Mozambique Tightens Banking Regulations to Prevent Financial Crime

Strengthening Measures Against Money Laundering and Terrorist Financing

Maputo, Mozambique - In a bid to combat financial crime and terrorism financing, Mozambique has strengthened its banking regulations, making it mandatory for credit institutions and financial companies to implement robust measures to prevent money laundering and terrorist financing.

The Crime of Money Laundering

According to Law No. 14/2013, of August 12, the crime of money laundering is committed by individuals who intentionally or knowingly convert, transfer, assist, or facilitate any conversion operation, transfer of proceeds from criminal activities, directly or indirectly, in order to conceal their illicit origin. The law also criminalizes the concealment of the true nature, origin, location, disposition, movement, or ownership of proceeds from crime or related rights.

The Crime of Terrorist Financing

Similarly, the crime of terrorist financing is committed by individuals who provide or collect funds knowing they will be used, in whole or part, for carrying out acts of terrorism by a terrorist organization. Credit institutions and financial companies have been tasked with preventing and combating money laundering and terrorist financing through various measures.

Measures to Prevent Financial Crime

These measures include:

• Identifying clients and counterparties
• Conducting due diligence
• Refusing to carry out transactions without proper identification
• Conserving documents
• Screening suspicious operations
• Reporting suspicions
• Cooperating with judicial authorities

Supervisory Authority

The Banco de Moçambique has been designated as the supervisory authority responsible for ensuring compliance with these regulations by credit institutions, financial companies, and the Mozambique Stock Exchange. The central bank will work closely with other agencies to monitor and prevent financial crime.

Electronic Reporting of Suspicious Transactions

In a significant move, suspicious transaction reporting has been made mandatory, with transactions reported electronically through the Mozambique Financial Information Office’s (GIFiM) website. This measure is aimed at preventing the misuse of the financial system for illicit activities.

Enhancing Transparency and Strengthening Combating Capabilities

The new regulations are expected to enhance transparency in the financial sector and strengthen the country’s ability to combat financial crime and terrorism financing. Credit institutions and financial companies have been urged to implement these measures promptly to prevent the undertaking of illegal operations.