FIA, RBM analysis uncovers illicit funds syndicate

Lilongwe: A joint analysis conducted by the Financial Intelligence Authority (FIA) and the Reserve Bank of Malawi (RBM) has uncovered a syndicate in which large sums of illicit funds are laundered using the Malawian banking system.

A statement released by FIA signed by its Director General, Atuweni-Juwayeyi Agbermodji says the syndicate is done under the disguise of import payments which are being made by what appears to be legitimate business.

After making several transactions, the perpetrators abandon their accounts with one bank and open accounts at other banks using a different business name in order to find opportunity to remit funds.

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, reads the statement in part.

Such requests are mostly supported by forged or fake customs importation documents aimed at getting around with Exchange Control Regulations.

Between January and November 2017, FIA uncovered 63 unsupported forex transactions worth US$7.4 million (approximately K5.4 billion) which were remitted without imports.

Following this revelation FIA is advising banks, other deposit taking institutions, employees working in financial institutions and members of the general public to follow set rules in order to avoid being used as conduits for money laundering.

Individuals, institutions and businesses found to be used by unscrupulous businesses to facilitate money laundering will face charges under the Financial Crimes Act (FCA) and other applicable laws and risk having their businesses seized.

In 2006 under the Money Laundering, Proceeds of Serious Crimes and Terrorist Financing Act Malawi government created the Financial intelligence Unit (FIU) with the mandate to receive, request and analyse suspicious transaction reports from financial institutions.

The FIA was established to effectively prevent, investigate and combat financial related crimes in the country. The law seeking to establish the authority was gazetted on 5th December, 2016.

Source: Malawi News Agency MANA