Anti-Money Laundering and Countering the Financing of Terrorism and Proliferation

Powers of the Banco de Moçambique

The Banco de Moçambique is the supervisory authority of credit institutions, financial companies and the Mozambique Stock Exchange regarding anti-money laundering and counter-terrorism and proliferation financing.

As the regulator, the Banco de Moçambique shall ensure that supervised institutions comply with the legislation on anti-money
laundering/countering the financing of terrorism and proliferation (AML/CFTP), as well as:

  • Adopt the measures required to lay down appropriate criteria to evaluate the suitability and reputation for ownership, control or direct or indirect participation in the board, management, or business of a supervised institution;
  • Regulate and control financial institutions to comply with legally mandated obligations, providing for on-site audits;
  • Issue guidelines or regulatory instruments to promote compliance with obligations under the law by financial institutions;
  • Initiate and document misdemeanor proceedings and, as the case may be, apply sanctions;
  • Cooperate and share information with other competent authorities and assist with investigations;
  • Develop applicable standards or criteria for reporting suspicious transactions;
  • Ensure that financial branches, and their subsidiaries and branches, with mostly foreign capital, adopt and apply measures in compliance with the legislation on anti-money laundering and counter-terrorism financing;
  • Promptly inform the Mozambique Financial Information Office (GIFiM) of any suspicious transactions or facts that may be associated with money laundering or terrorism financing;
  • Promote forthcoming and effective cooperation with relevant authorities, particularly in the exchange of information;
  • Keep statistics concerning measures taken and sanctions imposed regarding violations of legislation on anti-money laundering and counter-terrorism financing.

Key concepts

Crime of money laundering

The crime of money laundering is committed by all who, regardless of the form of participation, having knowledge that the funds, assets, rights, or values are derived from the perpetration of crimes provided for by law:

  • convert, transfer, assist or facilitate any operation of conversion or transfer of goods or products, obtained by them or a third party, directly or indirectly, in order to disguise their illicit origin or to prevent the criminal prosecution or criminal action against the perpetrator or participant of the offense;
  • Conceal or disguise the true nature, origin, location, disposition, movement, or ownership of proceeds of crime or rights relating thereto;
  • acquire, possess or use, having knowledge at the time of acquisition, or at the time of initial possession or use that these assets are derived from any form of participation in the offenses provided for by law.

Crime of terrorism financing

The crime of terrorism financing is committed by anyone who, by any means, direct or indirectly and intentionally collects or provides funds, property, rights or any other advantage so that they will be used or knowing that they will be used, in whole or in part:

  • to carry out a terrorist act;
  • by a terrorist or terrorist organization.

Crime of proliferation financing

The financing of the proliferation of weapons of mass destruction encompasses the direct or indirect provision, acquisition, collection, and retention of funds or assets of any nature, as well as the acquisition of products or rights that could be converted into funds, by any means, with the intention or knowledge that they may be utilized in whole or in part for the financing of the proliferation of weapons of mass destruction.

Duties of credit institutions and financial companies

In light of anti-money laundering and counter-terrorism financing, credit institutions and financial companies shall comply with the following duties:

  • Risk assessment of money laundering financing of terrorism and proliferation of weapons of mass destruction;
  • Customer identification, verification and due diligences, beneficial owners and their representatives, including as politically exposed persons;
  • Refuse to carry out operations when the customer does not provide their identification or the person on whose behalf they act;
  • Safekeeping of supporting documents for identification and transactions carried out;
  • Examine certain transactions that are likely to constitute the crime of money laundering, terrorism financing or proliferation;
  • Report, internally and externally, in writing, the suspicion or knowledge of facts that point to money laundering;
  • Refrain from engagement by prohibiting suspicious operations. In this case, a report should be immediately submitted to the Public Prosecutor's Office and the Mozambique Financial Information Office (GIFiM);
  • Collaborate with the competent authorities by providing the requested information, in compliance with the applicable legislation.
  • Keep matters confidential, for the fact that authorities have been provided with information or that a criminal investigation is underway shall not be revealed to the customer nor to third parties;
  • Train employees to identify operations that may be related to money laundering, financing of terrorism or proliferation of weapons of mass destruction and to comply with other duties concerned in order to prevent such operations.

LIST OF INSTITUTIONS SANCTIONED FOR VIOLATING THE LEGISLATION ON ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING

Fines for violating prudential, foreign exchange and anti-money laundering and counter-terrorism financing rules

Suspicious transaction reporting mechanisms

Suspicious transactions are reported electronically, in compliance with the procedures provided by the GIFiM.

Biannual Risk Reporting regarding Risks of Money Laundering, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction

In order to conduct risk-based supervision of money laundering, terrorism financing and proliferation of weapons of mass destruction, financial institutions shall report to the Banco de Moçambique on a semi-annual basis, by the thirtieth day of the month following the relevant period, namely December 31 and June 30 of each year, information on customer accounts and transactions involving risks of money laundering, terrorism financing and proliferation of weapons of mass destruction, as well as changes to its monitoring and control system for these risks, as provided by Article 113 (1) of the guidelines on Anti-Money Laundering and Countering the Financing of Terrorism and Proliferation of Weapons of Mass Destruction, adopted by Notice No. 5/GBM/2022 of November 17. 

Click here to find the Excel file that concerns the reporting referred to herein.

Events

Sectoral Assessment of Money Laundering, Financing of Terrorism and Proliferation of Weapons of Mass Destruction 

The Banco de Moçambique has initiated the sectoral risk assessment of money laundering, terrorism financing and proliferation of weapons of mass destruction, as provided by Article 58 of Law No. 14/2023, of August 28 – law establishing the legal regime and measures to prevent and combat the use of the financial system and non-financial entities for the purposes of money laundering, terrorist financing and financing of proliferation of weapons of mass destruction, in compliance with the 40 recommendations of the Financial Action Task Force (FATF) and the current regulatory framework.

In this light, between October 30 and November 1, 2023, the Banco de Moçambique met with supervised financial institutions, namely credit institutions, microfinance institutions, exchange offices, payment service providers (funds transfer institutions, payment aggregators, and electronic money institutions), and virtual asset service providers, with the following agenda:

  1. Information on the sectoral risk assessment of money laundering, terrorism financing and proliferation of weapons of mass destruction to be carried out by the Banco de Moçambique;
  2. Clarification of any doubts in completing/responding to the questionnaire to be sent in a timely manner.

Proliferation Financing

The Banco de Moçambique (BM), as the regulator of credit institutions, financial companies and the Mozambique Stock Exchange, shall ensure compliance with the legislation on anti-money laundering, countering the financing of terrorism and proliferation of weapons of mass destruction by the obliged institutions.

Thus, this material aims to improve the understanding by entities, institutions, and individuals on proliferation financing matters, in order to ensure knowledge of the consequences of non-compliance with legal obligations and knowledge of some red flags of sanctions evasion as a way to prevent supervised institutions from being misused for financing of proliferation (FP).

Please send any questions and comments arising from the aforementioned information to: DSP_AML_CFT@bancomoc.mz