FATF status

Mozambique is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 25 October 2024

Since October 2022, when Mozambique made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, Mozambique has taken steps towards improving its AML/CFT regime, including by improving the risk-based supervision of FIs and DNFBPs, increasing the resources available to its FIU, and providing training to the FIU on the implementation of targeted financial sanctions. Mozambique should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) implementing a risk-based supervision plan, including the implementation of remedial actions and effective and proportionate sanctions; (2) increasing financial intelligence sent to authorities; (3) demonstrating LEAs’ capability to effectively investigate a range of ML offences using financial intelligence; (4) demonstrating the ability to identify TF cases; and (5) carrying out a risk assessment for NPOs in line with the FATF Standards and using it as a basis to develop an outreach plan.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Mozambique was undertaken in 2024. According to that Evaluation, Mozambique was deemed Compliant for 5 and Largely Compliant for 8 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

Corruption remains a significant issue in Mozambique, particularly highlighted by the alleged cartel's interference in agricultural exports, which has resulted in substantial financial losses for international companies. Despite efforts to implement anti-corruption reforms and improve the country's anti-money laundering framework, challenges persist, including a corrupt judiciary and inadequate enforcement of existing laws. The government has made some progress in addressing past scandals, such as the hidden debts scandal, but ongoing issues with transparency and accountability continue to hinder effective governance.

Mozambique possesses significant economic potential due to its extensive coastline, deep-water ports, and rich natural resources, including coal and natural gas. However, the country faces substantial challenges such as corruption, high interest rates, poor infrastructure, and an insurgency in the northern Cabo Delgado Province, which hampers investment and economic growth. Recent government reforms aim to improve the business environment, but issues like labor laws and a lack of skilled workers continue to pose obstacles.

Mozambique's investment climate is characterized by significant potential due to its natural resources, deep-water ports, and agricultural opportunities. However, challenges such as corruption, high interest rates, poor infrastructure, and labor laws that complicate hiring practices hinder foreign investment. The government has made efforts to improve the business environment through reforms, including a revised investment law that aims to attract foreign direct investment.