Financial Crimes Act, 2017

This section gives the Act’s short title: it may be cited as the Financial Crimes Act.

This section defines key terms used in the Act.

This section establishes the Financial Intelligence Authority as a public body and gives it corporate powers, while protecting it from outside direction or control in carrying out its functions.

The Authority may request and analyze reports, share findings with law enforcement or a supervisory authority, maintain records, research financial crimes, cooperate with institutions, advise the Minister, provide training, run public awareness, and build internal security systems.

The Authority has power to issue guidance, investigate, inspect records, obtain information, delegate some powers, and impose and enforce administrative sanctions and penalties.

This section sets out how the Director General is appointed, who can confirm the appointment, the term of office, qualification requirements, disqualifications, delegation power, and acting arrangements.

If there is a vacancy for Director General, the Minister must advertise, shortlist and interview candidates, then send a list of two to three candidates to the President; shortlisted candidates must undergo security clearance and vetting, and the President may appoint only from the Minister’s recommended list.

The President may investigate grounds for removing the Director General, can place the Director General on leave or suspend him while an inquiry is pending, and must terminate the appointment if removal is advised and confirmed. The Director General may resign in writing to the Minister at any time.

The Minister must appoint the Deputy Director General after consulting the Director General. The Director General must appoint qualified staff, and the Authority must set role requirements and ensure staff security clearance and vetting.

Certain Authority personnel must not disclose protected information, must take an oath or affirmation before taking office, and the Director General may share information for enquiries in limited cases.

The Authority and specified officials are protected from legal action for acts done in good faith while carrying out powers, duties, or functions under the Act.

The Authority’s funds come from annual appropriations, penalties, fees, and approved grants, gifts, and donations; its financial year matches the Government’s financial year.

The Authority must prepare an annual budget of revenue and expenditure for each new financial year and submit it to the Minister at least three months before that financial year begins.

The Authority must keep proper accounts, prepare an annual report within six months after year-end, lay it before the National Assembly, and submit to audit by the Auditor General. The Auditor General and related staff must not use or disclose information learned in an audit.

The Authority must send an annual report to the Minister by 30 September each year, keep the Minister informed about its work, and the Minister must table a copy of the report in Parliament.

Reporting institutions must identify and verify customers and beneficial owners in specified situations, and may complete verification after starting a business relationship if risk controls are in place.

If a reporting institution uses an intermediary or third party, it keeps responsibility for identification and verification and must get, check, and retain key customer and risk information.

Insurance companies must identify and verify beneficiaries for certain life and investment-related policies, including extra checks for higher-risk legal persons or arrangements.

If identity evidence for a customer is not satisfactory, the reporting institution must not open the account, start business relations, or carry out the transaction, and must report it to the Authority within three days.

Reporting institutions that maintain accounts must keep them in the account holder’s true name and must not open or keep anonymous or false-name accounts.

Reporting institutions must assess money laundering and terrorist financing risks and apply measures that match those risks.

Reporting institutions must keep customer and transaction records, retain them for at least seven years, and provide them on request to specified authorities.

A reporting institution must report suspicious transactions quickly, share the required information with the Authority, and help if the Authority asks for more information.

A person or institution must not disclose that a suspicious transaction report has been or may be made, or related suspicion information, to anyone else.

People must not disclose identifying information linked to suspicious transaction reports, except for specified official enforcement and prosecution purposes.

Certain protected persons cannot face civil, criminal, administrative, or disciplinary proceedings for actions taken under the Act if they acted in good faith or followed the Authority’s directions.

Reporting institutions must appoint a compliance officer and maintain a written compliance management programme, with staff training and an independent audit function.

Licensed financial institutions and money transmission service providers must include originator and beneficiary information in electronic funds transfers, keep required records, review transfers for suspicious activity, and freeze transactions when a confirmed sanctions-list name is found.

Reporting institutions must closely monitor certain transactions and customer relationships, keep due diligence records current, and provide findings to authorities on request.

Financial institutions must carry out due diligence and approval steps for correspondent banking, and they must not deal with shell banks.

Reporting institutions in a group must run group-wide anti-money-laundering programmes, and foreign branches/subsidiaries must follow required controls.

Reporting institutions must comply with this Act even if secrecy or confidentiality rules would otherwise stop disclosure. A court may order a legal practitioner to disclose information for an investigation, but professional privilege can limit that order.

A reporting institution must report certain transactions and related matters to the Authority, keep findings for at least seven years, and respond to Authority requests within set time limits.

The Authority or supervisory authority may impose administrative penalties for contraventions of the Act, except for offences under Part V.

The Authority must make sure reporting institutions comply with the Act, and it may delegate supervisory powers to another body. A supervisory authority or self-regulatory body must consult the Authority before acting against a reporting institution on matters under the Act.

Supervisory authorities must regulate, supervise, and enforce compliance for covered reporting institutions, and they have reporting, review, and enforcement-related powers.

Supervisory authorities or external auditors of a reporting institution must report certain suspicious transactions to the authority within three working days.

Self-regulatory bodies must monitor compliance by designated non-financial businesses and professions, help members prevent offences, and take measures to stop criminals or associates from gaining accreditation, ownership, or management roles.

Self-regulatory bodies must report suspicious transactions to the Authority within three days after forming the suspicion.

Offences under this Part are treated as offences if they are wholly or partly committed in Malawi, or if they are committed by or against a Malawian person.

A person or reporting institution must not make false or misleading statements, or omit information that makes a statement false or misleading, in relation to Part IV and V.

A person who knows or has reason to believe property is proceeds of a predicate offence must not convert, transfer, hide, acquire, possess, use, or help deal with it; doing so is an offence.

It is an offence for any person to provide, receive, or attempt to provide or receive funds intended or known to be used for terrorist activity, including support for a terrorist, a terrorist organization, or training and upkeep.

It is an offence to handle money or other property for the purpose of a terrorist act or for a terrorist or proscribed organization.

If someone is convicted of a financial crime that has no specific penalty under the Act, the court may impose the default penalties in this section.

It is an offence for any person to directly or indirectly finance the proliferation of weapons of mass destruction.

A person must not knowingly, or with reasonable cause to suspect, join or take part in an arrangement that helps keep or control terrorist property; breach is an offence punishable by 15 years’ imprisonment on conviction.

After a conviction, the court must order forfeiture or confiscation of the convicted person’s tainted property, and it may order compensation for the victims.

If property is tainted property connected to an offence for which a person was convicted, the court must order the specified property confiscated.

If a court makes a confiscation order, the property generally vests in the Government, but the Government cannot dispose of or deal with it before the appeal process ends unless the court gives leave.

A court may order a convicted person to pay the Government the value of the benefit from the offence, and it must wait for appeal-related timing rules before making the order.

If a court orders payment under this Part and the amount is not paid, the court may impose default imprisonment, with longer terms for larger amounts, and may order that term to run consecutively to other imprisonment.

If someone has died or absconded in connection with an offence, the court may let confiscation proceedings continue under Part VII.

Proceedings under this Part are civil proceedings, except where the section creates an offence.

People moving currency or bearer negotiable instruments into, out of, or through Malawi must report them, and officers can search, seize, and report suspicious items. False declarations or failures to declare are offences with fines.

An authorized officer may seize and detain currency or bearer negotiable instruments imported into or about to be exported from Malawi if there are reasonable grounds to suspect certain wrongdoing.

Seized currency or bearer negotiable instruments generally cannot be held for more than 14 days unless a court allows continued detention, and they must be released when detention is no longer justified unless forfeiture or related proceedings are pending.

The competent authority must seize cash it reasonably suspects is linked to terrorism, and a judge in chambers may only detain it if the statutory suspicion test is met.

The authority may ask a court for a search warrant to enter and search premises linked to a reporting institution or its employee and remove items found there.

A competent authority may apply to court for orders requiring delivery of property-related documents and transaction information to help determine whether property belongs to or is controlled by a person.

The Authority may ask the court for an order to make a reporting institution and its officers or employees comply with the Act, and the court can impose a financial penalty if the order is not followed.

Reporting institutions must immediately freeze suspected terrorist funds or property and report the matter to the Authority within 24 hours.

A competent authority may ask a judge for a monitoring order, and the judge may issue it only on reasonable suspicion and with an affidavit-backed application. The order can require a reporting institution to disclose account transaction information, cannot be retrospective, and lasts up to three months. Knowingly disobeying the order or giving false or misleading information is an offence.

Reporting institutions subject to a monitoring order must not disclose the order’s existence or operation, except in limited cases, and breaches can be prosecuted.

A competent authority may ask a court for a preservation order over realizable or tainted property, and the court must make the order when the stated grounds are met.

If a court makes a preservation order, the Authority must notify interested persons and publish notice within 21 days. An interested person may also give notice of opposition or seek exclusion of their interest, and some notices must be served on the Director General within 14 days.

A preservation order expires 90 days after notice is published, unless one of four listed exceptions applies.

The competent authority may tell a police officer to seize property covered by a preservation order if it has reasonable grounds to think the property may be disposed of or removed.

A court may order the Registrar of Lands to place a restriction on the land register for immovable property subject to a preservation order, and affected persons may apply to have that order rescinded.

A court may allow reasonable living expenses for a person with an interest in property under a preservation order, and for that person’s immediate family, if the stated conditions are met.

A court may vary or rescind a preservation order on application and must rescind it when the criminal case ends.

If a preservation order is in force, the competent authority may ask a court to forfeit property to Government. The authority must give 14 days’ notice to certain people, and those people may attend the hearing, oppose the order, or ask to exclude or vary their interest.

A person who missed the section 66(3) notice may ask the court for leave to serve it late, but normally only within 14 days of learning of the preservation order.

A court must make a forfeiture order if the property was used or intended for an offence under the Act, or is proceeds of crime.

A person claiming an interest in forfeited property may apply to court for an order about that interest, subject to timing, notice, and eligibility limits.

A court may exclude certain property interests from a forfeiture order if the applicant meets the stated legal and knowledge requirements.

The court may make, withhold, or later change a default forfeiture order if the listed conditions are met.

A person who was entitled to notice of a forfeiture application but did not receive it may ask the court to exclude their interest or vary the forfeiture order within 45 days after publication of notice.

An existing preservation order, seizure order, or other ancillary order stays in force while any appeal against the related forfeiture decision is pending.

After a forfeiture order takes effect, the property is forfeited to Government, vests in the administrator, and the administrator may take possession of it.

The administrator must deposit forfeited money or sale proceeds into the Fund, follow the Authority’s directions, and certain people cannot buy forfeited property at the administrator’s sale.

The court may set aside certain property transfers made after seizure or after a restraining order, subject to stated conditions and a good-faith purchaser exception.

A person with an interest in property may ask the court to protect that interest from confiscation, but must meet timing, notice, and eligibility rules.

If a conviction tied to a confiscation order is quashed, the order is discharged; affected persons may apply in writing for transfer of their interest, and the court must then order transfer or payment depending on whether the interest is in Malawi.

If confiscation of property is not possible, the court may order the convicted person to pay Government an amount equal to the property’s value.

The court must value benefits and property connected with an offence under the Act using the rules in this section.

The court may use a person’s acceptance of allegations about benefit from an offence as conclusive, require the person to say which allegations are accepted, and treat non-compliance as acceptance of most allegations.

The court must assess the amount recoverable under a pecuniary penalty order based on the value of the person’s benefit from the offence, and may or must issue a certificate about realizable amount matters in some cases.

If certain confiscation-related events happen after a pecuniary penalty order, a competent authority may ask the court to increase the order, and the court may vary it if appropriate.

The court may treat property under a person’s effective control as that person’s property and can make orders to help satisfy a pecuniary penalty order.

If a court orders payment under a pecuniary penalty order, it may apply section 52 with modifications to allow imprisonment for non-compliance.

A pecuniary penalty order ends if the related conviction is quashed without replacement, if the order is quashed on appeal, or if the order is paid in full.

A competent authority may search a person, land, premises, or nearby property for tainted property and may seize property found if it reasonably believes it is tainted property.

The competent authority may apply to a magistrate for a search warrant for tainted property, and the magistrate may issue it if the section’s conditions are met.

In an emergency, the competent authority may search and seize property without a warrant or court order if it has reasonable grounds and the situation is urgent.

A competent authority that seizes property must keep it detained and preserve it with reasonable care, and must report monthly to the Authority on the status of all seized property.

A person with an interest in property seized under sections 94 or 95 may ask the court to have it returned, and the court must order return if the listed conditions are met.

If the listed conditions are met, the court must order restitution of restrained property.

The Minister must appoint a suitably qualified administrator by Gazette notice, and the administrator must manage property subject to a preservation order under the court’s or Authority’s directions.

A court may act to realize property after a pecuniary penalty order becomes final and remains undischarged, but it must first give interested persons a reasonable chance to make representations.

Money and property held by an administrator must be paid out to the Registrar or clerk of court and used toward the pecuniary penalty order, with any later surplus distributed as the court directs.

This section gives priority to this Act in certain bankruptcy and winding-up situations, and limits how insolvency powers can be used over property covered by restraining orders or bankrupt property.

After winding-up, reorganization, or receivership begins, the liquidator, administrator, or receiver cannot use their functions over certain protected property, and the court/administrator cannot use powers to block distributions or payment of proper expenses.

A court may order a person to produce specified documents to the competent authority, and the competent authority may inspect, copy, or keep them temporarily.

A document produced under a section 104 order by a person not charged with an offence is generally not admissible against that person in criminal proceedings, except in proceedings under section 106.

A person required to produce a document under a production order must not ignore the order without reasonable cause or submit a document the person knows is false or misleading without telling the competent authority and giving any correct information they have.

A competent authority may apply to court for preservation or restraining orders over realizable property, and restraining-order applications must be in writing, made without telling the other party, and supported by an affidavit.

The court may make a preservation order over property if the statutory conditions are met, and the order can restrict dealings with the property and appoint someone to control it.

The court may require the Attorney General to give undertakings about damages or costs before a restraining order is made, and a person whose property was restrained may still seek damages if Government abuse of process is alleged.

A competent authority must register a restraining order affecting land in Malawi with the appropriate land registry before it takes effect.

Knowingly dealing with property subject to a restraining order is an offence, with imprisonment or fines on conviction; the competent authority and court also have powers to undo the dealing and declare rights.

A preservation order stays in force until it is discharged, revoked, or varied, or until 12 months have passed unless the court sets a later time, or until a confiscation or pecuniary order is made for the property.

A person with an interest in property covered by a preservation order may apply to court, but the application cannot be heard unless at least three clear days’ written notice is given to the competent authority.

The competent authority may ask the court to extend a preservation order, and the court may extend a restraining order for a specified period if certain conditions are met.

The competent authority may enter, search, and seize certain documents on land or premises with the occupier’s consent or under a section 116 warrant.

The competent authority may apply to court for a search warrant for documents or property, and a magistrate or judge may issue it only if the listed conditions are met.

If a foreign State asks for help to find or seize suspected tainted property for an offence within its jurisdiction, sections 104 and 105 apply with necessary modifications.

If a foreign State requests help to locate or seize suspected tainted property for an offence in its jurisdiction, and the Attorney General authorizes assistance under the Mutual Assistance in Criminal Matters Act, section 104 applies as well.

Offences under this Act count as offences for which extradition or rendition may be granted under extradition law.

The Minister may request or provide assistance to or for a foreign State in relation to investigations, prosecutions, or orders/directions under this Act.

For this Part, the principles of mutuality and reciprocity must be recognized at all times.

The Attorney General may ask a foreign authority for assistance in investigations or proceedings under the Act, and foreign requests for that kind of assistance must be made to the Attorney General.

Evidence, documents, or articles obtained under a section 124 request must be accepted in Malawi, must not be used for any other purpose without consent from the relevant foreign authority, and must be returned when no longer needed unless that authority says otherwise.

A request for extradition authorizes entry into, departure from, and presence in Malawi of the person requested, and may authorize custody in transit; the Attorney General may specify the place of detention in Malawi.

If Malawi receives an evidence request from a country, the Attorney General may nominate a Malawian court to receive the evidence, and that court may use its usual powers to secure witnesses, take oaths, and receive evidence. The court must certify or verify the evidence as the Attorney General specifies and send it to the Attorney General for transmission to the requesting country.

The Attorney General may apply to court for a search and seizure warrant when a foreign country requests assistance, and the court may issue it if the stated conditions are met.

The Attorney General may ask the court to register or preserve certain foreign preservation or confiscation orders, and the court must register a qualifying order.

A fund called the Confiscation Fund is established.

The Fund includes confiscated funds and property, property under a preservation order, and any other property lawfully payable to the Fund.

The Fund vests in the Minister, and the Authority must administer it under the Minister’s directions and provide periodic reports when required.

The Fund is established to hold funds and property that are forfeited or confiscated under written law or under a preservation order made under the Act.

The Fund may be used for purposes set out in the Act, including paying the administrator, liquidation or bankruptcy costs, and managing confiscated or preserved property.

The Minister must keep proper accounts for the Fund, the Auditor General must audit the Fund’s accounts, and the Minister must prepare and lay an annual report before the National Assembly.

The Minister may decide how any part of the Fund that is not immediately needed may be invested.

The Fund’s financial year must match the Government’s financial year. For the first financial year, the Minister may set a shorter or longer period, but it cannot be less than 6 months or more than 18 months.

Agreements or arrangements made by the former Financial Intelligence Unit before this Act commenced continue to have effect as if the Act had already been in force.

Assets, rights, obligations, and related documents of the former Financial Intelligence Unit vest in the Authority, with certain agreements treated as if the Authority were a party.

If transferred property, rights, liabilities or obligations must be registered, the Authority must apply in writing for registration, and the registration authority must update the register and related deeds and may issue a certificate of title or amend the register where applicable.

The Authority and other persons have the same rights, powers, and remedies from the appointed date for matters vested in the Authority.

Employees of the Financial Intelligence Unit who were employed immediately before commencement are treated as transferred to the Authority on their former terms, with continuous service. Those transferred cannot claim payments just because of the transfer.

This section repeals the earlier money laundering law, but saves certain past acts, subsidiary legislation, and contracts so they continue with the new Act.

The Minister may publish a national terrorist list, and the Authority must circulate it to reporting institutions.

Part III obligations apply to relevant competent authorities, as applicable and with necessary modifications. The Minister may prescribe those obligations by Gazette regulations.

The Minister may make regulations under the Act, and those regulations may set penalties for contraventions.