Financial Crime World

Anti-Money Laundering (AML) and Know-Your-Customer (KYC) Regulations in Malawi

Customer Identification

Reporting institutions in Malawi are required to verify the identity of customers prior to establishing a business relationship. The verification process involves checking the customer’s particulars, such as:

  • Name: Verify the customer’s full name and any aliases.
  • Date of birth: Confirm the customer’s date of birth.
  • Address: Ensure the customer’s address is accurate and up-to-date.
  • Identification documents: Verify the authenticity of identification documents, such as passports or national ID cards.

Risk-Based Approach

Reporting institutions should use a risk-based approach when verifying the identity of customers. This includes:

  • Limiting transactions based on the customer’s risk profile: Assess the customer’s risk level and adjust transaction limits accordingly.
  • Verifying the source of funds: Confirm the origin of the customer’s funds to prevent money laundering.
  • Verifying proof of residency: Ensure the customer’s address is accurate and up-to-date.

Verification Methods

The following verification methods should be used:

For Malawi Citizens and Residents

  • Verify bank account in country of origin or residence: If possible, verify the individual’s bank account in their country of origin or residence.
  • Use other reliable sources: Use utility bills, lease agreements, or other government records if contacting the bank is not practical.

For Foreign Nationals

  • Verify with bank in country of origin or residence: If possible, verify with the individual’s bank in their country of origin or residence.
  • Use other reliable sources: Use government records, business documents, or other reliable sources if contacting the bank is not practical.

Special Cases

Reporting institutions must verify the identity of designated persons and entities on a list published by the relevant authorities. For forcibly displaced persons, reporting institutions should require a government-recognized identification document, such as a United Nations High Commissioner for Refugees (UNHCR) identity card.

Reporting institutions must verify the particulars of trusts and legal arrangements, including:

  • Registration certificates and founding documents: Verify registration certificates and founding documents.
  • Information about trustees, founders, and beneficiaries: Confirm information about trustees, founders, and beneficiaries.
  • Physical verification of business premises: Verify the physical location of the trust or legal arrangement.