Malawi Introduces New Requirements for Verifying Foreign Nationals’ Proof of Residency
In a move aimed at strengthening financial regulations, the government of Malawi has introduced new requirements for citizens and residents to verify proof of residency for foreign nationals. This change is intended to help prevent money laundering and terrorist financing in the country.
Risk-Based Approach
Reporting institutions are required to use a risk-based approach when verifying proof of residency. This includes obtaining current utility bills, city rates bills, lease agreements, tenancy agreements, or customer business premises visitation reports. These documents will be used to verify the particulars and details referred to in Regulation 6(1) and (2) in respect of foreign nationals.
Verification Process
To independently verify particulars and details, reporting institutions must confirm the information given by the person with their bank in their country of origin or residence. If it is not practical to contact the person’s bank, reporting institutions can use any other information obtained from independent and reliable sources while taking into account the risk posed by:
- The jurisdiction of origin or residence
- Nature of business
- Products and services offered by the institution
Business Relationships
Reporting institutions are required to establish a business relationship with foreign nationals for at least 90 days before allowing international electronic funds transfers. Additionally, where a permit has not been granted by the authority responsible for immigration, the relationship shall be suspended until a permit is duly granted.
Forcedly Displaced Persons
In the case of forcibly displaced persons, reporting institutions must require a government-recognised identification document, including a United Nations High Commissioner for Refugees (UNHCR) identity card.
Trusts
When verifying particulars obtained in respect of trusts, reporting institutions must:
- Compare registration certificates with documents submitted to the office of the Registrar of Companies
- Independently verify information about trustees, founders, and beneficiaries
- Physically verify business premises and contact information provided
If it is not practical to verify trust particulars, reporting institutions can use any other information obtained from independent and reliable sources while taking into account the risk posed by:
- The jurisdiction where the trust is registered
- Nature and business of the trust
- Products and services offered by the institution
Reactions
The regulations have been welcomed by financial experts who believe they will help to prevent money laundering and terrorist financing in Malawi.