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Malawi’s Customs Data Software Enhanced to Fight Overvaluation
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The Malawian government has enhanced its Customs data software, ASYCUDA World, with a valuation database functionality that allows for the automatic and post-clearance control of values during declaration processing.
Automated Valuation Control
The new feature records Tariff Specification Codes (TSCs) for every brand of product, setting maximum and minimum values. The database is used as a risk assessment tool and is regularly updated. It has been integrated into the risk management module, which automatically flags problematic transactions during clearance processing.
Inter-Agency Cooperation Crucial
The Malawian government has established the Financial Intelligence Authority (FIA) to identify illicit proceeds and combat money laundering and terrorist financing activities. The FIA works closely with other agencies, including:
- Anti-Corruption Bureau
- Director of Public Prosecutions
- Fiscal and Fraud Police Unit
- National Intelligence Service
- Malawi Revenue Authority
Inter-agency coordination has filled a gap in investigations of suspected offenses related to trade-based money laundering (TBML), such as overvaluation. The authorities are set to conclude memorandums of understanding with the Reserve Bank of Malawi, FIA, and Anti-Corruption Bureau to ensure coherence in their approach and effective coordination in fighting illicit financial flows.
Data Analytics Key to Success
Risk management is central to Customs activities. To strengthen its capacity, Malawian Customs has conducted a study using mirror analysis, which will help reduce revenue fraud and capital flight through overvaluation. The plan involves:
- Conducting fraud analyses using the mirror analysis technique
- Training Customs officers to conduct joint audits and investigations with external agencies
Import Documents Verification Facility
The introduction of ASYCUDA World in 2016 enabled better control of import payments. The “Import Document Verification Facility” connects ASYCUDA World to commercial banks’ computerized systems, allowing verification of the authenticity of Customs documents presented for foreign currency applications.
Before making payments, bank personnel use the interface to check that documents are compliant using a quick response code visible on MRA documents. This new process helps prevent foreign currency externalization through overvaluation.
Contact Information
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