Financial Crime World

Malawi Tightens Banking Regulations to Fight Money Laundering

In an effort to strengthen its anti-money laundering (AML) regime, the Government of Malawi has issued Government Notice 34 of 2020, outlining new banking regulations designed to combat financial crimes.

Enhanced Anti-Money Laundering Framework

The Financial Crimes Act, which came into effect on July 31, 2020, aims to enhance the country’s AML framework by introducing stricter guidelines for financial institutions. This move is expected to reduce the risk of money laundering and terrorist financing in Malawi’s financial system.

Key Requirements for Financial Institutions

  • Robust Customer Due Diligence Procedures: Banks and other financial institutions must implement robust customer due diligence procedures, conduct regular reviews of their clients, and report suspicious transactions to the Financial Intelligence Unit (FIU).
  • Accurate Records Keeping: Financial institutions must maintain accurate records of all transactions and provide information on demand by the FIU or other regulatory bodies.
  • Designated Compliance Officer: Financial institutions must designate a Compliance Officer who will be responsible for ensuring that the institution is compliant with the AML regulations.

Employee Training and Education

Financial institutions must conduct regular training programs for their employees on AML and customer due diligence procedures to ensure that they are equipped to identify and report suspicious transactions.

International Best Practices and Cooperation

Malawi’s move to strengthen its AML regime is in line with international best practices, which is expected to improve the country’s reputation as a stable and secure financial hub. The new regulations will also enhance cooperation between Malawi’s financial institutions, law enforcement agencies, and regulatory bodies to combat financial crimes.

By implementing these new banking regulations, Malawi aims to improve transparency and accountability in the financial sector, thereby reducing the risks associated with money laundering and terrorist financing.