Opinion 

Author: Samir Zacarias - Researcher

Introduction 

These days, hearing about aspects of the fight against money laundering (ML) in the news is no longer a novelty in Mozambique. On an almost daily basis, we hear speeches from the various state bodies, we learn of judicial operations as well as structural changes (creation or reformulation) in public entities with a view to improving the fight against this type of crime.

Various scholars agree that money laundering is the process by which the perpetrators of criminal activities conceal the origin of ill-gotten goods and income (advantages), transforming the liquidity resulting from these activities into legally reusable capital, by concealing the origin or the true owner of the funds.

Recently at an inauguration of the building where the High Court of Appeal will operate in Beira, in Sofala province, the President of the Republic, Filipe Nyusi, stated that money laundering is a phenomenon with various ramifications that harm the national economy. In order to combat this crime, Mozambique has made significant efforts to align its policies and practices with the international standards set by the Financial Action Task Force (FATF), seeking to strengthen its financial system and prevent it from being used for illicit purposes.

In addition, the actions of the various Public Prosecutor's Offices have proved to be operational, for example, the Central Office for Combating Organized Crime (GCCCOT) and the transnational STOP Money Laundering (STOP BC) operation were launched, which involved raids on homes and the arrest of more than four dozen defendants. The Asset Recovery Office (GRA) repatriated more than 800,000 pounds to Mozambique, as part of the signing of the first agreement to return assets from illegal activities on foreign territory;

These and other examples above show a positive signal in the fight against money laundering. But the question arises: how important is it for Mozambique to send out this positive signal to the world, demonstrating structural changes and the implementation of concrete measures to combat money laundering?

The short answer is simple: by implementing structural changes and concrete measures, or by complying with the recommendations of the Financial Action Task Force (FATF), Mozambique is demonstrating a serious commitment to preventing and combating money laundering and terrorist financing. These measures are essential to strengthen the integrity of the country's financial system and contribute to a more attractive, secure and transparent business environment, which can increase foreign investment and international trade, boosting economic growth and sustainable development.

On the other hand, the application of the measures is important as it contributes to strengthening government institutions and the state's capacity to deal with issues related to financial crime, since compliance with the FATF's recommendations requires the implementation of robust supervision and control measures, which guarantees the continued construction of an efficient state in compliance with its regulations, as well as solidifying a positive international reputation and preventing the existence of illicit activities that could undermine the country's economic stability.

And in the opposite situation, what could happen if Doesn't Mozambique send out this positive signal to the world, demonstrating structural changes and the implementation of concrete measures to combat the Central Bank?

If Mozambique fails to comply with the recommendations of the Financial Action Task Force (FATF), it will face adversity that could significantly damage the country's economy, financial stability and international reputation. Let's see:

1. a)      Restrictions on access to international financial markets: Failure to comply with the FATF recommendations could result in restrictions on Mozambique's access to international financial markets. This could make it difficult to attract foreign investment, finance important projects and carry out commercial transactions with international partners.

1. b)      Negative impact on international reputationNon-compliance with FATF standards can tarnish Mozambique's reputation internationally, leading to a negative perception by foreign investors and financial institutions. This could affect confidence in the country as a safe and transparent business environment, damaging potential economic growth opportunities.

1. c)       Increased risk of illegal activitiesThe lack of effective measures to combat money laundering and terrorist financing could increase the risk of Mozambique being used as a platform for illicit activities. This could attract financial criminals, undermine the country's economic stability and damage the integrity of the financial system.

1. d)      International sanctions and consequencesNon-compliance with FATF recommendations could result in international sanctions and negative consequences for Mozambique. This could include trade restrictions, limitations on access to international funding and damage to the country's relationship with other nations and international organizations.

In view of the seriousness of the adversities mentioned above, it is crucial that the country continues to comply with and strengthen measures to combat money laundering and terrorist financing so that it can continue on the road to development and economic growth in a safe and sustainable environment.