– Failings in applying the law constitute the main weakness that keeps Mozambique at high risk of money laundering and financing of terrorism
By Aurélio Muianga
Maputo (MOZ TIMES) – The Financial Action Task Force (FATF) has deemed the reforms undertaken by the Mozambican government as insufficient to correct the strategic defects of the regime against money laundering, the financing of terrorism and the proliferation of weapons. The country thus remains on the FATF list of nations subject to strengthened controls, also known as the grey list.
The decision was taken at the FATF plenary meeting held in Paris on 23-25 October, at which Mozambique was represented by a delegation headed by the Deputy Finance Minister, Carla Alexandra do Rosário.
In a note published on its Internet site, the FATF recommended that Mozambique should continue to work on five specific reforms, namely:
(1) implementing a risk-based supervision plan, including the implementation of remedial actions and effective and proportionate sanctions; (2) increasing financial intelligence sent to authorities; (3) demonstrating LEAs’ capability to effectively investigate a range of money laundering offences using financial intelligence; (4) demonstrating the ability to identify terrorism financing cases; and (5) carrying out a risk assessment for Non-profit organizations in line with the FATF Standards and using it as a basis to develop an outreach plan.
Mozambique entered the grey list in October 2022 and the Government pledged to implement reforms that would remove the country from the list in two years. It set up an Executive Committee to Coordinate Policies to Prevent and Fight Against Money Laundering and Terrorism Financing, formed by various public institutions, with technical and financial support from the European Union and the World Bank.
The FATF plenary recognised that Mozambique has taken measures to improve its regime to fight against money laundering and terrorism financing, including improvements to the supervision of the financial institutions, increasing the resources available to the Financial Intelligence Unit of Mozambique (GIFiM) and training GIFIM staff in the application of specific financial sanctions.
It is not enough to pass laws
Paula Monjane, the Executive Director of the Civil Society Learning and Training Centre (CESC), was involved in working with the Government to remove the country from the grey list, as part of the joint team set up by the Government to assess the risk of terrorism financing and money laundering.
In an interview, she said that Mozambique has managed to implement some recommendations, but still faces challenges, because it is not enough to amend laws and have them in accordance with the requirements of the FATF. It is important that they should be put into practice.
“It is very important to have an effective capacity in the country to control terrorism financing and particularly to control money laundering”, said Monjane. She added that there are still many challenges, particularly linked to the supervisory institutions.
Baltazar Fael, a researcher at the Centre for Public Integrity (CIP), has been undertaking research into money laundering in Mozambique. In an interview, he said that in Mozambique there are no cases of people sentenced for money laundering, although everyone recognises the existence of many such cases.
“The Public Prosecutor’s Office says it has charged cases of money laundering, but no cases have been sentenced”, said Fael, adding that “this is a very serious problem”.
The fact that Mozambique is still on the FATF grey list could have a negative impact on international transactions to and from Mozambique, delaying the period when funds become available in the accounts of beneficiaries. This affects investments, but also the transactions of private individuals.
In the FATF assembly this year, only Senegal was removed from the grey list. In southern Africa, in addition to Mozambique, Angola, South Africa, Namibia, Tanzania and the Democratic Republic of Congo are on the FATF grey list. (AM)
