Financial Crime World

Malawi’s Financial System Exposed to Money Laundering and Terrorist Financing Risks

Comprehensive Risk Assessment Reveals Vulnerabilities in Malawi’s Financial System

Lilongwe, Malawi - As the 2017/2018 financial year comes to a close, a comprehensive risk assessment report has highlighted the country’s susceptibility to money laundering (ML) and terrorist financing (TF). The National Risk Assessment (NRA), conducted by a team of experts from various sectors, including law enforcement agencies, financial institutions, and regulatory bodies, revealed that Malawi’s financial system is vulnerable to ML/TF threats from 10 sub-groups.

Limited Awareness of Money Laundering and Terrorist Financing Issues

The assessment found that there is still limited awareness of ML and TF issues among stakeholders, including law enforcement officers. This lack of understanding has hindered the effective investigation and prosecution of related cases. The report emphasizes the need for increased awareness, improved cooperation among stakeholders, and enhanced regulatory oversight to mitigate ML/TF risks.

Key Findings

  • A significant number of investigations, prosecutions, and convictions related to cash- gate cases.
  • Limited training and resources among law enforcement agencies.
  • Insufficient monitoring and reporting of suspicious transactions by financial institutions.
  • Vulnerabilities in the insurance, securities, and non-governmental organization sectors.

Recommendations for Strengthening Anti-Money Laundering and Counter-Terrorist Financing Measures

The report recommends:

  • Strengthening laws and regulations related to AML/CFT
  • Increasing public education and outreach efforts
  • Improving cooperation among stakeholders
  • Enhancing regulatory oversight

Commitment to Addressing Concerns

The Malawian government has committed to addressing these concerns and ensuring that the country’s financial system is secure and transparent. The report provides a critical framework for policymakers, regulators, and other stakeholders to develop effective strategies for mitigating ML/TF risks in Malawi’s financial system.