Financial Crime World

Mozambique Strengthens Regulatory Bodies to Prevent Financial Crime

In a bid to curb money laundering and terrorist financing, Mozambique has strengthened its regulatory bodies to prevent financial crime. The country’s legal framework has been amended with the introduction of a new Anti-Money Laundering/Combating Terrorist Financing Law (AML/CTF Law) and Regulation.

Defining Money Laundering

According to the AML/CTF Law, money laundering is defined as:

  • Converting, transferring, or assisting in any operation to conceal or disguise the illicit origin of proceeds from crime.
  • Identifying customers and their ultimate beneficial owners (UBOs) and verifying their identity.

Regulatory Bodies Responsible for Anti-Money Laundering Requirements

The following regulatory bodies are responsible for imposing anti-money laundering requirements:

  • Bank of Mozambique
  • Insurance Supervision Institute of Mozambique
  • Financial Information Office of Mozambique
  • Gaming General Inspectorate
  • Ministry of Mineral Resources and Energy
  • Ministry of Industry and Commerce
  • Other government agencies and authorities with supervisory powers

Notification Requirements and Penalties for Non-Compliance

The AML/CTF Law requires gatekeeper entities to notify the Financial Intelligence Office of Mozambique (GIFiM) whenever they find operations incompatible with their known customers or UBOs. Failure to comply with these duties and obligations constitutes a misdemeanour punishable by fines ranging from MZN 2,000,000 to MZN 10,000,000 for financial entities and MZN 1,000,000 to MZN 5,000,000 for non-financial entities.

Registry for Ultimate Beneficial Owners

The law also establishes a registry for UBOs to be implemented by the Legal Entities Registry Office. Additionally, ancillary penalties may be applicable, including:

  • Revocation or suspension of authorisation
  • Inhibition from exercising management positions
  • Closure of activities that served to commit the crime

Impact on the Economy

Mozambique’s efforts to strengthen its regulatory bodies to prevent financial crime demonstrate the country’s commitment to combating money laundering and terrorist financing. The new AML/CTF Law and Regulation are expected to improve transparency and accountability in the financial sector, thereby enhancing the overall stability of the economy.