Financial Crime World

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Mozambique’s Financial System Faces Money Laundering and Terrorist Financing Concerns

A new report by the ESAAMLG has raised concerns about Mozambique’s financial system, citing weaknesses in its anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Partial Compliance with International Standards

The report, released in May 2021, found that Mozambique is partially compliant with international standards for AML/CFT. However, the country faces several key deficiencies that need to be addressed to prevent the misuse of its financial system by criminals and terrorists.

Key Recommendations

  • Strengthen Money Laundering Laws and Regulations: The report recommends strengthening money laundering laws and regulations to prevent illegal activities.
  • Improve Customer Due Diligence Measures for Financial Institutions: Improving customer due diligence measures is essential to prevent fraudulent activities.
  • Enhance Supervision and Regulation of Financial Institutions: Enhancing supervision and regulation of financial institutions is critical to ensure compliance with AML/CFT standards.
  • Increase Transparency and Beneficial Ownership Requirements for Legal Persons and Arrangements: Increasing transparency and beneficial ownership requirements can help prevent illegal activities.
  • Improve Cooperation between Law Enforcement Agencies and Financial Intelligence Units: Improving cooperation between law enforcement agencies and financial intelligence units is crucial to combat money laundering and terrorist financing.

Areas of Non-Compliance

The report also highlighted several areas where Mozambique is not fully compliant with international standards, including:

  • Lack of effective mechanisms for freezing and confiscating terrorist assets

Conclusion

Mozambique’s government has been urged to take swift action to address these deficiencies and bring its AML/CFT measures in line with international standards. The country’s financial stability and integrity depend on it.

Key Findings

  • Mozambique is partially compliant with the FATF Recommendations
  • The country faces several key deficiencies in its AML/CFT regime
  • Strengthening money laundering laws and regulations is a priority
  • Improving customer due diligence measures for financial institutions is essential
  • Enhancing supervision and regulation of financial institutions is critical

Recommendations

  1. Strengthen Money Laundering Laws and Regulations
  2. Improve Customer Due Diligence Measures for Financial Institutions
  3. Enhance Supervision and Regulation of Financial Institutions
  4. Increase Transparency and Beneficial Ownership Requirements for Legal Persons and Arrangements
  5. Improve Cooperation between Law Enforcement Agencies and Financial Intelligence Units