Financial Crime World

Title: Malawi Introduces Tougher Measures Against Financial Crimes with New Money Laundering Regulations

Introduction

Malawi’s Ministry of Finance, Economic Planning and Development, led by Honorable Joseph Mwamveka, has published new regulations under the Financial Crimes Act, Cap 7:07, in the Malawi Gazette Supplement No. 7A, dated May 15, 2020. These new Financial Crimes (Money Laundering) Regulations, 2020, aim to strengthen the country’s stance against financial crimes, including money laundering and terrorist financing.

Comprehensive Regulations

The regulations are comprehensive, consisting of nine parts and five schedules. Their primary focus is implementing a risk-based approach to identifying customers, establishing their identities, maintaining records, and reporting suspicious transactions.

Customer Due Diligence Procedures

The regulations outline detailed procedures for handling customer due diligence. This includes identifying a customer’s:

  • Profession
  • Source of funds
  • Source of wealth
  • Expected level of monthly income

Specialized processes are outlined for:

  • Citizens of Malawi
  • Citizens of other countries
  • Politically exposed persons
  • Foreign companies

Verifying Customer Identities

The regulations address measures for verifying the identities of:

  • Malawian citizens and residents
  • Foreign nationals
  • Legal entities
  • Trusts

Electronic Funds Transfers and Large Currency Transactions

There are extensive provisions concerning:

  • Electronic funds transfers
  • Large currency transactions

New Technologies and Cross-Border Declarations

The regulations include provisions for:

  • Handling new technologies
  • Cross-border declarations

Compliance Programs

Financial institutions are required to establish and implement compliance programs. These include:

  • A customer acceptance policy
  • Record-keeping procedures
  • Reporting requirements for suspicious or unusual transactions

Penalties and Reporting to Authorities

The regulations set out penalties for non-compliance and provide for the submission of reports to appropriate authorities.

Conclusion

These new Financial Crimes (Money Laundering) Regulations, 2020, will significantly bolster Malawi’s efforts to combat financial crimes by enhancing the transparency and accountability of financial transactions within the country.