Mozambique Introduces Foreign Account Reporting Requirements to Combat Money Laundering and Terrorist Financing

Strengthening Anti-Money Laundering and Combating the Financing of Terrorism Measures

In a bid to enhance its anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, Mozambique’s central bank, Banco de Moçambique, has introduced new foreign account reporting requirements. These regulations aim to ensure that all foreign exchange transactions are properly monitored and reported to prevent capital flight and financial fraud.

New Reporting Requirements

Under the new regulations, banks and other authorized entities involved in foreign exchange operations must report all cross-border transactions to the central bank. The reports will provide valuable information on the nature, volume, and values of international flows, enabling policymakers to make informed decisions and track potential money laundering and terrorist financing activities.

Classification Table for Foreign Exchange Transactions

The Banco de Moçambique has also introduced a classification table for foreign exchange transactions, which assigns unique references to each transaction type. This will facilitate the compilation of accurate statistics and enable the central bank to monitor foreign exchange movements in real-time.

Rules for Trading Over-the-Counter (OTC) Financial Derivatives

In addition to reporting requirements, the new regulations also outline rules for trading over-the-counter (OTC) financial derivatives, including FX forwards, swaps, and cross-currency swaps. These instruments are only allowed for hedging risks and managing cash arising from business activities, and must be traded without authorization.

Real-Time Trading of Foreign Currencies and Cryptocurrencies

The central bank has also clarified its stance on real-time trading of foreign currencies and cryptocurrencies on virtual platforms. While the undertaking of such activities is not prohibited, the Banco de Moçambique advises that those who engage in such activities do so at their own risk.

Meticalnet System

To support these new regulations, the Banco de Moçambique has developed a Meticalnet system, which will enable banks to report foreign exchange transactions electronically. The system will also facilitate the compilation of economic statistics and provide policymakers with valuable insights into the country’s financial flows.

FAQs and Guidance

The introduction of these new reporting requirements is seen as a significant step forward in Mozambique’s efforts to combat money laundering and terrorist financing. The regulations are designed to ensure that all foreign exchange transactions are transparent, accountable, and subject to proper supervision and regulation.

In related news, the Banco de Moçambique has also issued guidance on frequently asked questions (FAQs) regarding foreign account reporting requirements. The FAQs provide clarification on various aspects of the new regulations, including reporting deadlines, transaction thresholds, and exempted activities.

Conclusion

The introduction of these new foreign account reporting requirements is a positive development for Mozambique’s financial sector, as it will help to strengthen AML/CFT measures and promote transparency and accountability in international financial transactions.