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Billions being lost in illicit deals—FIU

The country’s economy continues being robbed of billions of kwacha due to externalisation of forex and Financial Intelligence Unit (FIU) has since called for proper mechanisms to check the illegal dealings.

According to FIU Director General, Atuweni Juwayeyi Agbermodgi, the situation is getting worse by day adding that if an in-depth investigation was conducted, the figures could be alarming.

Meanwhile, FIU has said one way of dealing with the challenge is to allow financial institutions to have access to Malawi Revenue Authority (MRA) system so as to do away with people falsifying documents.

The FIU boss said this in Lilongwe yesterday after officials from the institution appeared before members of Budget and Finance Committee and Public Accounts Committee (Pac) of Parliament.

She disclosed that a recent investigation her office conducted together with Reserve Bank of Malawi(RBM) involving three commercial banks(names withheld) targeting 22 accounts, revealed that $16 million( nearly K9 billion) was externalised in a space of two years.

“As this is an emerging trend, the FIU is now paying closer attention to transactions that involve externalisation of foreign currency, Further we have requested financial institutions to pay closer attention to transaction involving trade and externalisation of foreign currency. Thirdly, we are coming up with reports on trends on the methods used to commit trade based money laundering and ultimately externalise foreign currency.

“Malawi is a cash economy and as such moving around with high amount of cash is usually not questionable. Financial intuitions also do not have the means to verify Malawi Revenue authority documents that their customers provide when they want to externalise foreign currency particularly for trade purposes. So if financial institutions had access to the MRA system they would be in a position to know whether documents being presented are false or true,” she said.

During the meeting, The FIU boss told the members that the institution has on a number of times assisted MRA with information on tax debtors and that the tax collecting body does not give feedback on how much has been collected

She also asked the members if a law could be put in place empowering FIU so that even the Central Bank should report to FIU on some of its dealings.

In a separate interview, Pac Chairperson Alekeni Menyani said government seem to be dragging its feet to arrest the problem and needs to wake up from its slumber.

“We need to empower agencies or organs of the state like the FIU, enhance level of training, and buy hi-tech equipment for FIU to assist MRA and RBM in tracking people who want to use this country as a base to externalise forex.

A report by Global Financial Integrity (GFI) released last year showed that the country lost over K400 billion in 10 years.

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