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Grey List: Mozambique Requests FATF Reevaluation

Grey List: Mozambique Requests FATF Reevaluation

Mozambique has requested the reclassification of an additional 15 recommendations by the FATF in a bid to exit the international “grey list.” This move follows the approval of legislation to combat money laundering and terrorist financing, with hopes for a final decision on another nine recommendations pending the verdict of ESAAMLG.

On the sidelines of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) Ministerial Council expert meetings held in Kasane, Botswana, Aurélio Matável Júnior, the Director-General of the Financial Information Office of Mozambique, stated that there is an expectation for the plenary to approve the reclassification request for these nine recommendations by the International Financial Action Task Force (FATF).

Matável Júnior explained, “This is also a moment for sharing experiences regarding compliance with the action plan to exit the FATF ‘grey list.’ Mozambique is not alone in this; there are other countries in Southern and Eastern Africa on this list. This is an opportunity to exchange experiences and find ways to meet the recommendations.” He noted that these nine reclassified recommendations were originally part of a group of 15 initially presented.

The Kasane meeting aims to discuss and approve the mutual evaluation report and assess the progress made by ESAAMLG member states in implementing the 40 FATF recommendations. Mozambique anticipates the approval and publication of the nine reevaluated recommendations.

Aurélio Matável Júnior believes that with these developments, Mozambique could exit the “grey list” even before the initial deadline of October 2024. He stated, “I certainly believe so. There is a general commitment, both at the government level and among the business community. I can even say that society at large has awakened and realized that illicit activities must be combated.”

Additionally, during this meeting, the Mozambican government requested the first reevaluation of 15 more recommendations as a result of recent legislation passed by parliament to combat money laundering and terrorist financing. This move aims to address the “remaining deficiencies identified in the 2019 mutual evaluation.”

“The approval of these laws already puts us in a compliance situation, in line with FATF rules or principles,” assured Aurélio Matável Júnior, emphasizing that the country has been showing “improvements” in meeting these obligations since the end of last year.

Between April and October of next year, Mozambique will also need to provide “evidence” that the new legislation is being applied in the country.

During the expert meetings in Kasane, Mozambique also presented a study on the typologies of money laundering in the illicit trade of products from animals and wildlife. “It showed how, from poaching and animal killings, people use the proceeds from criminal activity to launder money.”

In August, Mozambique’s Assembly of the Republic unanimously approved legal amendments that strengthen the prevention and combat of money laundering and terrorism. These changes involve revisions to the Law on the Prevention and Combating of Money Laundering and Terrorism Financing, as well as the Law on the Prevention and Combating of Terrorism and Proliferation of Weapons of Mass Destruction.

The amendments introduce simplified measures for the identification and risk verification of money laundering and terrorist financing by both financial and non-financial entities. The changes also introduce specific financial penalties for terrorism.

Highlighting the relevance of these two laws, Minister of Justice, Constitutional, and Religious Affairs Helena Kida noted their importance in removing Mozambique from the FATF “grey list.” The consequences of not meeting FATF standards could include banks reducing or severing relationships with clients residing in high-risk jurisdictions, investors withdrawing from Mozambique, a decrease in payment flows between the country and abroad, and a decline in capital flows.

Helena Kida emphasized that the approval of these laws is part of a two-year “action plan” agreed with FATF for “removing Mozambique from the ‘grey list.’”

Further Africa

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