Financial Crime World

Malawi Tightens Belts on Anti-Money Laundering Regulations

A Strong Framework Against Financial Crimes

Malawi has made significant strides in enforcing anti-money laundering (AML) regulations, with a robust framework in place to prevent financial crimes. The country’s AML/CFT (Combating Financing of Terrorism) and Combating Financing of Proliferation legislation is aligned with the Financial Action Task Force (FATF) Recommendations.

Evolution of Anti-Money Laundering Legislation

In 2006, Malawi enacted the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act. However, this act was later repealed by the Financial Crimes Act in 2017. The Reserve Bank of Malawi established a separate division to oversee AML/CFT supervision in 2009.

Membership and Evaluations

Malawi is also a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a regional body that assesses countries’ implementation of AML/CFT measures. In 2008 and 2018, Malawi underwent mutual evaluations by the World Bank under the Financial Sector Assessment Programme (FSAP). The second round was approved by the ESAAMLG Council of Ministers in September 2019.

National Risk Assessments

To gauge its vulnerabilities to money laundering and terrorist financing, Malawi conducted a national risk assessment (NRA) in 2013, which was updated in 2018. These assessments analyzed the risks and threats facing the country, including major predicate offenses generating significant criminal proceeds and terrorism-related threats. They also evaluated Malawi’s capabilities to combat financial crimes and vulnerabilities within its financial sector.

Commitment to Anti-Money Laundering Regulations

The efforts demonstrate Malawi’s commitment to enforcing AML regulations and mitigating financial risks. The country is expected to continue strengthening its framework to prevent and detect money laundering, terrorist financing, and proliferation financing activities.

Key Takeaways

  • Malawi has a robust framework in place to prevent financial crimes
  • The country is a member of the ESAAMLG and underwent mutual evaluations by the World Bank under FSAP
  • National risk assessments were conducted in 2013 and updated in 2018 to gauge vulnerabilities to money laundering and terrorist financing
  • Malawi is committed to enforcing AML regulations and mitigating financial risks