Parliament to reconvene earlier for Financial Crimes Bill

The 2016-17 Budget Review Meeting of Parliament scheduled for February 6 to March 2 this year has been fast-tracked to enable the House to pass the Financial Crimes Bill before a February 15 deadline or risk being blacklisted on the international financial market.

The Bill aims at repealing the Money Laundering, Proceeds of Serious Crime and Terrorist Financing Act currently being used to prosecute Cashgate cases. It also seeks to create an independent Financial Intelligence Authority to replace the Financial Intelligence Unit.

The Financial Crimes Bill also introduces enhanced penalties for offences such as: money laundering, terrorists financing and financing proliferation of weapons of mass destruction and have a penalty of life imprisonment for a natural person and a fine of K500 million and the revocation of business licence for a legal person.

Malawi is party to the Financial Action Task Force (FATF) recommendations whose fact-finding survey conducted in 2015 established that Malawi had no legal and regulatory framework to implement targeted financial sanction under the United Nations Security Council Resolutions (UNSCRs) on dealing with terrorism and terrorist financing.

The Financial Crimes Bill, tabled last month but referred to the Legal Affairs and Budget and Finance committees of Parliament aims at addressing the shortfalls which the task force outlined before the February 15 deadline.

If the Bill is not passed by the deadline, financial institutions will not be able to transact internationally due to a weak legal and regulatory framework as well as low penalties for money laundering, currently a maximum 10 years imprisonment.

Minister of Finance Goodall Gondwe told Parliament in December about the need to enact the Bill on time, but members of Parliament refused to pass the Bill, saying it was too technical and required further scrutiny.

A source at Parliament has told The Nation that to put in place the necessary preparations to bring together 192 MPs, a tentative date for the mid-year budget review was set for Monday, February 20.

However, yesterday, the National Assembly issued a press release, indicating that Parliament would convene on February 6.

Chairperson of the Legal Affairs Committee, Maxwell Thyolera, confirmed that the Speaker had informed him that the committee would have to finalise their meetings on the Financial Crimes Bill next week and compile a report to be submitted to the House when it reconvenes.

“Next week we will be finalising meeting with stakeholders to scrutinise the Bill. We have been made to understand that if the Financial Crimes Bill is not passed by February 15, Malawi will be blacklisted on financial matters. This means that a lot of banking customers, living within and outside Malawi, would not be able to transact because of non-compliance on money laundering legal framework,” Thyolera said.

If fast-tracked for that purpose, the legislation risks being passed without adequate scrutiny, but Thyolera said the committee appointed by the House would do the required work assisted by a consultant conversant with the legislation.

The Bill was gazetted on December 5 2016 and tabled 10 days later, prompting the members to refer it to the committees.

Thyolera said after the first meeting of the committee on December 17, the members were aware of the implications associated with the Bill.

Next week, the committee has lined up Economics Association of Malawi and Reserve Bank of Malawi to make submissions to the committee on the Bill.

Speaker of the National Assembly Richard Msowoya said the House had a lot of business left to transact during the last meeting, as such, the February 6 meeting was necessary.

“The Financial Crimes Bill was already tabled, what we were waiting for was a detailed examination of the Bill itself by some consultants. Once that [is] done a report [will] be presented to the House,” he said.

Apart from the Financial Crimes Bill, the House is expected to deliberate left-over Bills such as Environment Management, Constitution (Amendment), Constitution (Amendment) (No. 2), Political Parties and Public Procurement and Disposal of Assets.n