Parliament passes revision of Law on Prevention and Combat of Money

The Assembly of the Republic this Thursday (10-08) voted in favour, in general and by consensus, on the revised Law on Prevention and Combat of Money Laundering and Financing of Terrorism.The revision aims to adapt and accommodate the recommendations of the Post-Observation Period Report by the International Co-operation Review Group (ICRG) of the Financial Action Task Force (FATF), and conform Mozambican legislation on the regime for preventing and combating money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction.

Natural and legal persons, legal persons without legal personality, non-profit organisations, financial institutions and non-financial entities with headquarters in the national territory are now obliged to adopt measures to prevent and combat money laundering. The measures will now also cover non-financial entities, natural and legal persons engaged in real estate brokerage and the purchase and resale ofproperties, as well as construction entities that directly sell properties. Lawyers and all those who exercise functions of legal sponsorship and legal assistance, notaries, conservatory officials, accountants and independent auditors, when involved in transactions in the interest of their users or in other circumstances, are also covered. Service providers to trust funds and companies now also become non-financial entities obliged to adopt measures to prevent and combat money laundering.

Non-profit organisations, including non-governmental organisations and churches, must now keep records of operations relating to donations and other contributions from national and international entities for a minimum period of five years. According to the amendments voted for favourably in parliament, such records must be sufficiently detailed to allow verification that the funds received by these entities were used in accordance with the purpose of the organisation, which must make these records available to the competent authorities when requested. Another innovation of the law in question is that donations or other financial contributions to non-profit organisations must be made through bank transfer to an account opened in the name of the organisation or by cheque, with the necessary exceptions in the terms to be regulated.

Under to the revised law, engaging in money laundering crimes can engender a fine of up to 10 million meticais. In its reasoning, the government explains that legal persons and equivalent entities will be subject to a fine ranging from two to ten million meticais if the crime is committed within the scope of the activity of a financial institution. According to the same proposal, fines will also range from one million to five million meticais if the crime is committed through the activity of a non-financial entity.