Financial Crime World

Mozambique Struggles to Combat Financial Crime Amid Bank Secrecy Laws

Lisbon, Portugal - Mozambique’s Efforts Under Scrutiny

Mozambique’s attempts to prevent money laundering and terrorist financing have been put to the test as the country faces criticism from the global financial community. The country’s bank secrecy laws have long been a concern for international watchdogs, who argue that they hinder efforts to combat financial crime.

New Anti-Money Laundering and Combating Terrorist Financing Laws

In response to these concerns, Mozambique has implemented new anti-money laundering and combating terrorist financing (AML/CFT) laws. The new regulations, which came into effect in August, require financial institutions and other gatekeeper entities to implement stricter measures to prevent money laundering and terrorist financing.

Key Requirements of the AML/CFT Law

  • Financial institutions are required to identify their customers and verify their identity through valid documentary evidence.
  • They must notify the Financial Intelligence Office of Mozambique (GIFiM) within 24 hours or a maximum of three days if they suspect any suspicious activities.
  • Gatekeeper entities are required to obtain information regarding the names of relevant persons with management positions in legal persons and other autonomous estates.
  • Entities that deal with “Politically Exposed Persons” are subject to stricter standards.

Criticism from the Financial Action Task Force (FATF)

Mozambique’s anti-money laundering efforts have been criticized by the FATF, which placed the country on its “grey list” in 2019 due to concerns over its bank secrecy laws and lack of effective measures to combat financial crime. The country’s failure to comply with international standards has resulted in the loss of foreign investment and damage to its reputation.

Consequences of Non-Compliance

Failure to comply with the AML/CFT Law can result in fines ranging from MZN 2 million to MZN 10 million for financial entities, and from MZN 600,000 to MZN 6 million for natural persons. Non-financial entities can face fines ranging from MZN 1 million to MZN 5 million for legal persons, and from MZN 300,000 to MZN 3 million for natural persons.

Conclusion

Mozambique’s struggle to combat financial crime highlights the need for the country to implement effective anti-money laundering measures. The new AML/CFT Law is a step in the right direction, but more needs to be done to ensure that the country is able to effectively prevent and detect money laundering and terrorist financing activities.