Financial Crime World

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Malawi’s Financial Sanctions and Compliance Under Scrutiny

Kampala, Malawi - As the world grapples with the ever-evolving threat of money laundering and terrorist financing, Malawi’s financial sanctions and compliance regime has come under scrutiny. The country’s progress in implementing the Financial Action Task Force (FATF) Recommendations has been assessed, revealing both strengths and weaknesses.

Technical Compliance Rating

Malawi’s technical compliance rating is a mixed bag, with some areas showing significant improvement while others require more attention. According to the latest assessment, Malawi scored:

  • Largely Compliant in several areas, including:
    • Assessing risk and applying a risk-based approach (R.1)
    • National cooperation and coordination (R.2)
    • Money laundering offence (R.3)
    • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Partially Compliant in areas such as:
    • Confiscation and provisional measures (R.4)
    • Terrorist financing offence (R.5)
    • Customer due diligence (R.10)
  • Not Compliant in areas such as:
    • Financial institution secrecy laws (R.9)
    • Record keeping (R.11)
    • New technologies (R.15)

Weaknesses Identified

The assessment identified several weaknesses in Malawi’s financial sanctions and compliance regime, including:

  • Lack of effective regulation and supervision of DNFBPs (R.28)
  • Transparency and beneficial ownership of legal persons and arrangements (R.24 and R.25)
  • Absence of adequate measures to prevent the misuse of new technologies for money laundering and terrorist financing (R.15)

Recommendations

To address these weaknesses, Malawi is recommended to:

  • Strengthen its regulatory framework
  • Enhance cooperation with international partners
  • Improve its ability to detect and prevent money laundering and terrorist financing

In conclusion, while Malawi has made progress in implementing the FATF Recommendations, there is still much work to be done to ensure that the country’s financial sanctions and compliance regime is robust and effective. The government must address the identified weaknesses and continue to strengthen its efforts to combat money laundering and terrorist financing.