Money Laundering Trends in Malawi: An Examination

Introduction

Malawi’s Financial Intelligence Authority (FIA) has identified various money laundering trends and typologies in the country. This article aims to summarize these findings and highlight the methods used by perpetrators.

Common Money Laundering Methods

The FIA report reveals that several methods are being used to launder money, including:

1. Abuse of Government Funds

• Senior public officials are involved in theft of public funds
• Creating private businesses or using third-party accounts to move funds

2. Theft of Public Funds through Fictitious Payments

• A senior public official was found to have stolen over MK350 million by authorizing payments without validation of supporting documents

3. Ghost Workers

• Perpetrators opened bank accounts to receive payments with transaction descriptions of payroll from various Government ministries and departments

Indicators of Money Laundering

The FIA has identified several indicators of money laundering in these cases, including:

• Business accounts receiving huge amounts of funds transfers inconsistent with business profiles
• Deposits followed by transfers to personal accounts
• Account transactions inconsistent with customer profiles
• Preferential use of mobile banking to transfer funds through daily limits
• Use of third-party accounts to make transactions look legitimate

Action Taken by the FIA

The Financial Intelligence Authority has taken action in these cases, including:

• Arrests
• Freezing and restraining assets
• Preservation of evidence

By understanding these money laundering trends and typologies, the FIA can continue to take proactive measures to prevent and combat financial crimes in Malawi.