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Risk Assessment for Financial Institutions in Mozambique Highlights Sectoral Vulnerabilities
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Maputo, Mozambique - A recent risk assessment conducted by Mozambique’s central bank, Banco de Moçambique, has identified significant vulnerabilities in the country’s financial sector. The assessment highlights the need for a risk-based approach to address threats related to money laundering, terrorist financing, and proliferation of weapons of mass destruction.
Crimes Pose High Risks for Mozambique
According to the report, several crimes pose high risks for Mozambique, including:
- Corruption
- Drug trafficking
- Human trafficking
- Wildlife trafficking
- Illegal trading in precious stones and metals
- Tax evasion
In 2020-2021, Mozambique conducted a National Risk Assessment of money laundering and terrorist financing, which identified the financial sector as medium-high risk.
Sectoral Risk Assessment (SRA)
The Banco de Moçambique has launched an SRA to improve awareness and understanding among financial institutions of ML/FTP threats and vulnerabilities. The SRA aims to set priorities for allocating resources and mitigating identified risks.
Methodology
The methodology used in the assessment involves analyzing risk aspects related to:
- Main products and services
- Customers
- Distribution channels
- Geographical location
Ratings will be assigned to a set of factors that determine the robustness of control measures, including:
- Regulatory framework
- Oversight
- Administrative measures
- Criminal sanctions
- Others
Intrinsic Vulnerabilities
The report highlights intrinsic vulnerabilities, such as:
- Cash use in business
- Hardships in learning the source of funds
- Transnational operations
- Business customer anonymity
Recommendations
The Banco de Moçambique has called for collaboration from supervised entities and emphasized that the objective of the assessment is not to sanction specific financial institutions but rather to evaluate the sector as a whole. The report concludes by urging financial institutions to take proactive measures to mitigate identified risks and ensure compliance with anti-money laundering and combating terrorist financing regulations.
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