A number of Mozambican banking institutions have received fines of 124.8 million meticals since 2020, due to offences committed in relation to legislation on money laundering and terrorist financing.
“Our assessment shows that, in general, the administrative sanctions applied are sufficiently proportionate and dissuasive, also as a result of the revision of the Law on Credit Institutions and Financial Companies, which further increased the fines,” revealed the report on the National Assessment of Terrorist Financing Risks.
The document drawn up by the government explains that “in aggregate terms between 2020-23, of the on-site inspections carried out in terms of money laundering/terrorist financing, banks were sanctioned with fines totalling 124.8 million meticals, which were published in the media and on the Banco de Moçambique (BdM) website”.
However, the report states that “there is a record of the national financial system being used to transfer funds, in fractions, to the accounts of people with low incomes, based in terrorist threat zones and who may be linked to sympathisers or even terrorists”.
“There are also records of transfers of funds from abroad to regions with an active terrorist threat, followed by cash withdrawals, either in instalments or in full,” he adds.
“The information available also suggests that individuals suspected of involvement in terrorism have used the banking system to make transfers of insignificant amounts and, in the northern province of Cabo Delgado, several international organisations and charities have been found to be active, using the commercial banking sector in their actions to support the victims of terrorism and religious denominations. These activities have seen the movement of large sums of money without proper monitoring of the final beneficiaries, a fact that increases the risk of abuse of the sector, in the sense that the final beneficiaries could be terrorists,” it warns
The document also adds that the fact that the region is rich in mineral and energy resources makes it possible for terrorists to raise money by selling these resources to licensed mining companies operating in the area.
“Due to the informality of the economy, these resources can also be integrated and justified through unregistered commercial activities or the proceeds used to finance terrorists. On the other hand, the financial intermediation activity carried out by commercial banks always opens up space for bad faith individuals to use the sector for criminal actions, despite the controls in place,” he said.
Cabo Delgado province has been facing terrorist attacks for more than six years, which have led to a military response since July 2021, with support from Rwanda and the Southern African Development Community, liberating districts near the gas projects.
After a period of relative stability, new attacks and movements have been recorded in recent weeks, leading foreign entities to restrict travel to that part of the country.
