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Mozambique Tightens Screws on Terror Financing, Weapons Proliferation

New Guidelines Issued to Combat Money Laundering and Terrorism Financing

Maputo - In an effort to combat money laundering, terrorism financing, and proliferation of weapons of mass destruction, Mozambique’s central bank has initiated a sectoral risk assessment and issued new guidelines for financial institutions.

Freezing Economic Assets and Resources

The Banco de Moçambique (BM) has directed all credit institutions, microfinance institutions, exchange offices, payment service providers, and virtual asset service providers to freeze economic assets and resources within 24 hours upon notice, as provided by Articles 38, 39, and 40 of the Law concerned. This move is aimed at preventing the misuse of financial systems for terrorist financing and weapons proliferation.

Suspicious Transaction Reporting

The BM has emphasized the importance of suspicious transaction reporting mechanisms, requiring institutions to report electronically any transactions that may be linked to money laundering, terrorism financing, or proliferation of weapons of mass destruction.

Biannual Risk Reporting

Financial institutions are required to conduct biannual risk reporting regarding risks of money laundering, terrorism financing, and proliferation of weapons of mass destruction. The reports must be submitted to the BM by December 31 and June 30 of each year, respectively.

Compliance with International Standards

The move comes as part of Mozambique’s efforts to comply with international standards on anti-money laundering and combating the financing of terrorism (AML/CFT). The country has committed to implementing the 40 recommendations of the Financial Action Task Force (FATF) to prevent and combat money laundering, terrorist financing, and proliferation of weapons of mass destruction.

Virtual Meeting Platform

The BM has launched a virtual meeting platform for institutions under its supervision to discuss the preliminary results of the sectoral risk assessment. The regulator has emphasized the importance of knowledge of red flags of sanctions evasion and the consequences of non-compliance with legal obligations to prevent supervised institutions from being misused for financing proliferation.

Strengthening Legal Framework

The recent developments come as Mozambique seeks to strengthen its legal framework for countering and suppressing terrorism and the proliferation of weapons of mass destruction. In March, the country’s parliament passed laws amending the AML/CFT Act and the Terrorism Countering and Suppression Act, among others.

Key Documents

• Law No. 14/2023, of August 28 – AML/CFTP Act
• Law No. 15/2023, of August 28 – Terrorism Countering and Suppression Act
• Notice No. 5/GBM/2022, of November 17 – AML/CFTP guidelines
• FATF Guidance on Counter Proliferation Financing

Queries and Comments

If you have any queries or comments regarding this article, please contact:

Email: DSP_AML_CFT@bancomoc.mz