Mozambique will require that companies register their owners, to combat money laundering

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Mozambique will require that companies register their owners, to combat money laundering

8:20 CAT | 20 Feb 2024

FILE - For illustration purposes only. Luís Cezerilo, deputy director general of the Financial Intelligence Office of Mozambique (GIFIM. [File photo: DW]

Mozambique will begin to require that companies declare their owners, through legislation already approved by the government, a step considered essential to remove the country from the international money laundering grey list.

“It now obliges companies to declare their owners, which previously did not happen. In public limited companies (PLCs) the owner did not appear: the owner was anonymous,” the national coordinator for the removal of Mozambique from the FATF gray list, Luís Abel Cezerilo. told Lusa in an interview this Monday.

At issue is a government decree-law authorised by resolution of the National Assembly on December 29, which aligns legal provisions with the Commercial Code and the Legal Regime of the Law combating Money Laundering and Terrorism Financing and Proliferation of Weapons of Mass Destruction, requiring, in practice, the registration of the “beneficial owner” of companies in the tax system.

“The owner could create several companies and never appear. Also, from an accountability perspective, he did not appear. In international monetary transfers by the companies established, he does not appear, and in other illicit or legal acts (…). Now, it will be required that this person is declared,” Cezerilo explained.

If , after the transition period in the application of the new regulations, the owners are not declared,”the responsibility for the acts carried out” becomes the responsibility of all of the management board members”.

“Then, the burden of criminal responsibility is transferred. [Company administrations] will have to make a clear choice between hiding and revealing,” Cezerilo highlighted, noting that the measure also represents a “strengthening of the national financial system against money laundering practices” in Mozambique.

According to Cezerilo, once the legislation is approved, training for law enforcers will immediately begin, followed by actions to raise awareness of good practices among all involved.

On October 22, 2022, Mozambique entered the so-called grey list of the International Financial Action Task Force (FATF), for failing to eliminate deficiencies in the fight against money laundering and terrorist financing.

In the process of leaving the list – a government priority – Mozambique must meet compliance criteria, with the country being evaluated on 40 recommendations, needing more than 20 to be fulfilled or largely fulfilled, as well as in terms of the effectiveness criterion, with the need for 11 immediate results, Cezerilo explained.

“At the moment we have four ‘largely completed’. If we complete this one, we will have five, and for us to leave [the grey list] we need two more,” he added, although without committing to the possibility of achieving this this year.

“What I can say is that all institutions are committed to providing the country with the necessary tools.”

Mozambique has already completed the third assessment in this process, with four of the 11 immediate results already classified as “largely met”, a report that will be ratified at the FATF plenary meeting, in Paris, from 21 to 23 February.

“This fifth [imminent result] will appear in the fourth evaluation report that we will submit on March 23,” Cezerilo added.

Cezerilo also revealed the positive assessment that the FATF made of Mozambique’s first year of its classification among the 17 countries on the grey list.

“After one year, the FATF decided not to apply countermeasures. In other words, it considered Mozambique’s progress to be positive,” said Cezerilo, explaining that, among the criteria for this assessment, are compliance with the recommendations by institutions, as well as the commitment of governments.

Source: Lusa