Financial Crime World

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Mozambique’s Second Round MER: Strengthening AML/CTF Measures

Mozambique has made significant progress in strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) measures, according to the Financial Action Task Force (FATF). The country’s Second Round Mutual Evaluation Report (MER), published in May 2021, highlights several areas where Mozambique needs to improve.

Reliance on Third Parties

Mozambique should strengthen its reliance on third parties by ensuring that banks and other financial institutions conduct thorough due diligence on correspondent banking relationships. This includes verifying the identity of customers and monitoring transactions for suspicious activity.

  • Verify customer identity
  • Monitor transactions for suspicious activity
  • Conduct thorough due diligence on correspondent banking relationships

Weighting and Conclusion

The FATF recommends that Mozambique give greater attention to the risks associated with correspondent banking relationships and implement measures to mitigate these risks.

Recommendation 18: Internal Controls and Foreign Branches/Subsidiaries

Mozambique should establish internal controls at its foreign branches and subsidiaries to prevent money laundering and terrorist financing. This includes implementing effective AML/CFT programs, conducting regular risk assessments, and providing training to employees.

  • Implement effective AML/CFT programs
  • Conduct regular risk assessments
  • Provide training to employees

Weighting and Conclusion

The FATF recommends that Mozambique implement robust internal controls at its foreign branches and subsidiaries to ensure compliance with AML/CFT requirements.

Recommendation 19: Higher-Risk Countries

Mozambique should identify and assess the risks associated with higher-risk countries, including those with weak AML/CFT frameworks. This includes implementing targeted measures to mitigate these risks and conducting regular risk assessments.

  • Identify and assess risks associated with higher-risk countries
  • Implement targeted measures to mitigate risks
  • Conduct regular risk assessments

Weighting and Conclusion

The FATF recommends that Mozambique take a proactive approach to identifying and mitigating the risks associated with higher-risk countries.

… (and so on)

Recommendation 40: Other Forms of International Cooperation

Mozambique should engage in other forms of international cooperation, including information sharing and mutual legal assistance, to combat money laundering and terrorist financing. This includes participating in regional and international initiatives to combat financial crime.

  • Engage in information sharing
  • Provide mutual legal assistance
  • Participate in regional and international initiatives to combat financial crime

Weighting and Conclusion

The FATF recommends that Mozambique expand its international cooperation efforts to combat money laundering and terrorist financing.

Summary of Technical Compliance: Key Deficiencies

Mozambique has several key deficiencies in its AML/CFT regime, including weaknesses in its customer due diligence requirements, internal controls, and reporting mechanisms. The country should address these deficiencies to improve its overall technical compliance with FATF recommendations.

  • Address weaknesses in customer due diligence requirements
  • Improve internal controls
  • Enhance reporting mechanisms

By implementing these recommendations, Mozambique can strengthen its AML/CFT framework and better combat money laundering and terrorist financing.

Glossary of Acronyms

  • ACB: Anti-Corruption Bureau
  • AFRU: Asset Forfeiture Recovery Unit
  • AGO: Attorney General’s Office
  • … (and so on)