Officials from the Financial Intelligence Authority have revealed that Malawi has lost a staggering K14 billion last year alone through money laundering.
Financial Intelligence Authority director Atuweni Abomeji told the Legal Affairs Committee of parliament that the authority (FIA) has so far recorded 160 cases of money laundering.
“Out of these cases, we have concluded 25 cases,” she said.
She said most of the money laundering cases borders on illegal externalisation of forex.
Abomeji said so far the authority has managed to recover K22.4 million through bank accounts freeze and asset confiscation using the money laundering and fight of terrorism law.
“We are not relenting, we are now working very closely with Malawi Revenue Autority (MRA), Reserve Bank of Malawi and fiscal police to deal with the issue,” she said.
Fiscal agencies in the country are reportedly investigating several companies suspected of illegally externalising billions of kwacha through, among other things, counterfeit invoices.
Local press investigations etablished that the companies—mostly owned by Malawi residents of Asian origin—also use fake Malawi Revenue Authority (MRA) documents and shell firms in the name of importing goods while externalising foreign currency from the country.
President Peter Mutharika said in May 2016 when he opened the Reserve Bank of Malawi Mzuzu’s branch that the fraudulent movement of foreign exchange offshore is aggravating the poverty of Malawians.
“This country is losing a lot of money in forex externalisation. We are losing more money than the aid we need from anywhere. We must hurry to arrest and slay this monster of forex externalisation once and for all,” Mutharika said.
The country’s anti-money laundering expert Jai Banda agreed that misinvoicing leads to illicit financial flows as money which is not supposed to be externalised is smuggled out of the country.
Banda, a lawyer by profession, said the flourish of money laundering in the country is due to stringent foreign exchange control regulations which result in money being exported through the parallel market.
“When this happens it is difficult [for authorities] to determine source of funds hence facilitating money laundering,” he said.
Banda said lack of patriotism and insecurity on the part of individuals who indulge in the illegal practices is another setback in the fight against money laundering.
“On the other hand, some acts are just there to facilitate tax evasion. Illicit financial flows are real in Malawi as they are anywhere else,” he said.
The country’s economy needs to be protected from money laundering “criminals” to uplift Malawi’s socio-economic integrity in the public and private sectors.
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