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Malawi loses over K5 billion to laundering syndicate

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Over US$7.4 million (about K5.4 billion) was last year siphoned out of the country by foreign nationals who are running a money laundering syndicate within the local banking system, Financial Intelligence Authority (FIA) has disclosed.

FIA, which conducted the transaction analysis together with the Reserve Bank of Malawi, says the uncovered laundering is happening under the disguise of import payments being made in what appears to be legitimate businesses.

FIA Director General Atuweni Juwayeyi – Agbermodji said in a statement released Thursday that businesses in the syndicate make huge cash deposits that are followed by immediate requests for funds transfer to firms in various jurisdictions including China, Dubai, India and Hong Kong.

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“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,” Juwayeyi Agbermodji said in the statement.

She said the suspects have been moving from one bank to another for an opportunity to remit funds and between January and November 2017, the FIA uncovered 63 unsupported forex transactions worth US$7.4 million, approximately K5.4 billion, remitted without imports into Malawi.

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In view of the development, FIA has advised banks and other deposit-taking institutions to take such customers as high risk and consider terminating such relationship to avoid being used as conduits for money laundering.

“Banks and other deposit-taking institutions are obligated to report as suspicious such transactions in line with Section 23 of the FCA [Financial Crimes Act] and should take note of the penalties applicable for failure to report.

“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,” she said.

Juwayeyi-Agbermodji advised reporting institutions to be vigilant regarding funds transfer to some countries and members of the general public are warned against conniving with unscrupulous businesses to facilitate money laundering.

The FIA Director General said the individuals and businesses also risk having their assets seized by law enforcement agencies.

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