BCI and Movitel Fined for Violating Anti-Money Laundering and Terrorism Financing Regulations

- A total of nine credit institutions and financial companies have been fined nearly 100 million meticais

- Analyst says violators profit more by breaching financial system regulations

By Aurélio Muianga

Maputo (MOZTIMES) – The Bank of Mozambique (BdM) has imposed fines on seven commercial banks, a foreign exchange bureau, and a mobile wallet operator.

The central bank accused these nine credit institutions and financial companies (ICSF) of violating prudential norms, the regulations against money laundering and terrorism financing, foreign exchange rules, and consumer protection standards for financial products and services.

According to the list published on the Central Bank’s website last Thursday, the Commercial and Investment Bank (BCI) was fined 43.6 million meticais for irregularities, including failing to approve the 2023 annual risk assessment on Money Laundering and Terrorism Financing (ML/TF) and not conducting audits on the prevention and control system to assess how alerts generated by the monitoring system were handled.

The BCI was also fined for failing to respond within the required timeframe to notifications from the Bank of Mozambique related to customer complaints.

The central bank also imposed a fine of 44.9 million meticais on E-Mola, a mobile wallet operator and subsidiary of Movitel, one of the country’s three telecommunications providers. The fine was related to seven violations, including the lack of policies and procedures to address risks related to money laundering and terrorism financing, failure to report cash transactions above specified thresholds, and failure to develop action plans to address customer complaints and meet deadlines for complaint handling.

Moza Banco, First National Bank, Absa Bank Mozambique, Société Générale Mozambique, Ecobank Mozambique, and Letshego Bank were fined between 900,000 and 7 million meticais for lesser infractions.

Multicâmbios received a fine of 1.2 million meticais for failing to register foreign exchange transactions and lacking internal control standards as required by the Bank of Mozambique.

Commenting on the recurring violations by financial operators, Constantino Marrengula, a Public Finance Adviser at the Civil Society Learning and Capacity Building Centre (CESC), pointed to the benefits enjoyed by violators due to inadequate control mechanisms, an inefficient judicial system, and the leniency of fines compared to the potential gains.

Marrengula, who is also an economics lecturer at the Economics Faculty in the Eduardo Mondlane University, noted that financial institutions such as banks are large organisations that “lack perfect control over their employees, who exploit these weaknesses to engage in schemes, earning more money than their wages while causing financial damage to the institutions.”

“They make significant profits beyond the costs incurred by the fines,” said the economist, adding that poor control measures by management and a lack of oversight by institutional owners exacerbate the problem.

Marrengula advocates harsher fines as a measure to curb violations and calls for a comprehensive review of the sanctioning system, coupled with effective judicial processes and the promotion of integrity within institutions. (AM)

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