|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
Malawi is not a regional financial center. One of the primary
sources of illicit funds is the production and trade of Cannabis
Sativa (Indian hemp) which is extensively cultivated in remote
areas of the country. Anecdotal evidence indicates that Malawi is
a transshipment point for other forms of narcotics trafficking.
Human trafficking, vehicle hijacking, fraud, and corruption are
also areas of concern. Smuggling and the laundering of funds are
exacerbated by porous borders and weak enforcement. The
Government of Malawi (GOM) has adopted anti-money laundering
and counter-terrorist financing legislation; however, the
development of institutional capacity and enforcement
mechanisms is still lacking.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: NO
CRIMININALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: NO
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, microfinance institutions, discount
houses, foreign exchange bureaus, estate agencies, casinos,
accountants, lawyers, dealers in precious metals and stones, and
capital markets
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, microfinance institutions, discount
houses, foreign exchange bureaus, estate agencies, casinos,
accountants, lawyers, dealers in precious metals and stones, and
capital markets
Number of STRs received and time frame: 15 – January through
October 2010
Number of CTRs received and time frame: 509,765 – January
through October 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 0
Convictions: 0
Assets forfeited: criminally: NONE civilly: NONE
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Malawi is a member of the Eastern and Southern Africa Anti-
Money Laundering Group (ESAAMLG), a Financial Action Task
Force (FATF) regional body. Malawi’s most recent mutual
evaluation can be found here: http://www.esaamlg.org/reports/me.
php
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Malawi’s financial intelligence unit (FIU) is set up within the
Reserve Bank of Malawi. However, despite numerous suspicious
transaction reports (STRs) there have been no successful
prosecutions or convictions for money laundering in Malawi.
Now that the Government of Malawi (GOM) has adopted its anti-
money laundering and counter-terrorist financing legislation, it
should work toward full implementation of its laws. A number of
challenges remain. To date, a permanent director has not been
appointed to the FIU; there is no provision in the ML Act for
administrative penalties; investigative agencies do not have
adequate financial and human resource capacity to carry out
effective investigation and successful prosecution of money
laundering cases; and, investigative agencies have also shown
reluctance to seriously tackle the often complex financial cases
referred to them by the FIU. Porous borders and uncharted routes
make it easier for criminals to smuggle goods, people and
currency across to/from Mozambique, Zambia and Tanzania;
Malawi has a cash-based economy and there are usually little or
no paper trails to follow-up during investigations of financial
crimes when transactions have to be reconstructed; and, there is
no regulatory or administrative framework for implementing UN
Security Council Resolutions 1267 and 1373.
A lack of a national identification system makes it difficult for
financial institutions to apply a standard form of identification
under the ML Act. Some financial institutions allow their customers
to be identified using the Malawi Electoral Commission voter
identification certificate. This ID is not reliable, cannot be easily
verified and is not fraud proof. Insurance providers are not
designated as reporting institutions under the money laundering
law.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Malawi is primarily a source country for men, women, and children
subjected to forced labor and sex trafficking. Most Malawian
trafficking victims are exploited within the country, though
Malawian victims of sex and labor trafficking have also been
identified in South Africa, Zambia, Mozambique, Tanzania, and
parts of Europe. To a lesser extent, Malawi is a transit point for
foreign victims and a destination country for men, women, and
children from Zambia, Mozambique, Tanzania, and Zimbabwe.
Within the country, children are subjected to domestic servitude
and other forms of forced labor, including in cattle herding,
agricultural labor, and menial work in small businesses. At local
bars and rest houses, owners coerce girls and women, who work
at the establishments, to have sex with customers in exchange for
room and board. Forced labor is often found on tobacco
plantations. Labor traffickers are often individuals who have
moved to urban areas and subsequently recruit children from
their home villages with offers of good jobs, and later withhold pay
and subject children to sexual and physical abuse. Brothel owners
or other facilitators lure girls from rural areas with promises of nice
clothing and lodging. Upon arrival, the girls are charged high fees
for these items and coerced into prostitution in order to pay off
these debts. South African and Tanzanian long-distance truck
drivers and mini-bus operators transport victims across porous
borders by avoiding immigration checkpoints. Some local
businesswomen who travel regularly to neighboring countries to
buy clothing for import have been identified as traffickers. Reports
of European tourists paying for sex with teenage boys and girls
continue.
The Government of Malawi does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. The government maintained its efforts
to ensure forced labor victims’ access to protective services and it
prosecuted and convicted labor trafficking offenders; however,
adults in forced prostitution or forced labor and children exploited
in domestic service and prostitution still did not receive adequate
attention and the government prosecuted no such offenses
during the reporting period. While one trafficking offender
received a short prison sentence, most convictions resulted in
sentences of fines or out-of-court settlements with compensation
to victims, both of which failed to provide an adequate deterrent.
The government continued to depend heavily on international
organizations and multi-national NGOs for funding most anti-
trafficking programs and took no action to prevent trafficking
during the reporting period.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
No report available
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
Malawi is not a regional financial center. One of the primary
sources of illicit funds is the production and trade of Cannabis
Sativa (Indian hemp) which is extensively cultivated in remote
areas of the country. Anecdotal evidence indicates that Malawi is
a transshipment point for other forms of narcotics trafficking.
Human trafficking, vehicle hijacking, fraud, and corruption are
also areas of concern. Smuggling and the laundering of funds are
exacerbated by porous borders and weak enforcement. The
Government of Malawi (GOM) has adopted anti-money laundering
and counter-terrorist financing legislation; however, the
development of institutional capacity and enforcement
mechanisms is still lacking.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: NO
CRIMININALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: NO
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, microfinance institutions, discount
houses, foreign exchange bureaus, estate agencies, casinos,
accountants, lawyers, dealers in precious metals and stones, and
capital markets
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, microfinance institutions, discount
houses, foreign exchange bureaus, estate agencies, casinos,
accountants, lawyers, dealers in precious metals and stones, and
capital markets
Number of STRs received and time frame: 15 – January through
October 2010
Number of CTRs received and time frame: 509,765 – January
through October 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 0
Convictions: 0
Assets forfeited: criminally: NONE civilly: NONE
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Malawi is a member of the Eastern and Southern Africa Anti-
Money Laundering Group (ESAAMLG), a Financial Action Task
Force (FATF) regional body. Malawi’s most recent mutual
evaluation can be found here: http://www.esaamlg.org/reports/me.
php
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Malawi’s financial intelligence unit (FIU) is set up within the
Reserve Bank of Malawi. However, despite numerous suspicious
transaction reports (STRs) there have been no successful
prosecutions or convictions for money laundering in Malawi.
Now that the Government of Malawi (GOM) has adopted its anti-
money laundering and counter-terrorist financing legislation, it
should work toward full implementation of its laws. A number of
challenges remain. To date, a permanent director has not been
appointed to the FIU; there is no provision in the ML Act for
administrative penalties; investigative agencies do not have
adequate financial and human resource capacity to carry out
effective investigation and successful prosecution of money
laundering cases; and, investigative agencies have also shown
reluctance to seriously tackle the often complex financial cases
referred to them by the FIU. Porous borders and uncharted routes
make it easier for criminals to smuggle goods, people and
currency across to/from Mozambique, Zambia and Tanzania;
Malawi has a cash-based economy and there are usually little or
no paper trails to follow-up during investigations of financial
crimes when transactions have to be reconstructed; and, there is
no regulatory or administrative framework for implementing UN
Security Council Resolutions 1267 and 1373.
A lack of a national identification system makes it difficult for
financial institutions to apply a standard form of identification
under the ML Act. Some financial institutions allow their customers
to be identified using the Malawi Electoral Commission voter
identification certificate. This ID is not reliable, cannot be easily
verified and is not fraud proof. Insurance providers are not
designated as reporting institutions under the money laundering
law.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Malawi is primarily a source country for men, women, and children
subjected to forced labor and sex trafficking. Most Malawian
trafficking victims are exploited within the country, though
Malawian victims of sex and labor trafficking have also been
identified in South Africa, Zambia, Mozambique, Tanzania, and
parts of Europe. To a lesser extent, Malawi is a transit point for
foreign victims and a destination country for men, women, and
children from Zambia, Mozambique, Tanzania, and Zimbabwe.
Within the country, children are subjected to domestic servitude
and other forms of forced labor, including in cattle herding,
agricultural labor, and menial work in small businesses. At local
bars and rest houses, owners coerce girls and women, who work
at the establishments, to have sex with customers in exchange for
room and board. Forced labor is often found on tobacco
plantations. Labor traffickers are often individuals who have
moved to urban areas and subsequently recruit children from
their home villages with offers of good jobs, and later withhold pay
and subject children to sexual and physical abuse. Brothel owners
or other facilitators lure girls from rural areas with promises of nice
clothing and lodging. Upon arrival, the girls are charged high fees
for these items and coerced into prostitution in order to pay off
these debts. South African and Tanzanian long-distance truck
drivers and mini-bus operators transport victims across porous
borders by avoiding immigration checkpoints. Some local
businesswomen who travel regularly to neighboring countries to
buy clothing for import have been identified as traffickers. Reports
of European tourists paying for sex with teenage boys and girls
continue.
The Government of Malawi does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. The government maintained its efforts
to ensure forced labor victims’ access to protective services and it
prosecuted and convicted labor trafficking offenders; however,
adults in forced prostitution or forced labor and children exploited
in domestic service and prostitution still did not receive adequate
attention and the government prosecuted no such offenses
during the reporting period. While one trafficking offender
received a short prison sentence, most convictions resulted in
sentences of fines or out-of-court settlements with compensation
to victims, both of which failed to provide an adequate deterrent.
The government continued to depend heavily on international
organizations and multi-national NGOs for funding most anti-
trafficking programs and took no action to prevent trafficking
during the reporting period.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
No report available
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| MALAWI |
| KnowYourCountry |
|
|
| Last Updated: 16 April 2012 |