all transactions for a minimum of five years

The Act also requires individuals, including politicians and public officials, to disclose their assets and liabilities to the Malawi Revenue Authority.

Amendments to the Regulations

In addition to the original notice, the Government has issued the Financial Crimes (Money Laundering) (Amendment) Regulations, 2020. These amendments make several changes, including:

  • Reporting Cash Transactions: Requiring financial institutions to report all cash transactions exceeding K1 million
  • Regular Inspections: Mandating the FIU to conduct regular inspections of financial institutions to ensure compliance with AML regulations

Impact of the New Regulations

The new regulations are expected to have a significant impact on Malawi’s efforts to combat money laundering and terrorist financing. The government hopes that increased transparency and accountability will help deter illicit financial flows and promote economic stability.

However, critics argue that the regulations may be too stringent and could have unintended consequences, such as hindering legitimate business activities. As the country continues to implement these new regulations, it remains to be seen how effective they will be in achieving their intended goals.