17 May 2022, Salima

The Financial Intelligence Authority (FIA) has called upon the Anti-Corruption Bureau (ACB) to collaborate with other law enforcement agencies and supervisory authorities in fighting money laundering and terrorist financing in the country.

This call was made by the Acting Director General of the FIA, Vincent Chipeta, when he officially opened a Virtual Currency Investigations Training Workshop for investigators and prosecutors of the ACB organised by the Attorney General Alliance - Africa (AGA-Africa) on 17th May 2022 at Sigelege Beach Resort in Salima.

"The Financial Intelligence Authority is glad that the war against money laundering and other financial crimes is on the right path in the country. This has only been possible with concerted efforts from the private sector through Compliance Officers of the Financial Institutions, the Law Enforcement Agencies (Investigators and Prosecutors), Supervisory Authorities, and the general public. This is very commendable, and I would like to urge each one of us to continue collaborating in combating financial crimes in the country," he said.

Chipeta noted that while there are advantages of new payment methods such as through cryptocurrencies, the payment methods carry with them inherent money laundering and terrorist financing risks hence requiring critical attention from law enforcement agencies.

The Country Representative for AGA-Africa, Gift Calorine Chikwakwa, commended the ACB for working together with AGA-Africa and drawing its staff to horn skills in virtual currencies investigation techniques.

One of the participants for the workshop, Vilera Liwonde - Chief Investigations Officer for the ACB, described the workshop as timely and an eye opener in the sense that investigators will also be targeting virtual asset transactions in combating money laundering and terrorist financing.

The workshop, which drew 36 participants from the ACB, was organised to enable the investigators and prosecutors learn and share knowledge and good practices in conducting virtual currencies investigation through their interaction with the facilitators, namely; David Blake - the General Counsel of AGA-Africa, Kyle George - the First Assistant Attorney General for the State of Nevada, Jean Phillipo-Priminta - the Chief State Advocate at the Malawi Ministry of Justice, Beaunard Grobler - Open Source Information Specialist at the Financial Intelligence Centre of South Africa, Emomotimi Agama - the Managing Director of Nigerian Capital Market Institute, Sydney Gondwe - the Africa Reginal Manager for Crypto Gaming United of Zambia, and Masautso Ebere - Compliance Manager at the Malawi Financial Intelligence Authority.

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29 April 2022, Mangochi

The Financial Intelligence Authority (FIA) and Reserve Bank of Malawi (RBM) are holding a series of meetings with financial institutions (FIs), designated non-financial businesses and professions (DNFBPs), and Law Enforcement Agencies (LEAs) on virtual assets (VAs) and virtual assets service providers (VASPs).

The meetings are aimed at sensitizing the FIs, DNFBPs and LEAs as part of the process to assess money laundering and terrorist financing risks associated with VAs and VASPs in the country.
The meetings for DNFBPs and LEAs were held in Lilongwe and Blantyre on 12th April and 14th April 2022 respectively while the meetings for FIs are being held in Mangochi from 28th to 29th April 2022.

The Director for Compliance and Prevention at the FIA, Anita Mankhambo, has called upon the participants at the meetings held in Mangochi to seriously take part in the exercise as the risk assessment findings will help Government policymakers to determine an appropriate policy position to be taken on VAs and VASPs.

Under Recommendation 15 of the Financial Action Task Force, countries are, among others, required to identify and assess money laundering and terrorist financing risks emerging from virtual asset activities and activities or operations of VASPs.

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9 March 2022, Lilongwe

The Financial Intelligence Authority (FIA) has since July 2021 preserved K41,935,435.22 and motor vehicles belonging to various individuals. The properties, which relate to four cases, were preserved through orders granted by the courts. The FIA made the preservation applications in court after its financial analyses on particular transactions pointed to linkage to financial crimes.
The Preservation Orders obtained in court are as follows:

(a) Financial Intelligence Authority v Gregorio Elias Chiphambo and others obtained in October 2021 involving K9,557,979.15 and motor vehicles (Mazda Bongo minibus, Nissan Tiida Latio, Toyota Toyoace 3 tonner truck, and Volskwagen Polo);

(b) The Financial Intelligence Authority v Chimwemwe Alfred Dokiso Chirwa and others obtained in November 2021 involving K8,675,259.01;

(c) The Financial Intelligence Authority v Muhammed Imran Abdul Rashid and others obtained in December 2021 involving K11,353,516.03; and

(d) The Financial Intelligence Authority v Lefnos Omigo Chigamula obtained in February 2022 involving K12,348,681.

The Preservation Orders were made by the FIA under Section 65 of the Financial Crimes Act which empowers a competent authority to apply to the court for an order prohibiting any person, subject to the conditions and exceptions specified in the order, from dealing in any manner with any realizable or tainted property.

All Preservation Orders obtained in court can be accessed under Publications section of the FIA website.

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27 October 2021, Lilongwe

The Financial Intelligence Authority (FIA) has hailed law enforcement agencies, financial institutions and members of the public for their collaboration in fighting money laundering and other financial crimes in the country.

The remarks were made by the Mrs. Anita Mankhambo, Compliance and Prevention Director for FIA, at a workshop on New Payment Methods taking place from 27th to 28th October at Umodzi Park in Lilongwe.

The workshop is being attended by 50 participants comprising investigators and prosecutors from law enforcement agencies and compliance officers of financial institutions including mobile money operators in the country.

"The Financial Intelligence Authority is glad that over the years people who have engaged in money laundering - whether involving use of New Payment Methods or not - have been identified, investigated, prosecuted and most of them convicted. This is an indication that the war against money laundering and other financial crimes is on the right path in the country. This has only been possible with concerted efforts from the Compliance Officers of the Financial Institutions, the Law Enforcement Agencies (Investigators and Prosecutors) and the general public. This is very commendable, and I would like to urge each one of us to continue collaborating in combating money laundering and other financial crimes in the country," said Mankhambo.

New payment methods in use in Malawi include Internet Banking, Account-to-Account Payments, Mobile Payments, Payment Cards, Prepaid Cards or Credit Cards, and Direct Debit Cards.Mankhambo added that new payment methods have greatly promote financial inclusion in Malawi and across the world and that noted that COVID-19 has further facilitated growth of New Payment Methods such that financial institutions and merchants have promoted measures aimed at reducing face-to-face transactions and contact with payment devices.

"The pandemic necessitated customers to observe social distancing rules and quickly adapt to digital and any contactless payment channel across all the age spectrum. It is not a secret that the new generation likes new technology issues more than the other generations, but COVID-19 has made everyone to start aligning with the new technology especially where payments matters are concerned.

Consequently, the use of the Payment Methods that reduce contact have accelerated in Malawi and around the world from 2019. For instance, in 2019 alone over 50% of all ecommerce transactions in the United Kingdom were completed using a mobile device. In 2020, the average Australian made around 560 electronic transactions, compared with 250 a decade earlier and in the same year 2019 the number of cash transactions per person declined from 320 to about 170, according to published reports. This depicts a major shift towards New Payment Methods across the world. It is therefore an important subject matter to be deliberated on here in Malawi," added Mankhambo.

The workshop has being organised by FIA in conjunction with the Attorney General Alliance Africa (AGA-Africa).
You can get more on this in the Speech posted in the Publications Sections of this website or By Clicking here.. (https://www.fia.gov.mw/publications/Remarks_by_FIA_CAP_Director_on_New_Payment_Methods_Workshop_27-28_October_2021.pdf)

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The Financial Intelligence Authority (FIA) has signed a memorandum of understanding with the Institute of Chartered Accountants in Malawi (ICAM) to facilitate sharing of information between the two organisations. The signing ceremony took place at Sunbird Lilongwe Hotel on 30th December 2020.
The MoU was signed on behalf of the two organisations by Vincent Chipeta, the Acting Director of FIA and Dr. Chinjoka Gondwe, the Chief Executive Officer of ICAM.
"The overarching objective of this MoU is sharing of information. We are very excited as ICAM because this MoU will contribute to the vision of our organisation. As ICAM, we can only investigate our members if we have adequate information. Therefore the FIA will help us with that important information in order to discipline members who are non-compliant. We have a compliance officer in place for purposes of reporting suspicious transactions to FIA," said Dr. Chinjoka Gondwe
On his part, Chipeta noted that the information shared through the MoU would empower the two organisations to contribute to the fight against money laundering, terrorist financing and other financial crimes.
"In the 2019 Mutual Evaluation Report for the country we got a moderate level of effectiveness on supervision of reporting institutions. We want to improve on that. Therefore I want to assure you that the FIA is committed to work closely with ICAM," he said.

Chipeta added that FIA will be eager to assist ICAM in terms programs on continuous professional development of its members on matters of anti-money laundering and other financial crimes.
The FIA started working closely with ICAM in 2013 when the country conducted its first money laundering and terrorist financing nation risk assessment.

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In a bid to capacitate oversight institutions in the country, the Government increased funding to the Financial Intelligence Authority (FIA) and other agencies for their operations in the 2020/2021 financial year. The budget for other recurrent transactions (ORT) for the FIA was revised from a ceiling of K572.7 million to K722.7million representing an increase of K150million.

This followed the commitment by the State President, Dr. Lazarus McCarthy Chakwera, in his speeches delivered on 6th July 2020 and 4th September 2020 on the need to empower oversight institutions for the country to effectively stamp out corruption.

"Before we can begin to rebuild, we must clear the rubble of corruption," the President said on 6th July 2020 during the country's national Independence Day celebrations.

Later in September 2020, Dr. Chakwera said that "as a demonstration of my commitment to ending corruption, we are making the Anti-Corruption Bureau fully independent and resourced to investigate and prosecute financial crimes. Consultations are underway to soon establish the Financial Crimes Division (of the High Court) to fast-track the disposal of corruption cases. We will not tolerate corruption nor will we interfere in the affairs of institutions fighting corruption."

In the 2020-2021 national budget, allocations to the Anti-Corruption Bureau, Director of Public Prosecutions, Fiscal Police and the Financial Intelligence Authority were substantially increased to take care of their financial requirements, according to the Minister of Finance, Honourable Felix Mlusu.

Since July 2020, ORT funding to the FIA has been steady thereby enabling the institution to carry out its investigative, analysis and other operations effectively

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WARNING AGAINST POSSIBLE LAUNDERING OF ILLICIT FUNDS THROUGH
FOREIGN EXCHANGE EXTERNALIZATION

In accordance with its mandate under Section 4 (d) and (h) of the Financial Crimes Act (FCA), the Financial Intelligence Authority (FIA) would like to bring to the attention of the general public and reporting entities recognized in the FCA, its findings on money laundering typologies related to externalization of foreign currency.

In the recent past, the FIA and the Reserve Bank of Malawi conducted transaction analysis on the business accounts maintained by some non-Malawian nationals and this has revealed a syndicate in which huge sums of illicit funds are possibly being laundered using the Malawian banking system under the disguise of import payments being made by what appears to be legitimate businesses. These businesses make huge cash deposits followed by immediate requests for funds transfer to firms in various jurisdictions including China, Dubai, India and Hong Kong. The requests for funds transfers are mostly supported by forged or fake Customs importation documents with the aim of getting around with Exchange Control Regulations. It has, however, also been noted that some are conniving with some officers of financial institutions to remit the funds without any supporting documents which is against Exchange Control Regulations. The perpetrators abandon their accounts with one bank after making several of such transactions and open accounts at other banks using a different business name. The suspects have been moving from one bank to another to find opportunity to remit funds.

Between January and November 2017, the FIA uncovered 63 unsupported forex transactions worth US$7.4 million (approximately K5.4 billion), remitted without imports being returned into Malawi.

In view of the above, the FIA would like to advise as follows:

1. Banks and other deposit-taking institutions should take note of this syndicate and should categorize such customers as high risk and consider terminating such relationship to avoid being used as conduits for money laundering.

2. Banks and other deposit-taking institutions are obligated to report as suspicious such transaction in line with Section 23 of the FCA and should take note of the penalties applicable for failure to report.

3. Employees working in financial institutions are warned that those that aid a customer in such illegal transactions could lead to their being prosecuted for money laundering which carries a maximum prison term of life imprisonment as per Section 42 of the FCA.

4. Reporting institutions should be vigilant regarding funds transfer to jurisdictions with low AML/CFT cooperation.

5. Members of the general public are being warned that being used by unscrupulous businesses to facilitate money laundering will lead them to facing charges under the FCA and other applicable laws. Over and above that, such individuals and businesses risk having their assets seized by law enforcement agencies.

Atuweni Juwayeyi-Agbermodji (Mrs.)

DIRECTOR GENERAL

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A National Identification Document issued by the National Registration Bureau is the official primary identification document for Malawian citizens to be used by financial institutions and designated non-financial businesses and professions in Malawi, according to a Gazette Notice number 67 on Official or Identification Documents Notice issued by the Minister of Finance, Economic Planning and Development, honourable Goodall Gondwe, on 10 August 2018.
This development has come about to enable implementation of customer due diligence (CDD) obligations of financial institutions and designated non-financial businesses and professions provided under Section 16 of the Financial Crimes Act.
Apart from a valid National ID, a Malawi citizen can also present a valid passport issued by the Department of Immigration and Citizenship Services, and biometrics captured by relevant authorities.
For foreign nationals, the requirement is provision of a valid Passport bearing a valid business or residence permit, or valid refugee identity bearing a recognizable photograph and proof of refugee status from competent authorities of a designated refugee camp or valid asylum seeker identity bearing a recognizable photograph and proof of asylum seeker status from competent authorities of a designated asylum camp.
In 2017 Malawi implemented a national identification registration program in which over 9 million people had been registered and issued with National IDs.
Financial institutions in Malawi include banks, insurance firms, money transfer service providers, foreign exchange bureaus, and other institutions regulated under the Financial Services Act. On the other hand, designated non-financial businesses and professions include lawyers, accountants, real estate agents, gaming operators, and dealers in precious stones and metals.
In a related development, the Minister has also issued a Gazette Notice for simplified CDD for customers whose monthly income or monthly withdrawals do not exceed K300,000. Customers under this category are expected to be identified using a valid Driver’s Licence issued by an appropriate authority, a valid Traffic Register Card issued by an appropriate authority, a birth certificate for minors, a valid student identification from a recognized learning institution authenticated by a Commissioner for Oaths, and valid employee identification authenticated by a Commissioner for Oaths.

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