Overview

Supervision of Anti-Money Laundering, Combating Financing of Terrorism (AML/CFT) and Combating Financing of Proliferation in Malawi started after enactment of the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act, 2006. In 2009, the Reserve Bank of Malawi set up a separate division to coordinate supervision of AML/CFT of all financial institutions. Currently, supervision of AML/CFT is governed by the Financial Crimes Act, 2017 which repealed the 2006 Act. The AML legislation conforms to the Financial Action Task Force (FATF) Recommendations on AML/CFT. Failure to comply with FATF Recommendations results into serious sanctions on the country which may affect the financial sector’s ability to transact globally.

In addition, Malawi is also a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a FATF styled regional body. Malawi was assessed through a mutual evaluation on the level of implementation of the FATF Recommendations and effectiveness of measures to combat money laundering and terrorist and proliferation financing in 2008 and 2018.

The first Mutual Evaluation for Malawi was conducted in 2008 by the World Bank under the Financial Sector Assessment Programme (FSAP) and the report was approved by the ESAAMLG Council of Ministers in August 2008. The second round of mutual evaluation was conducted in 2018 and approved by the ESAAMLG Council of Ministers in September 2019.

Malawi conducted a Money Laundering/Terrorist Financing (ML/TF) national risk assessment (NRA) in 2013 and subsequently updated it in 2018. These NRAs were conducted to gain insights into the risks and threats facing the country. They encompassed the analysis of money laundering (ML) threats, the major predicate offenses generating significant criminal proceeds, and the extent of terrorism and terrorist financing (TF) threats confronting the nation. Additionally, the assessments evaluated Malawi's capabilities to combat ML/TF and the vulnerabilities present within its financial sector.