Financial Crime World

MALI Struggles to Meet FATF Compliance Regulations, Receives Mixed Ratings

Malawi has recently received a mixed bag of ratings from the Financial Action Task Force (FATF) in its report on the country’s compliance with anti-money laundering and combating the financing of terrorism regulations. The report assessed Malawi’s implementation of 40 recommendations aimed at preventing financial crimes.

Progress Made, Challenges Remain

According to the report, Malawi has made some progress in implementing the technical requirements of the FATF Recommendations, but still faces challenges in several areas. The country received a rating of “largely compliant” (LC) for nine recommendations, including:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Money laundering offence
  • Confiscation and provisional measures
  • Targeted financial sanctions related to terrorism and terrorist financing
  • Wire transfers

Areas Requiring Improvement

Malawi received a rating of “partially compliant” (PC) for 12 recommendations, including:

  • Customer due diligence
  • Record keeping
  • Politically exposed persons
  • Correspondent banking
  • Money or value transfer services
  • New technologies
  • Reporting of suspicious transactions
  • DNFBPs: customer due diligence
  • Transparency and beneficial ownership of legal arrangements
  • Regulation and supervision of financial institutions
  • Cash couriers

Compliance Shortcomings

However, the country received a rating of “non-compliant” (NC) for six recommendations, including:

  • Non-profit organisations
  • Higher-risk countries
  • Transparency and beneficial ownership of legal persons
  • Regulation and supervision of DNFBPs
  • Extradition

Malawi also received a rating of “compliant” (C) for four recommendations, including:

  • Financial institution secrecy laws
  • Tipping-off and confidentiality
  • Powers of supervisors
  • Mutual legal assistance

Call to Action

The FATF report has identified several areas where Malawi needs to improve its compliance with the regulations, including:

  • Strengthening national cooperation and coordination mechanisms
  • Enhancing customer due diligence requirements
  • Improving record keeping and reporting systems

Malawi’s financial sector regulators and law enforcement agencies will need to take concrete steps to address these shortcomings in order to prevent financial crimes and protect the integrity of the country’s financial system.