Parliament passes Financial Crimes Bill
Malawi has technically avoided the negative consequences of using weak laws in dealing with money laundering and terrorist financing offences after Members of Parliament (MPs) disregarded the defined adjournment time to pass Financial Crimes Bill with some amendments.
Some MPs asked for more time to understand contents of the joint legal affairs and budget and finance committees’ report on the bill but interim leader of the House, Kondwani Nankhumwa, pleaded with the legislators to fast-track the process for the sake of the deadline.
Malawi was under Financial Action Task Force (FATF) pressure to pass the bill before February 15 2017 or risk being financially blacklisted on the international scene.
The bill has come to replace the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act of 2006 which has been under scrutiny since 2012.
The bill introduces changes to the legal framework on money laundering and terrorist financing offences as the current framework was found wanting on legal and regulatory framework to implement targeted financial sanctions under the United Nations Security Council Resolutions of dealing with terrorism and terrorist financing.
The FATF, which Malawi is party to, monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures.
FATF also promotes the adoption and implementation of appropriate measures globally and, in collaboration with international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.
Failure to pass the Financial Crimes Bill before the deadline would see countries failing to deal with Malawi in international transactions and financial institutions such as banks in the country would face difficulties in establishing and maintaining correspondent banking relationships and transactions.
In some instances, the institutions would have to go through rigorous scrutiny and delays which would greatly affect trade relations.
Among others, the bill sets stiff punishments of maximum sentence of life imprisonment and up to K500 million fines for money launderers, provides for the establishment of an independent Financial Intelligence Authority, which will have powers to investigate, to replace Financial Intelligence Unit.
The law will also penalise people benefitting from money laundering proceeds, empower the court to confiscate property from money launderers and establish confiscation fund.
Legal Affairs committee chairperson, Maxwell Thyolera described the bill as the best in dealing with money laundering cases in the country.
“Currently, people who were involved in Cashgate are still enjoying the proceeds but with this bill the criminals will not enjoy the proceeds of their money laundering businesses,” Thyolera said.
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