Mozambique Country Summary

FATF Status

Mozambique is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 February 2025

Since October 2022, when Mozambique made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, Mozambique has taken steps towards improving its AML/CFT regime, including by implementing a risk-based supervision plan along with effective and proportionate sanctions, increasing financial intelligence sent to authorities and demonstrating the ability to identify TF cases. Mozambique should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) carrying out a risk assessment for NPOs in line with the FATF Standards and using it as a basis to develop an outreach plan.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mozambique was undertaken in 2024. According to that Evaluation, Mozambique was deemed Compliant for 5 and Largely Compliant for 8 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption remains a significant issue in Mozambique, particularly highlighted by an alleged cartel's restrictions on agricultural exports, which resulted in substantial financial losses for international companies. Despite efforts to implement anti-corruption reforms and improve the country's standing following the "hidden debts" scandal, challenges persist, including a lack of effective enforcement and widespread corruption within various sectors. The government has made some progress, such as legal reforms and settlements related to past scandals, but the overall governance and corruption indicators continue to deteriorate, impacting the country's economic development and stability.

Mozambique possesses significant economic potential due to its extensive coastline, deep-water ports, and rich natural resources, including coal and natural gas. However, the economy faces challenges such as corruption, high interest rates, and poor infrastructure, which hinder investment and growth. Recent government reforms aim to improve the business environment, but issues like labor laws and an ongoing insurgency in the northern region continue to pose risks to economic stability.

Mozambique presents significant investment potential due to its extensive natural resources, deep-water ports, and agricultural opportunities. However, the investment climate is hindered by challenges such as corruption, high interest rates, inadequate infrastructure, and a workforce lacking advanced skills. Recent government reforms aimed at improving the business environment, including a revised investment law and partnerships with international entities, indicate a commitment to enhancing foreign direct investment.