Govt to step up crackdown on financial crime as Malawi loses K240bn in illegal foreign exchange externalisation

State is pursuing 10 cases of money externalization on the courts after the government lost  $394. 60  (about K240 billion) in criminal externalisation in the past three years.

Reserve Bank of Malawi governor Dalitso Kabambe said this has prompted the bank to partner with seven other government agencies to fight the criminals who externalize the money illegally from unsupported  foreign exchange  transactions  remitted without imports being  returned into the country  to various countries.

“The government is doing all it can to stop this but criminals have their own ways of beating the system. That was the problem in the past,” said Kabambe.

He said the coming in of technology is now boosting the fight against illegal externalization of the money.

“For example, MRA (Malawi Revenue Authority) is now using the automated system which help them a lot,” he said.

Other government agencies in the fight against illegal externalization of money include the Malawi Police Service, Office of the Director of Public Prosecutions (DPP), the Anti-Corruption Bureau (ACB), Malawi Revenue Authority (MRA), Immigration Department, National Intelligence Service (NIS), Financial Intelligence Authority (FIA) and the Reserve Bank of Malawi (RBM).

“Under the MOU, the taskforce will ensure that every dollar made from the country’s exports is retained in the country and that every remittance is in respect of payment for bonafide offshore payment,” he said.

Kabambe said under this MOU, eight institutions shall collaborate in intelligence sharing, investigations and prosecution of all financial crimes.

“No case shall be left out. As such, all perpetrators are being duly warned to stop these malpractices lest the long arm of the law will catch up with them and crash them,” he said.

Kabambe said the importance of foreign exchange reserves in any economy cannot be over emphasised adding that foreign exchange reserves play a critical role in satisfying a nation’s strategic imports demand.

Inspector General of Police, Rodney Jose expressed commitment that police will not condone this malpractice and will take action on any person involved be it police officers.

Chief Immigration Officer, Masauko Nedi hailed the MOU saying it would enhance information sharing, investigation and prosecution.

Recently, anti-money laundering expert Jai Banda, who is also a private practice lawyer, called for adequate coordination and intelligence exchange between financial agencies on suspicious transactions.

“Potential investors should be subjected to screening process that they have no criminal history while non-Malawians should be encouraged to invest in Malawi so that money is not taken out,” he said.

Cases of foreign exchange externalisation has been on the rise in the country.