Money Laundering, Proceeds of Serious Crime Terrorist Financing 1
MALAWI GOVERNMENT
Act
No.11 of 2006
I assent
President
.ARRANGEMENT OF SECTIONS
SECTION
PART 1- PRELIMINARY
1. Short title and commencement
2. Interpretation
3. Meaning of charge in relation to a serious crime
4. Meaning of conviction in relation to a serious crime
5. Meaning of quashing of conviction
6. Meaning of value of property, etc.
7. Meaning of dealing with property, etc.
8. Meaning of gift caught by this Act
9. Meaning of deriving a benefit
10. Meaning of benefiting from the proceeds of a serious crime
PART II-ESTABLISHMENT OF FINANCIAL INTELLIGENCE UNIT
11. Financial Intelligent Unit
12. Disclosure to foreign institutions and agencies
13. Appointment and qualifications of the Director of the Financial
Intelligence Unit
14. Appointment and other staff of the Financial Intelligent Unit
15. Removal from office
16. Confidentiality
17. Disclosure of information
18. Accounts of the Financial Intelligence Unit
19. Annual budget of the Financial Intelligence Unit
20. Audit of the Financial Intelligence Unit.
21. Annual report of financial Intelligence Unit
22. Oath of office for officers of the Financial Intelligence Unit
23. Immunity of the Financial Intelligence Unit and officials
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2. Money Laundering, Proceeds of Serious Crime and Terrorist Financing
SECTION
PART III-MONEY LAUNDERING AND TERRORIST FINANCING
24. Financial institutions to verify customers` identity
25. Necessity of identification to conduct business
26. Financial institution to maintain accounts in true name
27. Financial institutions to establish and maintain customers’
records
28. Financial institutions to report suspicious transactions
29. Supervisory authority or auditor to report suspicious
transactions
30. Disclosure of suspicious transaction reports and other
information
31. Protection of identity of persons and information in
suspicious transaction reports
32. Financial institution to establish and maintain internal
reporting procedures
33. Financial institutions and money transmission service
providers to include originator information.
34. Financial institution to monitor transactions.
35. Money laundering offences
36. Terrorist financial offences
37. False or misleading statements
38. Seizure and detention of suspicious imports or exports of
currency.
39. Seizure of currency or negotiable bearer instruments
40. Detection and release of currency or negotiable bearer
instrument seized.
41. Power of the Financial Intelligence Unit to obtain search
warrant.
42. Property tracking and monitoring orders
43. Orders to enforce compliance with obligations under this Act
44. Secrecy obligations overridden
45. Protection of persons reporting suspicious transactions
46. Restitution of restrained property
47. Damages
PART IV-CONFISCATION
Division 1-Confiscation and Pecuniary penalty Orders
48. Application for confiscation order and pecuniary penalty
order
49. Notice of application
50. Amendment of application
51. Procedure on application
52. Procedure for in rem confiscation order where person dies or
absconds
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Money Laundering, Proceeds of Serious Crime and Terrorist Financing 3
SECTION
Division 2-Confiscation
53. Confiscation order on conviction
54. Effect of confiscation order on conviction
55. Voidable transfers
56. Protection of third parties
57. Discharge of confiscation order on appeal and quashing or
conviction
58. Payment instead of a confiscation order
59. Application of procedure for enforcing fines.
60. Confiscation where a person dies or absconds
Division 3- Pecuniary Penalty Orders
61. Pecuniary penalty order on conviction
62. Rules of determining benefit and assessing value
63. Statements relating to benefit from commission of serious
crimes
64. Amount recovered under pecuniary penalty order
65. Variation of pecuniary penalty order
66. Lifting the corporate veil
67. Enforcement of pecuniary penalty order
68. Discharge of pecuniary penalty order
Division 4-Control of Property
69. Powers to search for and seize tainted property
70. Search warrants in relation to tainted property
71. Searching in emergencies
72. Record of property seized
73. Return of seized property
74. Search for and seizure of tainted property in relation to
foreign offences
Division 5-Terrorist Cash and Terrorist Property
75. Seizure and detention of terrorist cash
76. Terrorist funding
77. Dealing in terrorist property
78. Restraining directives in respect of terrorist account or
property.
Division 6-restraing orders
79. Application for restraining order
80. Restraining orders
81. Undertaking by the government
82. Notice of application for restraining order
83. Service of restraining order
84. Registration of restraining order affecting land
85. Contravention of restraining order
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4 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
SECTION
86. Duration of restraining order
87. Review of retraining order
88. Extension of restraining order
Division 7-Realisation of Property
89. Realization of property
90. Application of proceeds of realization and other sums
91. Exercise of powers of public trustee
92. Paramouncy of this Part in bankruptcy or winding up
93. Winding up of company holding realize property
Division 8-Production orders and other Information Gathering
powers
94. Production order
95. Evidential value of information
96. Failure to comply with a production order
97. Production orders in relation to foreign offences
98. Power to search for and seize documents relevant to
locating property
99.Search warrants for location of documents relevant to locating property.
100. Search warrants in relation to foreign offences
Division 9-Mototoring Orders
101. Monitoring orders
102. Monitoring orders not to be disclosed
PART V – MISCELLANEOUS
103. Money laundering and financing of terrorism offences for
extradition purposes
104. Mutual assistance
105. Regulations.
An Act to enable the unlawful proceeds of all serious crime and
terrorist financing to be identified, traced, frozen, seized and
eventually confiscated; to establish a Financial Intelligence Unit
for the better prevention, investigation and prosecution of
money laundering, terrorist financing and other financial
and serious crime, to require financial institutions to take
prudential measure to help combat money laundering and
terrorist financing; and to provide for matters connected with
or incidental to the foregoing
ENACTED by the parliament of Malawi as follows-
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Money Laundering ,Proceeds of Serious Crime and Terrorist Financing 5
PART l – PRELIMINARY
1.-( 1) This Act may be cited as the Money Laundering
Short title and ,
Proceeds of Serious Crime and Terrorist Financial Act, 2006.
commencement
(2) This Act shall come into operation on such date, being a date
not earlier than the date of publication of the Act in the Gazette as
the Minister may appoint by notice published in the Gazette .
2. In this Act, unless the context otherwise requires–
Interpretation
“account” means any facility or arrangement by which a
financial institution does any one or more of the following –
(a)accepts deposit of currency:
(b)allows withdrawals of currency or transfers of currency
Into or out of the account,
(c) pays cheques or payment orders drawn on a financial
institution by, or collects cheques or payment orders on behalf
of, a person;
(d) supplies a facility or arrangement for a safety deposit
box;
“act or terrorism” means-
(a)an act or omission, whether committed in or outside
Malawi, which constitutes an offence within the scope of a
counter-terrorism convention; or
(b)an act, or threat of action in or outside Malawi which –
(i) involves serious bodily harm to a person,;
(ii) involves serious damage to property;
(iii) endangers a person’s life;
(iv)creates a serious risk to the health or safety of the
public or a section of the public;
(v) involves the use of firearms or explosives;
(vi)involves releasing into the environment or any part
therefore or distributing or exposing the public or any part
therefore to any dangerous, hazardous, radioactive or harmful
substance, any toxin chemical; or any microbial or other
biological agent or toxin;
(vii) is designed or intended to disrupt any computer
system or the provision of services directly related to com-
munications infrastructure, banking or financial services,
utilizes, transportation or other essential infrastructure,
(viii) is designed or intended to disrupt the provision of
essential emergency services such as police, civil, defence
or medical services,
(ix) involves prejudice to national security or public
safety;
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(x) involves participating in the activities of a terrorist
group, including the supplying of information or material
resource, or the funding of its activities in any way, with
knowledge of the fact that such participation will contribute
to the criminal activities of the group,
and is intended, or by its nature and context, may reasonably be
regarded as being intended, to intimidate the public or a section
of the public, or compel a government or an international
organization to do, or refrain from doing, an act, or seriously
destabilize or destroy the fundamental political, constitutional,
economic or social structures of a country or an international
organization, and for the purpose of advancing a political,
ideological, or religious cause, but does not include an act which
disrupts any services, and is committed in pursuance of a protest,
demonstration or stoppage of work, as long, and as long only, as
the act is not intended to result in any harm referred in this
paragraph;
“administrator” means a person appointed under section 81(2)
(b) (i) or section 90(2);
“authorized officer” means a person in class of persons
designated as such by the Minister;
“beneficial owner” means a person who ultimately owns or
controls a customer or the person on whose behalf a transaction
is being conducted, and includes any person who exercises
effective control over a legal person or arrangement,
“business relationship” means any arrangement or proposed
arrangement between a person and a financial institution where –
( a) the purpose or effect of the arrangement is to facilitate an
occasional, frequent, habitual or regular course of dealing
between the institution; and
(b)the total amount of any payment to be made by any
person to any other in the course of that arrangement is not
known or capable of being ascertained at the time the arrange-
ment is made;
“collective investment scheme” means a scheme, in whatever
form, in pursuance of which, members of the public are invited
or permitted to invest money or other asserts in a portfolio, and
which scheme has the following characteristics –
(a)two or more investors contribute money or other assets
to hold a participatory interest in a portfolio of the scheme
through share, units or any other form of participatory
interest; and
(b)the investors share the risk and the benefit of investment
in proportion to their participatory interest in a portfolio of a
scheme or any other basis determined in the deed;
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 7
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“competent authority” means the Director of Public
Prosecutions, and includes any person authorized by him in that
behalf;
“counter –terrorism convention” means any of the United
Nations Counter-Terrorism Conventions set out in the First
First
Schedules,
S chedule
“court” means the ordinary courts in Malawi where civil or
criminal proceedings may be instituted;
“currency” means the coin and paper money of Malawi or of a
foreign country that is designated as legal tender and which is
customarily used accepted as medium of exchange in the
country of issue;
“customer,” in relation to a transaction or account, includes-
(a)the person in whose name transaction or account is
arranged, opened or undertaken;
is arranged, opened or undertaken,;
(b) a signatory to a transaction or account,
(c) any person to whom a transaction has been assigned or
transferred;
(d) any person who is authorized to conduct a transaction, or
(e) such other person as the Minister may by Notice
published in the Gazette prescribe,
“defendant” means a person charged with a serious crime,
whether or not he or she has been convicted of the offence, and
includes, in the case of proceedings for a restraining order under
Division 6 of Part IV, a person who is about to be charged with a
serious offence;
“Director” means the Director of the Financial Intelligence
Unit appointed pursuant to section 13;
“document” means any record of information, and includes-
(a)anything on which there is writing,
(b)anything on which there marks, figures, symbols, or
perforations having meaning for persons qualified to interpret
them;
(c) anything from which sounds, images or writing can be
produced, with or without the aid of anything else; and
(d)a map, plan, drawing, photograph or similar thing;
“financial institution” means any person carrying on the
following businesses or activities, including but not limited to a
financial institution licensed under the Banking Act -
Cap 44.01
8 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(a) acceptance of deposits and other repayable funds from
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the public;
(b) lending, including consumer credit, mortgage credit,
factoring (with or without recourse) and financing of
commercial transactions;
(c) financial leasing,
(d)money transmission services;
(e) issuing and administering means of payment, such as
credit cards, traveler`s cheques and banker`s drafts;
(f)guarantee and commitments,
(g)trading for own account or for account of customers in
money market instruments such as cheques, bills, and
certificates of deposit, foreign exchange, financial futures and
options, exchange and interest rate instruments, and transferable securities,
(h)underwriting share issues and participation in such
issues;
(i)advice to undertakings on capital structure, industrial
strategy and related questions, and advice services relating
to mergers and the purchase of undertakings,;
(j) money –broking;
(k) portfolio management and advice;
(l) safekeeping and administration of securities;
(m) safe custody services;
(n) gambling house;
(o) casino and lottery; and
(p) buying or selling of gold bullion;
(q) a trust or company services provider not otherwise
covered by this definition, which as a business, provides any of
the following services to third parties as covered under the
Cap.5.02 Trustee Act
(i)
acting as a formation agent of legal persons;
(ii)
acting as, or arranging for another person to act as,
a director or secretary of a company, a partner of a partner-
ship, or a similar position in relation to other legal persons,
(iii)
providing a registered office, business address or
accommodation, correspondence or administrative address
for a company, a partnership or any other legal person or
arrangement,
(iv)
acting as, or arranging for another person to act as a
trustee of an express trust,
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Money Laundering, Proceeds of Serious Crime Terrorist Financing 9
(v) acting as, or arranging for another person to act as, a
nominee shareholder for another person;
(r) legal practitioners, notaries, other independent legal
professionals and accountants when they prepare for or carry
out transactions for their client concerning the following
activities-
(i) buying and selling of real estate;
(ii) managing of client money, securities or other assets;
(iii) management of bank, savings or securities accounts
(iv) organization of contributions for the creation,
operation or management of companies;
(v) creation, operation or management of legal persons or
arrangements, and buying and selling of business entities.
(s) dealing in real estate, when the person dealing is
involved in transactions for a client concerning the buying and
selling of real estate;
(t) dealing in precious metals stone, when the person
dealing engages in any cash transaction with a customer equal
to or above the applicable designated threshold as the Minister
may prescribe by notice published in the Gazette,
(u) such other business as the minister may prescribe by
notice published in the Gazette;
“Financial Intelligence Unit means the Financial Intelligence
Unit established under section 11;
“confiscation” means the permanent deprivation of property
by order of a court other competent authority;
“gift” includes any transfer of property by a person to another
person directly or indirectly;
(a) after the commission of a serious crime by the first
person;
(b) for a consideration the value of which is significantly
less than the value of the consideration provided by the first
person, and
(c) to the extent of the different between the market value
of the property transferred and the consideration provided by
the transferee,
“interest,” in relation to property, means-
(a) a legal or equitable interest in the property;
(b) a right, power or privilege in connection with the
property;
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10 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
“money laundering “means conduct which constitutes an
offence as described under section 35;
“police officer” means any police officer of or above the rank
of Inspector,
“proceedings means any procedure conducted by or under the
supervision of a judge or judicial officer, however described, in
relation to any alleged or proven offence, or property derived
from such offence, and includes an inquiry, investigation,
preliminary or final determination of facts,
“proceeds of crime” means any property derived or realized
directly or indirectly from a serious crime, and includes, on a
proportional basis, property into which any property derived
or realized directly from the offence was later successively
converted, transformed or intermingled, as well as income,
capital, or other economic gains derived or realized from such
property at any time since the commission of the offence;
“property” means currency and any asset of every kind,
whether corporeal or incorporeal, moveable or immovable,
whether situated in Malawi or elsewhere and whether tangible or
intangible, and includes any legal or equitable interest in any
such property;
“property of, or in the possession or control of any person
include any gift made by that person,
“Public Appointments Committee” means the public
Appointment committee of the National Assembly established
under section 56(7) of the Constitution;
“public official” means person holdings prominent public
positions in Malawi or a foreign country such as heads of state or
government, politicians on the nation level, senior government,
judicial, military or party officials on the national level, or senior
executives of state – owned enterprises of national importance, or
individual or undertakings identified as having close family ties
or person or business connection to the aforementioned
persons,
“realizable property” means –
(a) any property held by a defendant;
(b) any property possessed by a person to whom a
defendant has directly or indirectly made gift caught by this
Act;
“serious crime” means an offence against a provision of-
(a)
any written law in Malawi, for which the maximum
penalty is death or imprisonment for life or other deprivation
of liberty for a period of not less than 12 months, and includes
money laundering and terrorist financing;
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Money Laundering, Proceeds of Serious Crime and Terrorist Financing 11
(b) a law of a foreign state, in elation to acts or omissions
which, had they occurred in Malawi, would have constituted
a offence for which the maximum penalty is death, or
imprisonment for life or other deprivation of liberty for a
period of not less than 1 months, and include money-
laundering and terrorist financing;
“supervisory authority” means the Reserve Bank of Malawi or
any other authority having oversight over a financial institution
or profession;
“tainted property” means-
(a) property intended for use in, or used in or in connection
with the commission of a serious crime; or
(b) proceeds of crime,
“terrorist financing” means directly or indirectly providing or
accumulating funds or other goods, or attempts to do so, with the
intent that the funds be used or knowledge that the funds will be
used in whole or in part to commit-
(a) an act constituting an offence in regard to and in
accordance with the definition of one treaties listed in
the appendix to the international convention for the
suppression of the Financing of Terrorism to which Malawi
is a part, or
(b) any act intended to cause the death of or serious bodily
injury to any civilian or any other person not directly involved
in a situation of armed conflict if, by virtue its nature or
context, such act is intended to intimidate a population or
compel a government or international organization to perform
or refrain from performing an act of any kind;
“terrorist group” means-
(a) an entity that has one of its activities and purposes, the
committing of, or the facilitation of the commission of, a
terrorist act; or ;
(b) any other entity so specified by the Minister by notice
Published in the Gazette;
“terrorist property” means-
(a) proceeds from the commission of a terrorist act;
(b) money or other property which has been, or is likely to
be used to commit a terrorist act; or
(c) money or other property which has been, is being, or is
likely to be used by a terrorist group;
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12 money Laundering, proceeds of Serious Crime and Terrorist Financing
“unit trust” means any arrangement made for the purpose or
having the effect of providing, for a person having funds
available for investment, facilities for the participation by the
person as a beneficiary under a trust, in any profits or income
a rising from the acquisition, holding, management or disposal of
any property pursuant to the trust;
Meaning of
3 . Any reference in this Act to a person being charged or about
charge in
to be charged with a serious crime is reference to procedure,
relation to a
however described, in Malawi or elsewhere by which criminal
serious crime
proceedings may be commenced.
Meaning of
4. For the purposes of the this Act, a person shall be taken to
conviction in
be convicted of a serious crime if
relation to a
serious crime
(a) the person is convicted of the offence;
(b) the person is charged with, and found guilty of, the offence
but is discharged without any conviction being recorded,
(c) a court, with the consent of the convicted person, takes the
offence, of which the person has not been found guilty, into
account in passing sentence on the person for another serious
crime
Meaning of
5 . For the purpose of this Act, a conviction of a person for a
quashing of
serious crime shall be quashed in any case –
conviction
(a) Where section 4 (a) applies, if the finding of guilt is quashed or
set a side,
(b) Where section 4 (b) applies, if the finding of guilt is quashed
or set a side,
(c) Where section 4 (c) applies, if either –
(i) the conviction of the person for the other offence referred
to in that section, is quashed or set a side,
(ii) the decision of a count to take the offence into account in
passing sentence for that other offence is quashed or set a side,
Meaning of
6 .-(1) Subject to subsections (2) and (3), for the purpose of this
value of
Act, the value of property, other than cash, in relation to any person
property, etc
holding the property is –
(a) its market value of the property, or
(b) where any other person holds an interest in the
property, the market value of the beneficial interest of first
mentioned person in the property less the amount required to
discharge any encumbrance, other than a charging order, on that
interest.
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Money Laundering, proceeds of serious crime and terrorist financing13
(2)Subject to section 8(2), reference in this Act to the value, at
any time referred to in subsection (3) as “the material time “of a gift
or of any payment or reward, are reference to-
(a) the value of the gift, payment or reward to the recipient
when he or she received it, adjusted to take account of subsequent
changes in the value of money, or
(b) where subsection (3) applies, the value there in mentioned,
whichever is the greater.
(3)Subject to section 8(2), if at the material time the recipient
holds-
(a) the property which he or she received (not being cash,) or
(b) property which in whole or in part indirectly represents, in
the recipient hands the property while he or she received,
the value referred to in subsection (2) (b)is the value to him or her
at the material time of the property mentioned in subsection (2) (a)
or, as the case may be, subsection 2 (b) so far as it represents the
property which he or she received, but disregarding in either case
any charging order.
7. For purposes of this Act, dealing with property held by any
Meaning of
person includes –
dealing with
property
(a) where the property is a debt owed to the person, making a
payment to any person in reduction or full settlement of the
amount of the debt,
(b) making or receiving a gift of the property, or
(c) removing the property from Malawi.
8.- (1) A gift is caught by this Act if
Meaning of
(a) it was made by the defendant at any time after the
gift caught by
commission of the serious crime, or if more than one, the
this Act
earliest of the serious crime, or if more than one, the
earliest of the offences, to which the proceedings for the time
being relate, and
(b) the court consider it appropriate in all the circumstance to
take the gift into account.
(2) For the purpose of this Act, the circumstance in which the
defendant is to be treated as making a gift include those where the
defendant transfers property to another person, directly or
indirectly, for a consideration, the value of which is significantly
less than the value of the consideration provided by the defendant,
and the provisions of sections 6 (2) and (3) shall apply as if the
defendant had made a gift of such share in the property as bears to
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14 Money Laundering, Proceeds of Serious Crime and Terrorist Financial
the whole property the same proportion as the difference between
the values referred to under this subsection of the consideration
provided by the defendant
Meaning of
derived in
9. A reference to a benefit derived or obtained by or otherwise
benefit
accruing to, a person includes a reference to a benefit derived or
obtained by, or otherwise accruing to ,another person at the request
or direction of the first person.
Meaning of
10. For the purpose of this Act
benefiting
from the
(a) a person has benefited from an offence if the person has at
proceeds of
any time received any payment or other reward in connection
serious crime
with, or derived any pecuniary advantage from, the commission
of a serious crime, whether committed by that person or another
person;
(b) proceeds of crime of a person are any payments or other
awards received by him or her in connection with, and any
pecuniary advantage derived by him or her at the time from, the
commission of a serious crime, and
(c) the value of the proceeds of crime of a person is the
aggregate of the values of the payments, rewards or pecuniary
advantages received by him or her in connection with, or derived
by him or her from, the commission of a serious crime.
PART II – ESTABLISHMENT OF FINANCIAL INTERLLIGENCE UNIT
Financial
11.-( 1) There is hereby established a body to be known as the
Intelligence
Financial Intelligence Unit (in this Act referred to as the “Financial
Unit
Intelligence Unit”) which shall be an autonomous central national
agency, having perpetual succession and a common sea with power
to enter into contracts, responsible for receiving, requesting, analyzing and
disseminating to competent authorities disclosures of financial information as
required under this Act in order to counter money laundering and financing of
terrorism.
(2) The Financial Intelligence Unit –
(a) shall receive, analyze and assess report of suspicious transactions issued
by financial institutions pursuant to section 28,
(b) shall send any report referred to in paragraph (a) to the appropriate law
enforcement authorities and, the supervisory authorities if, on the basis of its
analysis and assessment, the Financial Intelligence Unit has determined that
there is an element of money laundering or financing of terrorism;
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Money Laundering Proceeds of Serious Crime and Financing 15
(c) may enter the premises of any financial institution during ordinary business
hours to inspect any record kept pursuant to section 28, and ask any question
relating to such record, make notes and take copies of whole or any part of the
record,
(d) shall send to the appropriate law enforcement authorities, any information
derived from an inspection carried out pursuant to paragraph (c), if it gives the
Financial Intelligence Unit reasonable grounds to suspect that a transaction
involves proceeds of crime or terrorist financing,
(e) may instruct any financial institution to take such steps as may be
appropriate to facilitate any investigation anticipation by the Financial
Intelligence Unit,
(f) may compile statistics and records, disseminate information within Malawi
or elsewhere, make recommendations arising out of any information received,
issue guidelines to financial institutions and advise the Minister accordingly,
(g) shall create training requirements and provide such training for any
financial institution I respect of transaction record –keeping and reporting
obligations provided for in sections 27 and 28,
(h) may consult with any relevant person, institution or organization for the
purposes of exercising its powers or duties under paragraph (e),(f) or (g),
(i) shall not conduct any investigation into money laundering or terrorist
financing other than for the purpose of ensuring compliance by a financial
institution with the provisions of this Act,
(j) may extend assistance to foreign jurisdictions with respect
to property tracking, monitoring and confiscation orders.
(k)shall have the authority to request information from any financial
institution, any supervisory agency and any law enforcement agency for
purposes of this Act,
(l) may provide training programs for financial institutions in relation to
customer identification, record keeping and reporting obligations and the
identification of suspicious transactions,
(m) may periodically provide feedback to financial institutions and other
relevant agencies regarding outcomes relating to the reports or information
given under the Act,
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16 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
( n) may conduct research into trends and developments in the
area of money laundering and financing of terrorism and
improved ways of detecting, preventing and deterring money
laundering and terrorist financing,
(o) may educate the public and create awareness on matters
relating to money laundering or terrorist financing,
(p) may disclose any report, any information derived from any report or any
other information it receives to an institution or agency of a foreign state or of
an international organization established by the governments of foreign states
that has powers and duties similar to those of the Financial Intelligence Unit as
set out in section 12, if on the basis of its analysis and assessment,
the Financial Intelligence Unit has reasonable grounds to suspect that a report
or information would be relevant to investigating or prosecuting a money
laundering offence or terrorist financing,
(q) pursuant to a memorandum of understanding enter into any agreements or
arrangements with any domestic government institution or agency regarding
the exchange of information,
(r) may require the police and other investigative or prosecutorial bodies to
report progress and outcomes on matters referred to them, and
(s) may perform such other acts as may be necessary to fulfill the objectives of
the Financial Intelligent Unit.
Disclosure to
12. The Financial Intelligence Unit may disclose any report or
foreign
information as set out under section (2) (p) to an institution or
institutions and
agency of a foreign state or of an international organization or body
agencies
or other institution or agency established by the governments of foreign states
that has powers and duties similar to those of the Financial Intelligence Unit –
(a) on such terms and conditions as are set out in the agreement or
arrangement between the Financial Intelligence Unit and that foreign state or
international organization regarding the exchange of such information, or
(b) where such an agreement or arrangement has not been
entered into between Financial Intelligence Unit and that foreign
state or international organization or body, on such terms and conditions as
may be agreed upon by Financial Intelligence Unit and the institution or
agency at the time of disclosure, which terms and conditions shall include the
stipulation that the report or information shall be used for intelligence purposes
only and be treated in a confidential manner and not be further disclosed
without the express consent of the Financial Intelligence Unit.
16
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 17
13.-(1) There shall be Director of the Financial Intelligence
Appointment
Unit (in this Act and otherwise referred to as the “Director”) who shall
and
be appointed for a five year renewable term by the President, upon
qualifications
such terms as may be specified in the instrument of appointment
of Director of the
Financial
Intelligence
(2) The appointment of the Director shall be subject to the
Unit
approval of the Public Appointments Committee.
(3) The Director shall be the chief executive officer of the
Financial Intelligence Unit and shall perform such functions and
duties, and exercise powers, as are conferred upon him or her by
this Act or any other written law.
(4) A person shall not be appointed or remain Director who-
(a)is a member of parliament, or
(b)is a director, officer or servant of, has a controlling
interest in any financial institution.
(5) The Director shall be a person of recognized qualifications,
integrity and experience in financial or legal matters or law
enforcement with financial investigative background.
(6) The Director may at any time by notice in writing to the
Minister resigns his office.
(7) The Director may delegate to any person, subject to any terms
and conditions that the Director may specify, any power, duty or
function conferred on the Director under this Act.
(8) In the event of the absence or incapacity of the Director, or if
the office of Director is vacant, the president may appoint a quail-
fied person to hold officer instead of the Director for a term of not
more than six months, and the person shall, while holding that
office, have all of the powers, duties and functions of the Director
under this Act.
(9) If the President is satisfied that the Director –
(a) is incapacitated by physical or mental illness, or
(b) has become bankrupt or made arrangement with his
creditors, or
(c) is otherwise unable or unfit to discharge the function of
director,
the President may declare the office of the Director vacant and
shall notify the fact in such manner as the President thinks fit, and
thereupon that office shall become vacant.
14.-( 1) The Director may appoint and employ, at such
Appointment
remuneration and subject to such terms and conditions as the
of other staff
Minister may approve, suitably qualified and experienced persons
of the
as officers and employees of the Financial Intelligence Unit, for the
Financial
purpose of ensuring the proper performance of its functions and the
Intelligence
attainment of its objectives.
Unit
17
18 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(2) The other staff of Financial Intelligence Unit shall include
at least one legal practitioner and another person with a sound
financial, economic or accounting training and experience.
Removal from
15. -(1) The President may, subject to the approval of the Public
office
Appointments Committee, remove the Director from office only on the
grounds of misconduct, incapacity or incompetence.
(2) The President may suspend the Director from office,
pending –
(a) the determination of any inquiry as to whether grounds of
misconduct, incapacity or incompetence exist, or
(b) an investigation of alleged violation of section 16.
Confidentia-
16 .-(1) The Director and every staff member of the financial
lity
Intelligent Unit shall –
(a) before they begin to perform any duties under this Act, take
and subscribe before a commissioner of oaths such oath of
Second
Confidentiality in the form set out in the Second Schedule,
Schedule
and
(b) maintain during and after their relationship with the
Financial Intelligent Unit the confidentiality of any matter
relating to the performance of their duties.
(2)Any person who contravenes this section commits an
offence and on conviction, shall be liable to a fine of K100, 000
and to imprisonment for two years.
Disclosure of
17. (1)This section applies to a person while the person is or
Information
after the person ceases to be a Director, officer, employee or agent
of the Financial Intelligence Unit.
(2) Except for the purpose of the performance of his or her duties or the
exercise of his or her functions under this Act or when lawfully required to
in subsection (1) shall not disclose any information or matter which has been
obtained by him or her in the performance of his or her duties or the exercise
of his or her functions under this Act or which he or she has knowledge
except for one or more of the following purpose-
(a) the detection, investigation or prosecution of an unlawful
activity, a money laundering offence or an offence of financing of terrorism,
or
(b) the enforcement of this Act.
(3) The Director, or an officer or employee or agent of the
Financial Intelligence Unit shall not disclose any information that would
directly or indirectly an individual who provided a report or information to the
Financial Intelligence Unit, or a person or an entity about whom a report
information was provided under this Act.
18
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 19
18. -(1) The funds of the Financial Intelligence Unit shall
Accounts of
consist of –
the Financial
Intelligence
Unit
(a) money appropriated annually by parliament for the purpose
of the Financial Intelligence Unit,
(b) any government grants made to it, and
(c) any other money legally acquired by it, provided that the
Financial Intelligence Unit may accept donations only with prior
approval of the Director.
(2) The Financial years of the Financial Intelligence Unit shall be
th
a period of twelve months commencing 1 July and ending 30
st
June the following year.
19 . The Financial Intelligence Unit shall prepare for each new
A nnual
financial year an annual budget of revenue and expenditure which
budget of the
shall be submitted to the Minister at least three months prior to the
Financial
commencement of the financial year.
Intelligenc e
.
Unit
20.-( 1) The Financial Intelligence Unit shall be subject to
Auditor of the
examination and audit by the Auditor –General
Financial.
Intelligence
Unit
(2) The Auditor –General and every person acting on behalf of or
under the direction of the Auditor-General shall not use or disclose
any information relating to the work of the Financial Intelligence
Unit that they have obtained, or to which they have had access, in
the course of an audit.
21. -(1) The Director shall-
annual report
of the
(a) from time to time advise the Minister on the work of the
Financial
Financial Intelligence Unit and in particular on matters that could
Intelligence
affect public policy or the priorities to be set by the Financial
Unit
Intelligence Unit.
(b) prepare and submit to the Minister on or before 31
st
December in each year an annual report reviewing the work of
the Financial Intelligence Unit.
(2)The Minister shall lay or cause to be laid a copy of every
annual report on the table of parliament.
22. -(1) The Director and every officer of the Financial
Oath of office
Intelligence Unit –
for officer of
the Financial
Intelligence
(a) shall, before he or she assumes office, take the oath
Unit
specified in the Second Schedule,
Second
schedule
(b) shall not, except in accordance with this Act or otherwise as
authorized by law –
19
20 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(i)divulge any information obtained in the exercise of a
power or in the performance of a duty under this Act,
(ii)divulge the source of such information or the identify of
any informer or the maker, writer or issuer of a report given to
the Director,
(c) shall maintain and aid in maintaining confidential and secrecy of the matter,
document, report and other information relating to the administration of this
Act that becomes know to him or her or comes in his or her possession or
under his or her control.
(2) Notwithstanding subsection (1), the Director may, for the purpose of an
enquiry into any matter under this Act, impact to an agency in Malawi or abroad,
such information, as may appear to him to be necessary to assist an investigation or
prosecution of money laundering, serious crime or terrorist financing.
(3) Any person who, without lawful excuse contravenes this section commits an
offence and shall, on conviction, be liable to imprisonment for two years and a fine
of K100, 000.
Immunity of
23. No action shall lie against the financial Intelligence Unit,
the Financial
the Director, or officer or employee of the Financial Intelligence
Intelligence
Unit or any person acting under the direction of the Financial
Unit and
Intelligence Unit for anything done in good faith in the administra-
officials
tion or discharge of any powers, duties or functions under this Act.
PART III-MONEY LAUNDERING AND TERORIST FINANCING
Financial
24 .-(1) Every financial institution shall, before entering into a
institutions
business relationship with a customer, ascertain the identity of the
to verify
customer or beneficial owner on the basis of an official or other
customer’s
identifying document, and shall verify the identity of the customer
identity
on the basis of reliable and independent source documents, data or
information or other evidence as is reasonably capable of verifying
the identity of the customer when –
(a) a financial institution –
(i) enters into a continuing business relationship, or
(ii) in the absence of a business relationship, conducts any
transaction,
(b) carrying out an electronic funds transfer,
(c) there is a suspicion of money laundering offence or the
financing of terrorism, or
(d) the financial institution has doubts about the veracity or
adequacy of the customer identification and verification
documentation or information it had previously obtained.
20
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 21
(2)Without
limiting
the
generality
of
subsection
(1),
every
financial institution shall –
(a) When establishing a business relationship, obtain
information on the purpose and
nature of the business relationship,
(b) if the transacting is conducted by a natural person, adequately identify and verify the
identity of the person including information relating to –
(i)
the
name,
address
and
occupation
of
the
person,
(ii)
the
national
identity
card
or
passport
or
the
applicable
official identifying document of the person,
and
take
reasonable
measures
to
establish
the
source
of
wealth
and source of property of the person,
(c) if the transaction is conducted by a legal entity, adequately identify and verify its legal
existence and structure, including information relating to-
(i)
the name, legal form, address and directors of the entity,
(ii)
the principal owners and beneficiaries and control structure of the entity,
(iii)
provision regulating the power to bind the entity, and verify that any person
purporting to act on behalf of the customer is so authorized, and identify those
person,
(d) if the customer is a public official, in addition to the requirements in paragraph(b)-
(i)
have appropriate risk management system to determine whether the customer is
a public official
(ii)
obtain the approval of senior management before establishing a business
relationship with the customer, and
(iii)
conduct regular enhanced monitoring of the business relationship.
(3)Every financial institution shall take reasonable measures to ascertain the purpose of
any transaction in excess of such amount as the Minister may prescribe, from time to
time by notice published in the Gazette , and the origin and ultimate destination of funds
involved in the transaction.
(4) Every financial institution shall, in relation to its cross –border correspondent banking
and other similar relationship,
(a)adequately identify and verify the respondent institution with which it conducts such a
business relationship;
(b) gather sufficient information about the nature of the business of the correspondent
institution,
21
22 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(c) determine from publicly available information the reputation of the person and the
quality
of
supervision
to
which
the
correspondent
institution
is
subject,
(d) assess the anti- money laundering and terrorist financing controls of the correspondent
institution,
(e) obtain approval from senior management before establishing a new correspondent
relationship,
(f) document the responsibilities of the financial institution and
the correspondent
institution,
(5) where the relationship is a payable-through account, a financial institution shall ensure
that the institution with whom it has established the relationship –
(a)has verified the identify of, and performed on –going due diligence on such of, the
customers of the institution that have direct access to accounts of the financial institution,
and
(b) is able le to provide the relevant customer identification data upon request to the
financial institution.
(6) where financial institution relies on an intermediary or third party to undertake its
obligations under subsections (1) or(2) or to introduce business to it, it shall-
(a) immediately obtain the information and documents required by subsections (1)and (2),
(b) ensure that copies of identification data and other relevant documentation relating to
the requirements in subsection(1),(2) and (3)will be made available to the intermediary or
the third party upon request without delay,
(c) satisfy itself that the third party or intermediary is regulated and supervised for, has
measures in place to comply with the requirements set out in section 25, 26 and 27.
(7)Subsection (1),(2) or(3) does not apply –
(a) if the transaction is part of an existing and regular business relationship with person
who has already produced satisfactory evidence of identify, unless the financial institution
has reason to suspect that the transaction is suspicious or unusual,
(b) if the transaction is an occasional transaction not exceeding such amount as the Minister
may prescribe by notice published in the Gazette , unless the financial institution has reason
to suspect the transaction is suspicious or unusual; or
(c)to such other person as the Minister may prescribe by notice published in the Gazette,
(8)The Minister, may by notice published in the Gazette , prescribe-
22
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 23
(a)the official or identifying documents, or the reliable
and independent source documents, data or information or other
evidence that is required for identification or verification of any
particular customer or class of customers,
(b) the threshold for, or the circumstances in which, the
provisions of this section shall apply in relation to any particular
customer or class of customers.
(9) In the case of an existing customer, financial institution
shall verify the identity of the customer within such period as
the Minister may prescribe by notice published in the Gazette.
(10) A person who contravenes this section shall be liable
(a) in the case of a fine natural person, to imprisonment for two
years and to a fine of K100,000,or
(b) in the case of a corporation, to a fine of K500,000 and loss
of business authority.
25.-( 1) If satisfactory evidence of the identity of a customer is
Necessity of
not produced to, or obtained by a financial institution in accordance
identification
with section 24, the financial institution shall report the attempted
to conduct
transaction to the Financial Intelligent Unit and shall not proceed
business
any further with the transaction, unless directed to do so by the
Financial Intelligence Unit.
(2)A person who contravenes this section shall be liable –
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100, 000, or
(b)in the case of a corporation, to a fine of K500,00 and loss
of business authority.
26.-( 1) A financial institution that maintains accounts shall
Financial
maintain them in the true name of the account holder.
institution to
maintain
(2) A financial institution shall not open, operate or maintain any
accounts in
anonymous account or any account which is in a fictitious, false or
true name
incorrect name.
(3) A person who contravenes this section shall be liable –
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100,000,or
(b) in the case of a corporation, to a fine of K500,00 and loss
of business authority.
27.-( 1) Every financial institution shall establish and maintain
Financial
records of -
institutions to
establish and
(a) the identity of a person obtained in accordance with section
maintain
24,
customers
records
23
24 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(b) all transactions carried out by it and correspondence
relating to the transactions as is necessary to enable the
transaction to be readily reconstructed at any time by the
Financial Intelligence Unit or competent authority, and shall
contain particulars as the Minister may prescribe by regulation,
(c) all reports made to the Financial Intelligence Unit under
section 28,and
(d) enquiries relating to money laundering and financing of
terrorism made to it by the Financial Intelligence Unit.
(2)The records mentioned in subsection (1) must be kept for a
minimum period of seven years from the date-
(a) the evidence of a person’s identify was obtained,
(b) of any transaction or correspondence,
(c)the account is closed or business relationship ceases,
whichever is the later.
(3) The records established and maintained for purpose of
subsection (1) shall be –
(a)sufficient to enable the transaction to be readily
reconstructed at any time by the Financial Intelligence Unit
or competent authority to provide, if necessary, evidence for
prosecutions of any offence,
(b) maintained in a manner and form that will enable the
accountable institution to comply immediately with requests
for information from the law enforcement or Financial
Intelligence Unit.
(4) where any record is required to be kept under this Act, a copy
of it, with the appropriate back –up and recovery procedures, shall be
kept in a manner as the Minister may prescribe by regulation.
(5) The records maintained under subsection (1) shall be made
available upon request to the Financial Intelligence Unit, or
competent authority for purpose of ensuring compliance with this
Act and for purpose of an investigation and prosecution of an
offence.
(6) A person who contravenes this section shall be liable –
(a) I the case of a natural person, to imprisonment for two
years and to a fine of K10, 000, and
(b) in the case of a corporation, to a fine of K500,000 and loss
of business authority.
Financial
28. -(1) Whenever a financial institution processes a transaction
institution
exceeding such amount of currency or its equivalent in foreign
to report
currency as the Minister may, from time to time, prescribe by notice
suspicious
published in the Gazette, or suspects or has reasonable grounds to
transactions
24
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 25
suspect that any transaction is related to the commission of a money
laundering offence or terrorist financing, it shall as soon as
possible but not later than three working days after forming that
suspicion and wherever possible before the transaction is carried out-
(a) take reasonable measures to ascertain the purpose of the
transaction,, the origin and ultimate destination of the funds
involved and the identity and address, of any ultimate
beneficiary;
(b) prepare a report of the transaction in accordance with
subsection (2), and communicate the information contained in the
report to the Financial Intelligence Unit in writing or in such
other form as the Director, may from time to time, approve.
(2) A report required under subsection (1) shall-
(a) contain particulars of the matters specified in subsection (1)
(a) and in section 24 (2);
(b) contains a statement of the grounds on which the financial
institution holds the suspicion; and
(c) be signed or otherwise authenticated by the financial
institution.
(3) A financial institution which has reported a suspicious
transaction in accordance with this section shall, if requested to do
so by the Financial Intelligence Unit, give such further information
as it has in relation to the transaction.
(4) If the Financial Intelligence Unit, after consulting a financial
institution required to make a report under subsection (1), has
reasonable grounds to suspect that a transaction or a proposed
transaction may involve an offence of money laundering or
financing of terrorism, it may direct the financial institution in
writing or by telephone to be followed up in writing within one
working day, not to proceed with the carrying out of that transaction
or proposed transaction or any other transaction in respect of the
funds affected by that transaction or proposed transaction for a
period as may be determined by the Financial Intelligence Unit,
which may not be more than five working days, in order to allow the
Financial Intelligence Unit-
(a) to make necessary inquiries concerning the transaction; and
(b) if the Financial Intelligence Unit deems it appropriate, to inform and
advise a competent authority.
(5) A person who contravenes this section shall be liable-
25
26 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(a) in the case of a natural person, to imprisonment for two
years and to a fine of k100,000; or
(b) in the case of a corporation, to a fine of K500,000 and loss
of business authority.
Supervisory
29. - (1) Where the supervisory authority or an auditor of a
authority or
financial institution suspects or has reasonable grounds to suspect
auditor to
that information that it has concerning any transaction or attempted
report
transaction may be-
suspicious
transactions
(a) related to the commission of a money laundering offence or
an offence of financing of terrorism;
(b) of assistance in the enforcement of this Act;
(c) relevant to an act preparatory to the offence of financing of
terrorism,
the supervisory authority or the auditor of the financial institution,
as the case may be, shall forthwith report the transaction or
attempted transaction to the Financial Intelligence Unit.
(2) An auditor who contravenes this section shall be liable –
(a) in the case of a natural person, to imprisonment for one year
and to a fine of K100,000; or
(b)in the case of a corporation, to a fine of K500,000 and loss
of business authority.
Disclosure of
30. -(1) No person or institution shall disclose to any person-
suspicious
(a) that a report to the Financial Intelligence Unit under section
transaction
28 (1) or 29 has been or may be made, or further information has
reports
been given under section 28 (3);
and other
(b) that the financial institution has formed a suspicion in
information
relation to a transaction for purposes of section 28 (1); or
(c) any other information from which the person to whom the
information is disclosed could reasonably be expected to infer
that a suspicion has been formed or that a report has been or may
be made.
(2) A person who contravenes subsection (1) shall be liable-
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100,000; or
(b) in the case of a corporation, to a fine of K500,000 and loss
of business authority.
(3) Any person who-
(a) knows or suspects that a report under section 24 (1) is
being prepared or has been sent to the Financial Intelligence
Unit; and
26
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 27
(b) discloses to another person information or other matter
which is likely to prejudice any investigation of an offence or
possible offence of money laundering under section 35 or
terrorist financing under section 36, commits an offence and
shall be liable on conviction to imprisonment for ten years and
a fine of K10,000,000.
(4) In proceedings for an offence against subsection (3), it is a
defence to prove that the person did not know or have reasonable
grounds to suspect that the disclosure was likely to prejudice any
investigation of an offence or possible offence of money laundering
or terrorist financing.
31.- (1) A person shall not disclose any information that will
Protection of
identify or is likely to identify-
identity of
persons and
(a) any person who has handled a transaction in respect of
information
which a suspicious transaction report has been made
in suspicious
(b) any person who has prepared a suspicious transaction
transaction
Report;
reports
(c) any person who has made a suspicious transaction report;
or
(d) any information contained in a suspicious transaction
report or information provided pursuant to section 28 (3),
except for the following purposes, namely, the investigation or
prosecution of a person or persons for a serious crime, a money
laundering offence or an offence of financing of terrorism; and the
enforcement of this act.
(2) Nothing in this section prohibits the disclosure of any
Information for the purposes of the prosecution of any offence against any
of the provisions of section 29.
(3) A person who contravenes this section shall be liable –
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100,000; or
(b) in the case of a corporation, to a fine of K 500,000 and
loss of business authority.
32. - (1) Every financial institution shall-
Financial
(a) appoint a compliance officer who shall be responsible
institutions to
for ensuring the financial institution’s compliance with the
establish and
requirements of this Act;
maintain
(b) establish a maintain procedures and systems to-
internal
(i) implement the customer identification requirements
reporting
under section 24;
procedures
27
28 Money laundering, Proceeds of Serious Crime and Terrorist Financing
(ii) implement record keeping and retention requirements
Under section 26 and 27;
(iii) implement the reporting requirements under section 28;
(iv) make its officers and employees aware of the laws and
regulations relating to money laundering and financing of
terrorism;
(V) make its officers and employees aware of the procedures,
policies and audit systems adopted by it to deter money laundering
and financing of terrorism;
(vi) screen persons before hiring them as employees;
(c) train its officers and employees and agents to recognize
suspicious transactions, trends in money laundering and
financing of terrorism activities and money laundering and
financing of terrorism risks within the financial institution’s
products, services and operations; and
(d) establish an audit function to test its anti-money
laundering and financing of terrorism procedures and system.
(2) A compliance officer appointed pursuant to this section shall-
(a) be a senior officer with relevant qualifications and
experience to enable him to respond sufficiently well to enquiries
relating to the financial institution and the conduct of its
business;
(b) be responsible for establishing and maintaining such manual
of compliance procedures in relation to its business as the
supervisory authority or the Financing Intelligence Unit may,
from time to time, require;
(c) be responsible for ensuring compliance by staff of the
financial institution with the provisions of this Act and other
law relating to money laundering or financing of terrorism and
the provisions of any manual of compliance procedures
established pursuant to this section; and
(d) act as the liaison between the financial institution and the
Supervisory authority and the Financial Intelligence Unit in matters
relating to compliance with the provisions of this Act and
any other law or directive with respect to money laundering or
financing of terrorism.
(3) Subsection (1) (a) and (d) does not apply to a financial
institution Which, in the course of carrying on its business, does
Not employ more than five persons.
28
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 29
(4) A person who contravenes this section shall be liable –
(a) in the case of a natural person, to imprisonment for two
years and to affine of K100,000.or
(b)in the case of a corporation, to a fine of K500,000 and loss
of business authority.
33.-(1) Every institution or person that is licensed to do
Financial
business in Malawi as a financial institution under the Banking Act
institutions
or a money transmission service provider shall include accurate
and money
originator information and other related messages on electronic
transmission
funds transfers and such information shall remain with the transfer.
services
providers to
include
originator
(2)Subsection (1) shall not apply to –
information
Cap.44.01
(a) an electronic funds transfer, other than a money transfer
effected from the use of a credit or debit card as means of
payments that results from a transaction carried out using a
credit or debit card.
Provided that the credit or debit card number is included in the
information accompanying such a transfer, and
(b) electronic funds transfer and settlements between
financial institutions where the originator and beneficiary of the
funds transfer are acting on their own behalf.
(3) A person who contravenes this section shall be liable –
(a) in the case a natural person, to imprisonment for two
years and to a fine of K100,000,or
(b) in the case of a corporation, to affine of K500.000 and loss
of business authority.
34. -(1) Every financial institution shall pay special attention
Financial
to-
institution to
monitor
(a)any complex, unusual or large transactions that have no
transactions
apparent or visible economic or lawful purpose,
(b) business relations and transactions with persons in
jurisdiction that do not have adequate systems in place to
prevent or deter money laundering or terrorist financing,
(c) electronic fund transfers that do not contain complete
originator information.
(2) In relation to subsection (1), every financial institution
shall –
(a) verify the background and purpose of the transactions or
business relations and record its findings in writing, and
(b) upon request, shall make available such findings to the
Financial Intelligence Unit or to the supervisory authority.
29
30 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(3) Every financial institution shall monitor its business
relationship and the transactions undertaken throughout the course
of the relationship to ensure that its obligations under section 24 are
met, and that the transactions conducted are consistent with the
information that the financial institution has of its customer and the
profile of the business of the customer.
(4) A person who contravenes this section commits an offence
and shall, on conviction, be liable-
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100,000, or
(b) in the to case of the a corporation to affine of K500,000 and loss
of business authority.
Money
35. -(1) A person commits the offence of money laundering if
laundering
the person knowing or having reasonable grounds to believe that
offences
any property in whole or in the part directly represents any
persons proceeds of crime –
(a) converts or transfers property knowing or having reason to
believe that property is the proceeds of crime, with the aim of
concealing or disguising he illicit origin of that property, or of
aiding any person involved in the commission of the offence to
evade the legal consequences thereof,
(b) conceals or disguises the true nature, origin, location,
disposition, movement or ownership of that property knowing or
having reason to believe that the property is the proceeds of crime,
(c) acquires, possesses or uses that property, knowing or
having reason to believe that it is derived, directly or
indirectly, from proceeds of crime,
(d) Participates in, associate with or conspires to commit,
attempts to commit and aids, abets and facilities the commission
of any or omission referred to in paragraph (a), (b) or (c) .
(2) For purpose of proving of the money laundering offence
under
subsection (1), it is not necessary that the serious crime be committed.
(3) A person who contravenes this section commits an offence
and shall, on conviction, be liable –
(a) in the case of a natural person, to imprisonment for ten
years and, to affine of K2.000.000,and
(b)in the case of a corporation, a fine of K10,00,000 and loss
of business authority.
Terrorist
36. -(1) Every person who, by any means whatever, engages
financing
in terrorist financing activities, commits an offence.
offences
(2)Every person who –
(a) organizes or directs others to commit, or
30
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 31
(b) attempts to commit; or
(c) conspires to commit; or
(d) participates as an accomplice to a person committing, or
attempting to commit an offence under subsection (1), commits
an offence.
(3) Any person who commits an offence under this section shall,
on conviction, be liable-
(a) in the case of a natural person, to imprisonment for fifteen
years and to a fine of K3,000,000 or
(b) in the case of a corporation, to a fine of K15,000,000 and
loss of business authority.
37. A person who in making a report under section 24, 25, 29
False or
or 34 makes any statement that the person knows is false or
misleading
misleading in a material particular or omits from any statement
statements
any matter or thing without which the person knows that the
statement is false or misleading in a material particular commits
an offence and shall be liable on conviction-
(a) in the case of a natural person, to imprisonment for two
years and to a fine of K100,000; or
(b) in the case of a corporation, to a fine of K500,000; and
loss of business authority.
38. -(1) Any person who leaves or arrives in Malawi with more
Seizure and
than an amount in currency or negotiable bearer instruments as
detention of
may be prescribed by the Ministry by notice published in the
suspicious
Gazette, on his or her person or in his or her luggage shall report
imports or
the fact to an authorized officer at the port of his or her departure
exports of
or arrival, as the case may be; and the authorized officer shall
currency
without delay send a copy of the currency report to the Financial
Intelligence Unit.
(2) Any person who contravenes subsection (1) is guilty of an
offence and shall, on conviction, be liable-
(a) in the case of a natural person, to a fine of K50,000 or
imprisonment for six months; or
(b) in the case of a corporation, to a fine of K100,000.
(3) Where a person is about to leave Malawi or has arrived in
Malawi, or is about to board or leave, or has boarded or left, any
ship or aircraft, an authorized officer may, with such assistance
as is reasonable and necessary, and with use of force as is necessary-
(a) examine any article which a person has with him or her or
in his or her luggage, and
(b) if the authorized officer has reasonable grounds to suspect
that an offence under subsection (1) may have been or is being
committed, search the person,
31
32 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
for the purpose of determining whether the person has in his or her
possession, any currency or negotiable bearer instruments in respect
of which a report under subsection (1) is required; and an authorized
officer, and any person assisting such officer, may stop, board and
search any ship, aircraft or conveyance for the purposes of exercising
the powers conferred by this subsection.
(4) Where an authorized officer has reasonable grounds to believe
that currency or negotiable bearer instruments found in the course of
an examination or search, conducted under subsection (3) may afford
evidence as to the commission of an offence under this section, a
serious crime, a money laundering offence or an offence of financing
of terrorism, the officer may seize the currency or negotiable bearer
instruments.
(5) An authorized officer who has seized currency and negotiable
Bearer instruments under subsection (4) shall report such seizure to
the Financial Intelligence Unit.
(6) For the purpose of this section-
(a) “authorized officer” means a police officer or a customs officer,
(b) “negotiable bearer instrument” means a document representing
ownership of debts or obligations, including bills of exchange,
promissory notes or certificates of deposit, whether made payable to
bearer or not.
Seizure of
39. -(1) An authorized officer may seize and detain any
currency or currency or negotiable bearer instruments which is being
negotiable imported into, or exported from, Malawi, in any form or manner
bearer
if he or she has reasonable grounds for suspecting that it is-
instruments
(a) derived from a serious crime or a money laundering offence
or an offence of financing of terrorism; or
(b) intended by any person for use in the commission of a serious
crime or a money laundering offence or an offence of financing of
terrorism.
(2) For the purpose of this section-
(a) “authorized officer” means a police officer or a customs officer;
(b) “negotiable bearer instrument” means a document representing
ownership of debts or obligations, including bills of exchange, promissory
notes or certificates of deposit, whether made payable to the bearer or not.
32
Money laundering, proceeds of serious crime and Terrorist Financing 33
40. -(1) Currency and negotiable bearer instruments seized
Detention and
under section 38 or 39 shall not be detained for more than seven
release of
days after seizure, unless a court grants an order of continued
currency or
detention for a period not exceeding three months from the date of
negotiable
seizure, upon being satisfied that-
bearer
instruments
seized
(a)There are reasonable grounds to suspect that the currency or
negotiable bearer instrument was derived from a serious crime,
a money laundering offence or an offence of financing of
terrorism, or is intended by any person for use in the commission
of any such an offence, and
(b)the continued detention of the currency or negotiable
bearer instrument is justified while its origin or derivation is
further investigated.
(2)The court may subsequently order, after hearing, with notice
to all parties concerned, the continued detection of the currency and
negotiable bearer instruments if satisfied of the matter mentioned
in subsection (1),but the total period of detection shall not exceed
two years from the date of the order.
(3) Subject to subsection (5), currency and negotiable bearer
instruments detained under this section shall be released in whole or
in part to the person from whom it was seized or to other persons
claiming an interest in the currency or negotiable bearer
instrument-
(a)by order of a court that its continued detention is no longer
justified, upon application by or on behalf of that person and after
considering any views of the competent authority to the contrary,
or
(b)by an authorized officer, if satisfied that its continued
detention is no longer justified.
(4)Where the currency and negotiable instruments have
not been claimed any person within two years of it being seized or
detained, an authorized officer may make an application to the
court that such cash or negotiable instrument be forfeited to the
Government.
(5)No cash or negotiable bearer instruments detained under this
section shall be released where –
(a)an application is made under Part IV for the purpose of –
(i)the confiscation of the whole or any part of the currency
or negotiable bearer instrument, or
(ii)the continued detention of the currency or negotiable
bearer instrument pending determination of its liability to
confiscation, or
33
34 money Laundering, Proceeds of Serious Crime and Terrorist Financing
(b) proceedings are instituted in Malawi or elsewhere against
any person for an offence with which the currency or negotiable
bearer instrument is connected,
unless and until the proceedings relating to the relevant application or the
proceedings for the offence , as the case may be, have been
concluded.
Power of
41. -(1) The Financial Intelligent Unit may apply to court for a
Financial
warrant to enter any premises belonging to or in the possession or
intelligence
control of a financial institution, or any officer or employee there of
unit to obtain
and to search the premises and remove any document, material or
search
other thing therein for the purpose of the Financial Intelligence
warrant
Unit, as ordered by the court and specified in the warrant.
(2)The court may grant the application if it is satisfied that there
are reasonable ground to believe that-
(a)the financial institution has failed to keep a transaction
record, or report a suspicious transaction, as required by this Act,
(b) an officer or employee of a financial institution is
committing, has committed or is about to commit an offence
of money laundering or financing terrorism.
Property
42. For purposes of determining whether any such property belongs
tracking and
to or is in the possession or under the control of any person, the
monitoring
competent authority may, upon application to the court, obtain an order-
orders
(a)that any document relevant to-
(i) identifying, locating or quantifying any such property, or
(ii) identifying or locating any document necessary for the
transfer of any such property,
belonging to, or in the possession or control of the person be
delivered forthwith to the competent authority,
(b) that the financial institution produce forthwith to the
competent authority all information obtained about any transact-
tion conducted by or for that person during such period before or
after the order as the court directs
Order to
43. -(1)The Financial Intelligence Unit may, upon application to
enforce
the court, after satisfying the court that a financial institution has
compliance
failed to comply with any obligation provide for under section 24,
with
25 26,27 or 28 obtain an order against all or any officers or
obligations
employees of the institution in such terms as the court deems
under this Act
necessary, in order to enforce compliance with such obligation .
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Money Laundering, Proceeds of Serious Crime and Terrorist Financing 35
(2)In granting the order pursuant to subsection (1) the court may
order that should the financial institution fail to comply with all or
any provision of the order, such institution, officer or employee
shall pay a financial penalty in the sum and in the manner directed
by the Court
(3 )Enforcement of compliance with and implementation of
the provision of this Act by financial institution shall be the
responsibility of the supervisory authority with respect to the
financial institutions under its supervision and the Financial
Intelligence Unit with respect to all other financial institutions.
(4) All officers and employees of a financial institution shall take
all reasonable steps to ensure the compliance by that financial
institution with its obligations under this Act.
44. This Act shall have effect notwithstanding any obligation as
Secrecy
to secrecy or other restriction on disclosure of information imposed
obligation
by any other written law or otherwise, if the court so orders.
overridden
45. - (1) No civil, criminal, administrative or disciplinary
Protection of
proceedings shall be taken against–
persons
reporting
(a) a financial institution, an auditor, the competent authority
suspicious
or the supervisory authority, or
transactions
(b)an officer, employee or agent of the financial institution, or
an auditor, the competent authority or the supervisory authority
acting in the course of that person’s employment or agency,
in relation to any action by the financial institution, the auditor, the
competent authority or the supervisory authority or its officer,
employee or agent taken under section 28 or 29 carried out in good
faith or in compliance with directions given by the Financial
Intelligence Unit pursuant to section 11(2) (e) or (k).
(2) Subsection (1) shall not apply in respect of proceedings for an
offence against section 30.
46. Where an investigation has began against a person for a
Restitution of
serious crime and, property was restrained under this Act in relation
restrained
to that offence, and any of the following occurs –
property
(a)the person is not charged in Malawi with the serious crime,
(b) the person is charged with a serious crime in Malawi but
not convicted of the that offence,
(c) a conviction for that serious crime in Malawi is taken to be
quashed and no conviction for such an offence substituted,
the court shall order restitution of the restrained property.
35
36 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
Damages
47. Nothing in this Act affects the right of a person whose
property has been restrained to seek the payment of damages, either
actual or punitive, in cases where it is alleged that the action of the
Government involved any abuse of process,
PART IV – CONFISCATION
Division 1-Confiscation and Pecuniary Penalty Orders
Application
48. -(1) Where a person is convicted of serious crime,
for
the competent authority may, not later than twelve months after
confiscation
conviction, apply to court for one or both of the following orders-
order or
pecuniary
(a) a confiscation order against property that is tainted
penalty order
a property in respect of the offence, and
(b) a pecuniary penalty order against the person in respect of
benefits derived by the person from the commission of the offence.
(2) An application under subsection (1) may be made in respect
of one or more than one offence.
(3) Where an application under this section is finally determined,
no further application for a confiscation order or a pecuniary
penalty order may be made in respect of the offence for which the
person was convicted without the leave of the court and the court
shall not give such leave unless it is satisfied that-
(a) the property or benefit to which the new application relates was
identified after the previous application was determined, or
(b) necessary evidence became available after the previous
application was determined; or
(c) it is in the interest of justice that the new application be made.
Notice of
49. -(1) Where the competent authority applies for a confiscation
application
order against property under section 48 (1) –
(a) the competent authority shall give no less than fourteen
days written notice of the application to the person and to any
other person who the competent authority has reason to believe
may have an interest in the property;
(b) the person and any other person who claims an interest in
the property may appear and adduce evidence at the hearing of
the application; and
(c) the court may, at any time before the final determination of
the application, direct the competent authority to-
36
Money Laundering, Proceeds of Serious Crime Terrorist Financing 37
(i) give notice of the application to any person who, in the
opinion of the court, appears to have an interest in the property;
(ii) publish in the Gazette or a newspaper published and
circulating in Malawi, a notice of the application.
(2) Where the competent authority applies for a pecuniary
penalty order under section 48 (1) –
(a) the competent authority shall give the person against
whom the application is made on less fourteen days notice
of the application; and
(b) the person against whom the application is made may
appear and adduce evidence at the hearing of the application.
50. -(1) The court hearing the application under section 48 (1)
Amendment
may, before the final determination of the application and on the
of application
application of the competent authority, amend the application to
include any other property or benefit, as the case may be, upon
being satisfied that-
(a) the property or benefit was not reasonably capable of
identification when the application was made; or
(b) necessary evidence became available only after the
application was originally made.
(2) Where the competent authority applies to amend an
application for a confiscation order and the amendment would have
the effect of including additional property in the application for
confiscation, the competent authority shall give no less than
fourteen days written notice of the application to amend to any
person who the competent authority has reason to believe may have
an interest in the property to be included n the application for a
confiscation order.
(3) Any person who claims an interest in the property to be
included in the application of a confiscation order may appear and
adduce evidence at the hearing of the application to amend.
(4) Where the competent authority applies to amend an applica-
tion for a pecuniary penalty order against a person and the effect of
the amendment would be to include an additional benefit in the
application, the competent authority shall give the person no less
than fourteen days written notice of the application to amend.
51. -(1) Where an application is made to the court for a
confiscation order or a pecuniary penalty order under section 48 (1),
the court may, in determining the application, have regard to the
transcript of any proceedings against the person the offence.
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38 Money Laundering, Proceeds of Serious Crime Terrorist Financing
(2) Where an application is made for a confiscation order or a
pecuniary penalty order to the court before which the person was
convicted, and the court has not, when the application is made,
passed sentence on the person for the offence, the court may, if it is
satisfied that it is reasonable to do so in all the circumstances, defer
passing sentence until it determined application for the order.
Procedure for
52. -(1) Where-
in rem
confiscation
(a) a person has been charged with a serious crime; and
order where
person dies or
(b) a warrant for the arrest of the person has been issued in
absconds
relation to that charge,
the competent authority may apply to the court for a confiscation
order in respect of any tainted property if the defendant has died or
absconded.
(2) For the purpose of subsection (1), a person is deemed to have
absconded if reasonable attempts to arrest the person pursuant to
the warrant have been unsuccessful during the period of six months
commencing on the day the warrant was issued, and the person
shall be deemed to have so absconded on the last day of that period
of six months.
(3) Where the competent authority applies under this section for
a confiscation order against any tainted property the court shall,
before hearing the application-
(a) require notice of the application to be given to any person
who, in the opinion of the court, appears to have an interest in the
Property;
(b) direct the notice of the application to be published in the
Gazette and in newspaper published and circulating in Malawi
containing such particulars and for so long as the court may
require.
Division 2-Confiscation
Confiscation
53.-(1) Where, upon application by the competent authority, the
order on
court is satisfied that property is tainted property in respect of a
conviction
serious crime of which a person has been convicted, the court may
order that specified property be confiscated.
(2) In determining whether property is tainted property the court
may infer, in the absence of evidence to the contrary-
(a) that the property was used in or in connection with the
commission of a serious crime if it was in the possession of the
person at the time of, or immediately after the commission of the
serious crime for which the person was convicted;
38
Money Laundering, Proceeds of Serious Crime Terrorist Financing 38
(b) that the property was derived, obtained or realized as a
result of the commission of the serious crime if it was acquired
by the person during or within a reasonable time after the period
of the commission of the serious crime of which the
person was convicted, and the court is satisfied that the income of
that person from sources unrelated to criminal activity of that per-
son cannot reasonable account for the acquisition of that
property.
(3) Where the court orders that property, other than money, be
confiscated, the court shall specify in the order the amount that it
considers to be the value of the property at the time when the order
is made.
(4) In considering whether a confiscation order should be made
under subsection (1) the court shall have regard to-
(a) the rights and interest, if any, of third parties in the
property;
(b) the gravity of the serious crime concerned;
(c) any hardship that may reasonably be expected to be caused
to any person by the operation of the order; and
(d) the use that is ordinarily made of the property, or the use to
which the property was intended to be put.
(5) Where the court makes a confiscation order, the court may
give such directions as are necessary or convenient for giving effect
to the order.
54. -(1) Subject to subsection (2), where a court makes a
Effect of
confiscation order against any property under section 53, the
confiscation
property vests absolutely with the Government by virtue of the
order on
order.
conviction
(2) Where property ordered to be confiscated is registrable
property-
(a) the property vests with the Government in equity but does
not vest with the Government at law until the applicable
registration requirements have been complied with;
(b) the Government is entitled to be registered as owner of the
property;
(c) the Attorney General has power on behalf of the
Government to do or authorize the doing of anything necessary
or convenient to obtain the registration of the Government as
owner, including the execution of any instrument to be executed
by a person transferring an interest in property of that kind.
39
40 Money Laundering, Proceeds of Serious Crime Terrorist Financing
(3) Where the court makes a confiscation order against property
under section 53-
(a) the property shall not, except with the leave of the court and
in accordance with any directions of the court, be disposed of, or
otherwise dealt with, by or on behalf of the Government before
the relevant appeal date; and
(b) if after the relevant appeal date, the order has not been
discharged, the property may be disposed of and the proceeds
applied or otherwise dealt with in accordance with the directions
of the Attorney-General.
(4) For purpose of this section-
“registrable property” means property the title to which is
passed by registration in accordance with the provisions of a
written law;
“relevant appeal date” in relation to a confiscation order made
in consequence of a conviction of a person of a serious crime
means-
(a)the date on which the period allowed by rules of court for
the lodging of an appeal against the conviction of a person or
for the lodging of an appeal against the making of a confisca-
tion order expires without an appeal having been lodged,
whichever is the latter; or
(b) where an appeal against the conviction of a person or
against the making of a confiscation order is lodged, the date
on which the appeal lapse in accordance with the rules of
court or is finally determined, whichever is the latter.
Voidable
55. The court may-
transfers
(a) before making a confiscation order under section 53; and
(b) in the case of property in respect of which a restraining
order was made, where the order was served in accordance with
section 83,
set aside any conveyance or transfer of the property that occurred
after the seizure of the property or the service of the restraining
order, unless the conveyance or transfer was made for valuable
consideration to a person acting in good faith and without notice.
Protection of
56. –(1) Where an application is made for a confiscation order
third parties
against property under Division 1, a person who claims an interest
in the property may apply to the court, before the confiscation order
is made, for an order under subsection (2).
(2) If a person applies to the court for an order under this section
in respect of property and the court is satisfied on a balance of
probabilities-
40
Money Laundering, Proceeds of Serious Crime and Terrorist Financing 41
(a) that the person was not in any way involved in the
commission of the serious crime; and
(b) where the person acquired the interest during or after the
commission of the serious crime, that he or she acquired the
interest-
(i) for sufficient consideration; and
(ii) without knowing, and in circumstances such as not to
arouse a reasonable suspicion that the property was, the time
he or she acquired it, property the was tainted property,
the court shall make an order declaring the nature, extent and
value at the time the order is made of the interest of the person.
(3) Subject to subsection (4), where a confiscation order has
already been made directing the confiscation of property, a person
who claims an interest in the property may, before the end of the
period of twelve months commencing on the day on which the
confiscation order is made, apply to the court for an order under
subsection (2).
(4) A person who –
(a) had knowledge of the application for the confiscation order
before the order was; or
(b) appeared at the hearing of that application,
shall not be permitted to make an application under subsection (3)
except with leave of the court.
(5) A person who makes an application under subsection (1)
or (3) shall give no less than fourteen days written notice of the
making of the application to the Attorney-General who shall be a
party to any proceedings in the application.
(6) An applicant or the Attorney-General may in accordance with
the rules of court, appeal against an order made under subsection
(2).
57. (1) Where the court makes a confiscation order against
Discharge of
property under section 53 in reliance on a conviction of a person of
confiscation
a serious crime and the conviction is subsequently quashed, the
order on
quashing of the conviction discharges the order.
appeal and
quashing of
conviction
(2) Where a confiscation order against property is discharged as
provided for in subsection (1), or by the court hearing an appeal
against the making of the order, any person who claims to have an
interest in the property immediately before the making of the
confiscation order may apply to the court in writing for the transfer
of the interest to the person.
41
42 Money Laundering, Proceeds of Serious Crime and Terrorist Finance
(3) On receipt of an application under subsection (2) the court
shall-
(a) if the interest is vested in Malawi, give directions that the
property or part therefore to which the interest of the applicant
relates be transferred to the person; or
(b) in any other case, direct that there be payable to the person
an amount equal to that of the interest as at the time the order is
made.
Payment
58. Where a court is satisfied that a confiscation order should
instead of a
be made in respect of the property of a person convicted of a
confiscation
serious crime but that property or any part thereof or interest
order
therein cannot be made subject to such an order and, in particular,
the property;
(a) cannot on the exercise of due diligence be located
(b) has been transferred to a third party in circumstances which do not give
rise to a reasonable inference that the title or interest was transferred for
the purpose of avoiding the confiscation of the property.
(c) is located outside Malawi;
(d) has been substantially diminished in value or rendered
worthless; or
(e) has been commingled with other property that cannot be
divided without difficulty,
the court may, instead of ordering the property or part thereof or
interest therein to be confiscated, order the convicted person to pay
to the Government an amount equal to the value of the property, or
part interest.
Application of
59. Where the court orders a person to pay an amount under
procedure for
section 58, that amount shall be treated as if it were a fine imposed
enforcing
upon him or her in respect of a conviction for a serious crime, and
fines
the court may-
(a) notwithstanding anything contained in any other written
law, impose in default of the payment of that amount, a term of
imprisonment-
(i) of two years, where the amount does not exceed
K100,000;
(ii) of five years, where the amount exceeds K100, 000 but
does not exceed K500,000;
(iii) of ten years, where the amount exceeds K1,000,000;
(b) direct that the term of imprisonment imposed pursuant to
subsection (a) be served consecutively to any other form of
imprisonment imposed on that person or that the person is then
serving
42
Money Laundering, Proceeds of serious Crime and Terrorist Financing 43
(c) direct that the provisions of the Prisons Act regarding Cap.9:02
the remission of sentences of prisoners serving a term of
imprisonment shall not apply in relation to a term of imprison-
ment imposed on a person pursuant to paragraph (a).
60. - (1) Subject to section 52(3), where an application is made
Confiscation
to the court under section 52 (1) for a confiscation order against
where a
any tainted property in consequence of a person having died or
person dies or
absconded in connection with a serious crime and the court is
absconds
satisfied the-
(a) any property is tainted property in respect of the serious
crime;
(b) proceedings in respect of a serious crime committed in relation
to that property were commenced; and
(c) the defendant charged with the offence referred to in paragraph
(b) has died or absconded,
the court may order that the property or such property as is specified
by the court in the order be confiscated.
(2) the provisions of section 53, 54, 55 and 56 shall apply with such
modifications as are necessary to give effect to this section.
Division 3- Pecuniary Penalty Orders
61. –(1) Subject to this section, where the competent authority
Pecuniary
applies to the court under section 48 for a pecuniary penalty order
penalty order
against a person in respect of the conviction of that person for a
on conviction
serious offence the court shall, if it is satisfied that the person has
benefited from that offence, order him to pay to the Government an
amount equal to the amount that might be realized at the time the
pecuniary penalty order is made.
(2) The Court shall assess the value of the benefit derived by a person
from the commission of a serious offence in accordance with section
62, 63, 64 and 65.
(3) The Court shall not make a pecuniary penalty order under this
section-
(a) until the period allowed by the rules of court for the
lodging of an appeal against conviction has expired without such
appeal having been lodged; or
(b) where an appeal against conviction has been lodged, until
the appeal lapses in accordance with the rules of court or is
finally determined, whichever is the later date.
43
44 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
Rules of
62. –(1) Where a person obtains property as the result of, or in
determining
connection with, the commission of a serious crime, his or her
benefit and
benefit is the value of the property so obtained.
assessing
value
(2) Where a person derived an advantage as result of, or in
connection with , the commission of a serious crime, his or her
advantage shall be deemed to be a sum of money equal to the value
of the advantage so delivered.
(3) In determining whether a person has benefited from the
commission of a serious crime or from the offence taken together
with other serious crime, the court shall, unless the contrary is
proved, deem-
(a) all property appearing to the court to be held by the person,
on the day on which the application is made, to be property that
came into the possession or under the control of the person
by the reason of the commission of that serious crime or those
serious crimes for which the person was convicted; and
(b) any property received or deemed to have been received by
the person at any time as a result of, or in connection with the
commission by him or her of that serious crime or those serious
crimes as property received by him or her free of any interest
therein.
(4) Where a pecuniary penalty order has been previously made
against a person, in assessing the value of any benefit derived by
him or her from the commission of the serous crime, the court shall
leave out of account any of the benefits that are shown to the court
to have been taken into account in determining the amount to be
recovered under that order.
(5) If evidence is given at the hearing of the application that the
value of the property of a person at any time after the commission
of the serious crime exceeded the value of the property of the person before the
commission of the offence, then the court shall,
subject to subsection (6), treat the value of the benefit as being not
less than the amount of that excess.
(6) If, after evidence of the kind referred to in subsection (5) is
given, the person satisfies the court that the whole or part of the
excess of the value of property as due to causes unrelated to the
commission of the serious crime, subsection (5) does not apply to
the excess or, as the case may be, that part.
44
Money Laundering, Proceeds of Serious and Terrorist financing 45
Statements
63. –(1) Where-
relating to
benefit from
(a) a person has been convicted of a serious crime and the
commission
competent authority tenders to the court a statement as to any
of serious
matters relevant to-
crimes
(i) determining whether the person has benefited from the
offence or from any other serious crime of which he or she is
convicted in the same proceeding or which is taken into
account in determining his or her sentence; or
(ii) an assessment of the value of the benefit of the person
from the offence or any other serious crime of which he or she
is convicted in the same proceedings or which is taken into
account; and
(b) the person accepts to any extent an allegation in the
statement referred to in paragraph (a),
The court may, for the purposes of so determining or making that
assessment, treat his or her acceptance as conclusive of the matters
to which it relates.
(2) Where-
(a) a statement is tendered under subsection (1) (a); and
(b) the court is satisfied that a copy of that statement has been
served on the person,
the court may require the person to indicate to what extent he or she
accepts each allegation in the statement and so far as he or she
does not accept any allegation, to indicate any matters he or she
proposes to rely on.
(3) Where the person fails in any respect to comply with a
requirement under subsection(2), he or she may be treated for the
purposes of this section as having accepted every allegation in the
statement other than-
(a) an allegation in respect of which he or she complies with
the requirement; and
(b) an allegation that he or she has benefited from the serious
crime or that any property or advantage was obtained by him or
her as a result of or in connection with the commission of the
offence.
45
46 Money Laundering, Proceeds of Serious and Terrorist financing
(4) Where-
(a) the person tenders to the court a statement as to any
matters relevant to determining the amount that might be realized
at the time the pecuniary penalty order is made; and
(b) the competent authority accepts to any extent any
allegation in the statement,
the court may, for the purpose of that determination, treat the
acceptance of the competent authority as conclusive of the matters
to which it relates,
(5) An allegation may be accepted or a matter indicated for the
purposes of this section either-
(a) orally before the court; or
(b) in writing in accordance with rules of court.
(6) An acceptance by a person under this section that he or she
received any benefit from the commission of a serious crime is
admissible in any proceeding for any offence.
Amount
64. -(1) Subject to subsection (2), the amount to be recovered
recovered
from a person under a pecuniary penalty order shall be the amount
under
which the court assess to be the value of the benefit of the
pecuniary
person from the serious crime, or if more than one, all the offences
penalty order
in respect of which the order may be made.
(2) Where the court is satisfied as to any matter relevant for
determining the amount which might be realized at the time the
pecuniary penalty order is made, whether by acceptance under
section 63 or otherwise, the court may issue a certificate giving its
opinion as to the matters concerned, and shall do so if satisfied that
the amount that might be realized at the time the pecuniary penalty
order is made is less than the amount it assesses to be the value of
the benefit of the person from the offence, or if more than one, all
the offences in respect of which the pecuniary penalty order may be
made.
Variation of
65. - Where-
pecuniary
penalty order
(a) the court makes a pecuniary penalty order against a person
in relation to a serious crime;
(b) in calculating the amount of the pecuniary penalty order,
the court took into account a confiscation order of the property or
proposed confiscation order in respect of property; and
46
Money Laundering, Proceeds of Serious an Terrorist Financing 47
(c) an appeal against confiscation or a confiscation order is
allowed or the proceedings from the proposed confiscation order
terminate without the proposed confiscation order being made,
the competent authority may apply to the court for a variation of the
pecuniary penalty order to increase the amount of the order by the
value of the property not so confiscated and the court may, if it
considers it appropriate to do so, vary the order accordingly.
66. –(1) In assessing the value of the benefit derived by the person
Lifting the
from the commission of a serious crime, the court may treat as
corporate veil
property of the person any property that, in the opinion of the court,
is subject to the effective control of the person whether or not he or
she has-
(a) any legal or equitable interest in the property; or
(b) any, right, power or privilege in connection with the
property.
(2) Without prejudice to the generality of subsection (1), the court
May have regard to-
(a) shareholdings in, debentures over or directorships in any
company that has an interest, whether direct or indirect, in
the property, and for this purpose the court may order the
investigation and inspection of the books of a named company;
(b) any trust that has any relationship to the property;
(c) any relationship whatsoever between the persons having an
interest in the property or in companies of the kind referred to in
paragraph (a) or trust of the kind referred to in paragraph (b), and
any other persons.
(3) Where the court, for the purposes of making a pecuniary order
against a person, treats particular property as the property of a
person pursuant to subsection (1), the court may, on application by
the competent authority make an order declaring that the property is
available to satisfy the order.
(4) Where, under subsection (3), the court declares that property
Is available to satisfy a pecuniary penalty order-
(a) the order may be enforced against the property as if the
property were the property of the person against whom the order
is made; and
(b) a restraining order may be made in respect of the property
as if the property were property of the person against whom the
order is made.
(5) Where the competent authority makes an application for an
order under subsection (3) that property is available to satisfy a
pecuniary penalty order against a person
47
48 Money Laundering, Proceeds of Serious Crime and Terrorist Financing
(a) the competent authority shall give written notice of the
application to the person and to any person who the competent
authority has reason to believe may have an interest in the
property; and
(b)the person and any person who claims an interest in the
property may appear and adduce evidence at the hearing of the
application.
Enforcement
67. Where the court orders a person to pay an amount under a
Of pecuniary
pecuniary penalty order, section 59 shall apply with such modifica-
Penalty order
tions as the court may determine for the purpose of empowering the
Court to impose a term of imprisonment on a person in default of
compliance with a pecuniary penalty order.
Discharge of
68. A pecuniary penalty order is discharged-
Pecuniary
Penalty order
(a)if the conviction of the serious crime or offences in reliance
on which the order was made is or is taken to be quashed and no
conviction for the offence or offences is substituted;
(b)if the order is quashed on appeal; or
(c) on the satisfaction of the order by payment of the amount
due under the order.
Division 4-Control of Property
Powers to
69. –(1) The competent authority may-
search for and
seize tainted
(a)search a person for tainted property,
property
(b) enter upon land or upon or into premises and search the
land premises for tainted property:
and in either case, seize any property found in the course of the
search that the competent authority believes, on reasonable grounds
to be tainted property:
provided that the search or seizures is made-
(a) with the consent of the person or the occupier of the land
or premises, as the case may be;
(b) under warrant issued under section 70.
(2) Where the competent authority searches a person under
subsection (1), he or she may also search any property in, or
apparently in, the immediate control of that person.
48
Money Laundering, Proceeds of Serious and Terrorist Financing 49
70. - (1) where the competent authority has reasonable grounds
Search
for suspecting that there is, or may be within the next seventy-two
warrant in
hours, tainted property of a particular kind
relation to
tainted
property
(a) on a person;
(b) in the clothing that is being worn by a person;
(c) upon land or upon or in any premises,
the competent authority may lay before a magistrate an information
on oath setting out those grounds and apply for the issue of a
warrant to search the person, the land or the premises as the case
may be, for tainted property of that kind.
(2) Where an application is made under subsection (1) for a
warrant to search a person, land or premises, the magistrate may,
subject to subsection (4), issue a warrant authorizing the competent
authority, with such assistance and by such force as is necessary and
reasonable-
(a) to search the person for tainted property of that kind;
(b) to enter upon the land or in upon premises and to
search the land or premises for tainted property of that kind; and
(c) to seize property found in the course of the search that
the competent authority believes on reasonable grounds to be
tainted property of that kind.
(3) A warrant may be issued under subsection (2) in relation to
tainted property whether or not an information has been laid in
respect of the relevant offence.
(4) A magistrate shall not issue a warrant under subsection (2)
unless, where an information has not been laid in respect of the
relevant offence at the time when the application for the warrant is
made, the magistrate is satisfied that-
(a) an information will be laid in respect of the relevant offence
within forty-eight hours; and
(b) the property is tainted property.
(5) A warrant issued under this section shall state-
(a) the purpose for which it is issued, including a reference to
the nature of the relevant offence;
(b) a description of the kind property authorized to be seized
49
50 Money Laundering, Proceeds of Serious and Terrorist Financing
(c) a time at which the warrant cease to be in force; and
(d) whether entry is authorized to be at any time of the
day or night or during specified hours.
(6) If during the course of searching under a warrant issued under
this section, the competent authority finds-
(a) property that the competent authority believes on
reasonable grounds to be tainted property either of a type not
specified in the warrant or tainted property in relation to another
serious crime; or
(b) anything the competent authority believes on reasonable
grounds will afford evidence as to the commission of a serious
crime,
the competent authority may seize that property or thing and the
warrant shall be deemed to authorize such seizure.
Searching in
71.- (1) Where the competent authority suspects, on reasonable
emergencies
grounds, that-
(a) particular property is tainted property;
(b) it is necessary to exercise the power of search and seizure
in order to prevent the concealment, loss or destruction of the
property; and
(c ) the circumstances are so urgent that they require immediate
Exercise of the power without the authority of a warrant or the
order of a court,
the competent authority may search a person, enter upon land, or
upon or into premises and search for the property; and if property is
found, seize the property.
(2) If during the course of a search conducted under this section,
the competent authority finds-
(a) property that the competent authority believes, on reason-
able grounds, to be tainted property; or
(b) anything the competent authority believes, reasonable
grounds, will afford evidence as to the commission of a criminal
offence,
the competent authority may seize that property or thing
Record of
72.- The competent authority who seizes property under
property
section 70 or 71 shall detain the property seized, taking reasonable
seized
care to ensure that the property is preserved.
50
Money Laundering, Proceeds of Serious and Terrorist Financing 51
(2) The competent authority under subsection (1) shall be
required to report to the Financial Intelligence Unit, on a monthly
basis, on the status of all seized property.
73. -(1) Where property has been seized under section 70 or 71
Return of
otherwise than because it may afford evidence of the commission of seized
an offence, a person who claims an interest in the property may
property
apply to the court for an order that the property be returned to the
person.
(2) Where a person makes an application under subsection (1) and
the court is satisfied that-
(a) the person is entitled to possession of the property;
(b) the property is not tainted property; and
(c) the person in respect of conviction, charging or proposed
charging the seizure of the property was made has no interest in
the property,
the court shall order the return of the property to the person.
74. Where a foreign state requests assistance to locate or seize
Search for
property suspected to be tainted property in respect of an offence
and seizure
within its jurisdiction, the provisions of sections 70 and 71 apply
of tainted
with necessary modification.
property in
relation to
foreign
offences
Division 5 – Terrorist Cash and Terrorist Property
75. - (1) Where the competent authority has reasonable grounds
Seizure and
to suspect that any cash-
detention of
terrorist
(a) is intended to be used for the purpose of terrorism;
(b) belongs to, or is held on trust for, a proscribed organization;
or
(c) is or represents property obtained through acts of terrorism,
it may seize cash
(2) The competent authority may size cash, under subsection(1)
even if it reasonably suspects part only of the cash to be terrorist
cash, where it is not reasonably practicable to seize that part only of
the cash.
(3) The competent authority may its power under sub-
section (1), whether or not any proceedings have been brought for
an offence in connection with the terrorist cash.
51
52 Money Laundering, Proceeds of Serious and Terrorist Financing
(4) The competent authority shall, as soon as is reasonably
practicable, apply to a Judge in chambers for a detention order with
respect to the cash seized under subsection (1).
(5) The Judge in chambers shall not make an order for detention
of the cash unless he or she is satisfied that there are reasonable
grounds for suspecting that the cash-
a. is intended to be used for the purposes of terrorism;
b. consists of resources of a proscribed organization; or
c. is or represents property obtained through terrorist
activities.
(6) Subject to subsection (8), any order made under subsection
(5) shall remain valid for a period of ninety days, and may be
renewed for further periods of ninety days by the Judge in
chambers, until production of the cash before the court in
proceedings against any person for an offence with which the cash
is connected.
(7) Any cash detained under this section shall be deposited by the
competent authority in an interest-bearing account.
(8) The cash, with the interest, may be released by order of the
Judge in chambers-
(a) where the conditions under subsection (5) are no longer
met; or
(b) where no proceedings are brought in connection with the
cash detained.
(9) For the purpose of this section, “cash” means-
(a) coins and notes in any currency;
(b) postal orders;
(c) traveler’s cheques;
(d) banker’s drafts;
(e) bearer bonds and bearer shares; or
(f) such other monetary instruments as the Minister may
specify by notice published in the gazette.
Terrorist
76.-(1) Any person who-
funding
(a) solicits, receives, provides or possesses money or other
property;
(b) enters into, or becomes concerned in, an arrangement as a
result of which money or other property is made available or is
to be made available,
52
Money Laundering, Proceeds of Serious and Terrorist Financing 53
for the purposes of terrorism, or for a terrorist or proscribed
organization, commits an offence and shall be liable, on conviction,
to imprisonment for the fifteen years, and to a fine of K15, 000, 00.
(2) The Minister may, by notice published in the Gazette , publish
a list of terrorist or terrorist organizations.
77. - (1) Any person who enters into, or becomes concerned in,
Dealing in
an arrangement which facilitates the retention or control by, or on
terrorist
behalf of, another person, of terrorist property, in any manner,
property
including-
(a) concealment;
(b) removal from the jurisdiction; or
(c) transfer to any other person,
commits an offence and shall be liable, on conviction, to
imprisonment for two years, and to a fine of K100, 000.
(2) It shall be a defence for a person charged under subsection (1)
to prove that he or she did not know and had no reasonable cause to
suspect that the arrangement related to terrorist property.
78. -(1) Where the supervisory authority has reason to believe or Restraining
suspects that a financial institution holds an account or property on
directives in
behalf of a terrorist, it shall issue a written directive to the financial respect of
institution requiring it to restrain or freeze any account or other
terrorist
property held by that financial institution on behalf of terrorist and
account or
the financial institution shall comply with such a directive.
property
(2) Subject to subsection (3), a directive given by the
supervisory authority pursuant to subsection (1) shall be effective
for three months unless sooner revoked by the authority.
(3) The court may, upon the application of the competent
authority, order the extension of a restraining or a freezing direction
issued pursuant to subsection (1):
Provided that it is satisfied that the account or other property is
owned by or on behalf of a terrorist.
(4) The supervisory authority may at any time revoke any
directive issued under subsection (1) and shall notify the financial
institution accordingly.
(5) Where the supervisory authority decides to revoke a directive
which has been extended by the court under subsection (3) it shall
notify the court accordingly and the court shall revoke the extension
order.
(6) The revocation of a directive or extension order shall not
affect the validity of any action taken on the basis of the direction of
order prior to revocation
53
54 Money Laundering, Proceeds of Serious and Terrorist Financing
(7) A person affected by a directive issued under subsection (1)
may apply to the court for a revocation of the directive in
relation to him or her.
(8) The court shall revoke the directive in relation to the applicant
under subsection (7) if satisfied that the account or other property
or the interest of the person in it is not owed by or on behalf of a
terrorist or proscribed organization.
(9) It shall be a defence against any action brought against the
supervisory authority or any person who complies with a directive
issued under subsection (1) that the issuance of the directive or the
compliance with it was in accordance with the provision of this
section.
(10) No person shall be held liable in any court for or with respect
to anything done or omitted to be done in good faith in accordance
with this section.
Division 6-Restraining orders
Application
79. -(1) The competent authority may apply to the court for a
for restraining
restraining order against any realizable property held by the
order
defendant or specified realizable property held by a person other
than the defendant.
(2) An application for a restraining order may be made ex parte
and shall be in writing and be accompanied by an affidavit stating-
(a) where the defendant has been convicted of a serious crime,
the serious crime for which he or she was convicted, the date of
the conviction, the court before which the conviction was
obtained and whether an appeal has been lodge against the
conviction;
(b) where the defendant has not been convicted of a serious
crime, the serious offence for which he or she is charged or about
to be charged and grounds for believing that the defendant
committed the offence;
(c) a description of the property in respect of which the
restraining order is sought;
(d) the name and address of the person who is believed to be in
possession of the property;
(e) the grounds for the belief that the property is tainted
property in relation to the offence;
(f) the grounds for the belief that the defendant derived a
benefit, directly or indirectly, for the commission of the offence;
54
Money Laundering, Proceeds of Serious and Terrorist Financing 55
(g) where the application seeks a restraining order against
property of a person other than the defendant, the grounds for the
belief that the property is tainted property in relation to the
offence and is subject to the effective control of the defendant;
(h) the grounds for the belief that a confiscation order or a
pecuniary penalty order may be or is likely to be made under
section 48 in respect of the property.
80. - (1) Subject to this section, where the competent authority
Restraining
applies to the court for a restraining order under section 79 against
order
property and the court is satisfied that-
(a) the defendant has been convicted of a serious crime or has
been charged or is about to be charged with a serious crime;
(b) where the defendant has not been convicted of a serious
crime, there are reasonable grounds for believing that the
defendant has committed a serious offence;
(c) there is reasonable cause to believe that the property is
tainted property in relation to an offence or that the defendant
derived a benefit directly or indirectly from the commission of
the offence;
(d) where the application seeks a restraining order against
property of a person other than the defendant, there are
reasonable grounds for believing that the property is tainted
property in relation to an offence and that the property is subject
to the effective control of the defendant; and
(e) there are reasonable grounds for believing that a
confiscation order or a pecuniary penalty order is likely to be
made under section 48 in respect of the property,
the court may make an order in accordance with subjection (2)
(2) An order made pursuant to subsection (1) may-
(a) prohibit the defendant or any person from disposing of, or
otherwise dealing with, the property or such part thereof or
interest therein as is specified in the order, except in such manner
as may be specified in the order; and
(b) at the request of the competent authority, where the court is
satisfied that the circumstances so require-
(i) direct such person as the court may appoint to take
custody of the property or such part thereof as is specified in
the order and to manage or otherwise deal with all or any part
of the property in accordance with the directives of the court;
an
55
56 Money Laundering, Proceeds of Serious and Terrorist Financing
(ii) requiring any person having possession of the property
to give possession thereof to the person appointed under
sub-paragraph (i) to take custody and control of the property.
(3) an order under subsection (2) may be made subject to
such conditions as the court thinks fit, and without limiting the
generality of this subsection, may make provision for meeting out
of the property or a specified part of the property, any or all of the
following-
(a) the reasonable living expenses of the person, including the
reasonable living expenses of the dependants of the person, if
any, and reasonable business expenses;
(b) the reasonable expenses of the person in defending the
criminal charge and any proceedings under this Division; and
(c) any specified debt incurred by the person in good faith.
(4) In determining whether there are reasonable grounds for
believing that property is subject to the effective control of the
defendant the court may have regard to the matters referred to in
section 66.
(5) Where the other person appointed under subsection (2) (b) (i)
is given a direction in relation to any property, he or she may
apply to the court for directions or any question respecting the
management or preservation of the property under his or her
control.
(6) An application under subsection (1) shall be served on all
persons interested in the application or such of them as the court
thinks expedient and all such persons shall have the right to appear
at the hearing and be heard.
(7) Where the application is made under subsection (1) on the
basis that a person is about to be charged, any order made by the
court shall lapse if the person is not charged-
(a) where the offence is an offence against the laws of Malawi,
within three months; and
(b) where the offence is an offence against the laws of a
foreign State, within twelve months.
Undertaking
81. - (1) Before making a restraining order under section 80, the
by the
court may require the Government to give such undertaking as the
Government
court considers appropriate with respect to the payment of damages
or costs, or both, in relation to the making and execution of the
order.
56
Money Laundering, Proceeds of Serious and Terrorist Financing 57
(2) For the purposes of this section, the Attorney-General may
give such undertaking with respect to the payment of damages or
costs or both as are required by the court.
82. Before making a restraining order under section 80 the
Notice of
court may require notice to be given to, and may hear, any person
application
who, in the opinion of the court, appears to have an interest in the
for restraining
property, unless the court is of the opinion that giving such notice
order
before making the order would result in the disappearance,
dissipation or reduction in value of the property.
83. A copy of a restraining order shall be served on a person
Service of
affected by the order in such manner as the court directs or as may
restraining
be prescribed by rules of court.
order
84. (1) A copy of restraining order which affects land in
Registration
Malawi shall be registry.
of restraining
order
affecting land
(2) A restraining order is of no effect with respect to registered
land unless it is registered as a charge with the appropriate registry.
(3) Where particulars of a restraining order affecting land are
registered with appropriate registry, a person who subsequently
deals with the property shall, for the purposes of section 85 be
deemed to have notice of the order at the time of the dealing.
85.- (1) A person who knowingly contravenes a restraining order
Contravention
by disposing of or otherwise dealing with property that is
of restraining
subject to the restraining order is guilty of an offence and shall upon
order
conviction be liable-
(a) in the case of a natural person, to imprisonment of two
years and a fine of K100, 000; or
(b) in the case of a body corporate a fine of K500, 000.
(2) Where a restraining order is made against property and the
property is disposed of, or otherwise dealt with, in contravention of
the restraining order and the disposition or dealing was not for
sufficient consideration or not in favour of a person who acted in
good faith and without notice, the competent authority may apply to
the court that made the restraining order for an order that the
disposition or dealing be set aside.
(3) Where the competent authority makes an application under
subsection (2) in relation to a disposition or dealing, the court
may-
(a) set aside the disposition or dealing as from the day on
which the disposition or dealing took place; or
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58 Money Laundering, Proceeds of Serious and Terrorist Financing
(b) set aside the disposition or dealing as from the day of the
order under this subsection,
and declare the respective rights of any persons who acquired
interests in the property on, or after the day on which the disposition
or dealing took place, and before the day of the order under this
subsection.
Duration of
86. A restraining order remains in force until-
restraining
(a) it is discharged, revoked or varied; or
order
(b) the period of six months from the date on which it is made
or such later time as the court may determine; or
(c) a confiscation order or a pecuniary order, as the case may
be, is made in respect of property which is the subject of the
order.
Review of
87. –(1) A person who has an interest in property in respect of
restraining
which a restraining order was made under section 80 may, at any
order
time, apply to the court for an order under subsection (4).
(2) An application under subsection (1) shall not be heard by the
court unless the applicant has given to the competent authority at
least three clear days notice in writing of the application.
(3) The court may require notice of the application to be given to,
and may hear, any person who in the opinion of the court appears to
have an interest in the property.
(4) On an application under subsection (1) the court may revoke
or vary the restraining order or make the order subject to such
conditions as the court thinks fit; for the purposes of this subsection
the court may-
(a) require the application to enter into recognizances;
(b) vary the restraining order to permit the payment of
reasonable living expenses of the applicant, including his
dependants, if any, and reasonable legal or business expenses of
the applicant.
(5) An order under subsection (4) may only be made if the court
is satisfied that-
(a) the applicant is the lawful owner of the property or is
entitled to lawful possession thereof and appears to be innocent
of any complicity in the commission of a serious crime or of any
collusion in relation to such offence; and
(b) the property will no longer be required for the purposes of
any investigation or as evidence in any proceedings.
58
Money Laundering, Proceeds of Serious and Terrorist Financing 59
88.- (1) The competent authority may apply to the court that
Extension of
made a restraining order for an extension of the period of the
restraining
operation of the order.
order
(2) where the competent authority makes an application under
subsection (1), the court may extend the operation of a restraining
order for a specified period if it is satisfied that a confiscation order
may be made in respect of the property or part thereof or that a
pecuniary penalty order may be made against the person.
Division 7-Realization of Property
89. –(1) Where-
Realization
of property
(a) a pecuniary penalty order is made:
(b) the order is not subject to appeal; and
(c) the order is not discharged,
the court may, on an application by the competent authority,
exercise the powers conferred upon the court by this section.
(2) The court may-
(a) appoint an administrator in respect of realizable property;
(b) empower an administrator appointed under paragraph (a) to
take possession of any realizable property subject to such
conditions or exceptions as may be specified by the court;
(c) order any person having possession of realizable property
to give possession of it to any such receiver;
(d) empower an administrator to realize any realizable
property in such manner as the court may direct;
(e) order any person holding an interest in realizable property
to make such payment to the administrator in respect of any
beneficial interest held by the defendant or, as the case may be,
the recipient of a gift caught by this Act as the court may direct,
and the court may, on the payment being made, by order transfer,
grant or extinguish any interest in the property.
(3) The court shall not in respect of any property, exercise the
powers conferred by paragraph (b), (c), (d) or (e) unless a
reasonable opportunity has been given for persons holding any
interest in the property to make representations to the court.
90. -(1) Subject to subsection (2), the following property in the
Application
hands of an administrator appointed under sections 80 or 89, that is
of proceeds
to say-
of realization
and other
sums
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60 Money Laundering, Proceeds of Serious and Terrorist Financing
(a) the proceeds of the realization of any property under
section 90; and
(b) any other sums, being property held by the defendant,
shall, after such payments, if any, as the court may direct have been
made out of those sums, be payable to the registrar or the clerk of
the court and be applied on the defendant’s behalf towards the
satisfaction of the pecuniary penalty order in the manner provided
by subsection (3).
(2) If after the amount payable under the pecuniary penalty order
has been fully paid any such sums remain in the hands of such a
receiver, the receiver shall distribute those sums among such of
those persons who held property which has been realized under this
part, and in such proportions, as the court may direct after giving a
reasonable opportunity for those persons to make representations to
the court.
(3) property received by the court on account of an amount
payable under a confiscation order shall be applied as follows
(a) if received by him from an administrator under subsection
(1), it shall first be applied in payment of the receiver’s
remuneration and expenses; and
(b) the balance shall be paid or, as the case may be, transferred
to the Government.
Exercise of
91. -(1) The following provisions of this section apply to the
powers of
powers conferred on the court by sections 80, 87, 88 and 89, or on
public trustee
an administrator appointed under section 80 (2) (b) (i) or section 89
(2) (b).
(2) Subject to the following provisions of this section, the
powers shall be exercised with a view to making available for
satisfying the pecuniary penalty order or, as the case may be, any
pecuniary penalty order that may be made in the defendant case
the value for the time being of realizable property held by any
person by the realization of such property.
(3) In the case of realizable property held by a person to whom
the defendant has directly or indirectly made a gift caught by this
part, the powers shall be exercised with a view to realization no more
than the value for the time being of the gift.
(4) The powers shall be exercised with a view to allowing any
person other than the recipient to any such gift to
retain or recover the value of any property held by him or her.
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Money Laundering, Proceeds of Serious and Terrorist Financing 61
(5) An order may be made or other action taken in respect of a
debt owed by the Government.
(6) In exercising the powers referred to in subject (1), no
account shall betaken of any obligations of the defendant or of the
recipient of any gift which conflicts with the obligation to
satisfy the confiscation order or pecuniary penalty order.
92. (1) Where a person who holds realizable property is
Paramountcy
adjudged bankrupt-
of this Part in
(a) property for the time being subject to a restraining order
bankruptcy or
made before the order adjudging him or her bankrupt; and
winding-up
(b) any proceeds of property realized by virtue of section 9 for
the time being in the hands of a person appointed under section
80 (2) (b) (i) or 89 (2),
is excluded from the property of the insolvent for the purposes of
the Bankruptcy Act.
Cap. 11:01
(2) Where a person has been declared bankrupt, the powers
conferred on the court by sections 80 and 89 or on a person
appointed under section 80 () (b) (i) or 89 (2) shall not be exercised
in relation to property for the time being comprised in the property
of the insolvent for the purposes of the Bankruptcy Act.
Cap. 11:01
(3) Where, in the case of a debtor, receiver stands appointed
under the Bankruptcy Act and any property of the debtor is subject
Cap. 11:01
to a restraining order, the powers conferred on the receiver by virtue
of that Act do not apply to property for the time being subject to a
restraining order.
(4) Where a person is declared insolvent and has directly or
indirectly made a gift caught by this Act-
(a) no order shall be made by virtue the Bankruptcy Act in
Cap. 11:01
respect of the making of the gift at any time when the person has
been charged with a serious offence and the proceedings have not
been concluded by the acquittal of the defendant or
discontinuance of the proceedings, or when property of the
person to whom the gift was made is subject to a restraining order
or a charge ordeal; and
(b) any order made under the Bankruptcy Act after the
Cap. 11:01
conclusion of the proceedings shall take into account any
realization under this Act of property held by the person to whom
the gift was made.
93. –(1) Where realizable property is held by a company and
Winding up
an order for the winding up the company has been made or a
of company
resolution has been passed by the company for its voluntary
holding
winding-up, the functions of the liquidator or any provisional
realizable
liquidator shall not be exercisable in relation to-
property
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62 Money Laundering, Proceeds of Serious and Terrorist Financing
(a) property for the time being subject to a restraining order
made before the relevant time; or
(b) any proceeds of property realized by virtue of section 89
(2) (c) or (d) or for the time being in the hands of a person
appointed under section 80 (2) (b) (i) or 89 (2),
but there shall be payable out of such property any expenses,
including the remuneration of the liquidator or provisional
liquidator, property incurred in the winding-up in respect of the
property.
(2) Where, in the case of a company, an order for winding up has
been made or a resolution for winding up has been passed, the
powers conferred on the court by section 80 or 89 shall not be
exercised in relation to any realizable property held by the
company in relation to which the functions of the liquidator are
exercisable-
(a) so as inhibit him form exercising those functions for the
purpose of distributing any property held by the company to the
company’s creditors: or
(b) so as to prevent the payment out of any property of
expenses including the remuneration of the liquidator or any
provisional liquidator property incurred in the winding-up in
respect of the property.
(3) Subsection (2) does not affect the enforcement of a charging
order-
(a) made before the relevant time; or
(b) on property which was subject to a restraining order at the
relevant time.
Cap. 46:03
(4) Nothing in the Companies Act shall be taken as restricting, or
enabling the restriction of the powers conferred on the court by
section 80 or 89.
(5) In this section-
(a) “company” means any company which may be wound-up
Cap. 46:03
under the Companies Act;
(b) “liquidator” includes any person appointed to the office of
liquidator, whether provisionally or otherwise, under the
Companies Act; and
(c) “the relevant time” means-
(i) where no order for the winding-up of the company has
been made, the time of the passing of the resolution for
voluntary winding-up;
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Money Laundering, Proceeds of Serious and Terrorist Financing 63
(ii) where an order for the winding up of a company has
been made and, before the presentation of the petition for the
winding-up of the company by the court, such a resolution had
been passed by the company, the time of the passing of the
resolution; and
(iii) in any other case where an order for the winding up of
a company has been made, the time of the making of the order.
Division 8-Production Orders and other Information
Gathering Powers
94. -(1) Where a person has been charged with or convicted of a
Production
serious crime, and the competent authority or an authorized officer
orders
of the Financial Intelligence Unit has reasonable grounds for sus-
pecting that any person has possession or control of-
(a) a document relevant to identifying, locating or qualifying
property of the person or to identifying or locating a document
necessary for the transfer of property of such person; or
(b) a document relevant to identifying, locating or qualifying
tainted property in relation to the offence or to identifying or
locating a document necessary for the transfer of tainted
property in relation to the offence,
the competent authority may apply ex parte and in writing to a
judge or magistrate in chambers for an order against the person
suspected of having possession or control of a document of the kind
referred to, and the application shall be supported by an affidavit.
(2) The judge or magistrate may, if he or she considers there are
reasonable grounds for so doing, make an order that the person
produce to the competent authority, at a time and place specified in
the order, any documents of the kind referred to in subsection (1):
provided that an order under this subsection may not require the
production of bankers books.
(3) The competent authority to whom documents are produced
may-
(a) inspect the documents;
(b) make copies of the documents; or
(c) retain the documents for so long as is reasonably necessary
for the purposes of this Act.
(4) Where the competent authority retains documents produced to
him or her under subsection (3) he or she shall make a copy of the
documents available to the person who produced them.
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64 Money Laundering, Proceeds of Serious and Terrorist Financing
(5) A person is not entitled to refuse to produce documents
ordered to be produced under this section on the ground that-
(a) the document might tend to incriminate the person or make
him liable to a penalty; or
(b) the production of the document would be in breach of an
obligation, whether imposed by a written law or otherwise, of the
person not to disclose the existence or contents of the document.
Evidential
95. -(1) Where a person produces a document pursuant to an
value of
order under section 94, the production of the document, or any
information
information, document or thing obtained as a direct or indirect
consequence of the production of the document is not admissible
against the person in any criminal proceedings except proceedings
under section 96.
(2) For the purposes of subsection (1), proceedings on an
application for a restraining order, a confiscation order or a
pecuniary penalty orders are not criminal proceedings.
Failure to
96. Where a person is required by a production order to
comply with a
produce a document to the competent authority, the person commits
production
an offence against this section if he-
order
(a) contravenes the order without reasonable cause; or
(b) in purported compliance with the order, produces or makes
available a document known to the person to be false or
misleading in a material particular and does not so indicate to
the competent authority and provide to the competent authority
any correct information of which the person is in possession,
and on conviction shall be liable, in the case of a natural person to
imprisonment for two years and a fine of K100, 000 or, in the case
of a body corporate, a fine of K500, 000.
Production
97. Where a foreign State requests assistance to locate or seize
orders in
property suspected to be tainted property in respect of an offence
relation to
within its jurisdiction and the Attorney General has, under the
foreign
Mutual Assistance in Criminal Matters Act, authorized the giving of
offences
assistance to the foreign State, the provisions of section 94 apply
Cap. 8:04
assistance to the foreign State, the provisions of section 94 apply
mutatis mutandis .
Power to
98. The competent authority may, with the consent of the
search for
occupier of the land or the premises, or under warrant issued under
and seize
section 99-
documents
relevant to
locating
(a) enter upon land or upon or into premises;
property
(b) search the land or premises for any document of the type
described in section 94 (1); and
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Money Laundering, Proceeds of Serious and Terrorist Financing 65
(c) seize any document found in the course of the search
that the competent authority believes, on
reasonable grounds, to be a relevant document in relationn to a
serious crime.
99. -(1) Where-
Search
warrant for
(a) a person has been charged or convicted of serious crime;
location
or
of documents
relevant to
(b) the competent authority has reasonable grounds for
locating
suspecting that there is, or may be within the next seventy-two
property
hours, upon any land or upon or in any premises, a document of
the type described in section 94 (1) in relation to the offence,
the competent authority may make application supported by infor-
mation on oath to a magistrate or judge for a search warrant in
respect of the land or those premises.
(2) Where an application is made under subsection (1) for a
warrant to search land or premises, the magistrate or judge may,
subject to subsection (4), issue a warrant authorizing competent
authority, with such assistance and by such force as is necessary and
reasonable-
(a) to enter upon the land or in or upon any premises and to
Search the land or premises for property of that kind; and
(b) to seize property found in the course of the search that the
Competent authority believes on reasonable grounds to be
property of that kind.
(3) A magistrate or judge shall not issue a warrant under
subsection (2) unless he or she is satisfied that-
(a) a production order has been given in respect of the
document and has not been complied with;
(b) a production order in respect of the document would
be unlikely to be effective;
(c) the investigation for the purpose of which the search
warrant is being sought might be seriously prejudiced if the
competent authority does not gain immediate access to the
document without any notice to any person; or
(d) the document involved cannot be identified or described
with sufficient particularity to enable a production order to be
obtained.
(4) A warrant issued under this section shall state-
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66 Money Laundering, Proceeds of Serious and Terrorist Financing
(a) the purpose for which it is issued, including a reference to
the nature of the relevant offence;
(b) a description of the kind of documents authorized to be
seized;
(c) a time at which the warrant ceases to be in force; and
(d) whether entry is authorized to be made at any time of the
day or night or during specified hours.
(5) If during the course of searching under a warrant issued under
this section, the competent authority finds-
(a) a document of the type described in section 94 (1) that
the police officer believes on reasonable grounds to relate to the
relevant offence or to another indictable offence; or
(b) anything the competent authority believes on reasonable
grounds will afford evidence as to the commission of a criminal
offence,
the competent authority may seize that property or thing and the
warrant shall be deemed to authorize such seizure.
Search
100. Where a foreign state requests assistance to locate or seize
warrants in
property suspected to be tainted property in respect of an offence
relation to
within its jurisdiction and the Attorney General has, under the
foreign
Mutual Assistance in Criminal Matters Act, authorized the giving of
offences
assistance to the foreign state, the provisions of section 99 apply
Cap. 8:04
mutatis-mutandis.
Division 8-Monitoring orders
Monitoring
101. -(1) The competent authority may apply, ex parte and in
orders
writing to a judge or magistrate in chambers for an order (in this
section otherwise called a “monitoring order”) directing a
financial institution to give information to a police officer or an
authorized officer of the Financial Intelligence Unit, and the
application shall be supported by an affidavit.
(2) A monitoring order shall-
(a) direct a financial institution to disclose information
obtained by the institution about transactions conducted through
an account held by a particular person with the institution;
(b) not have retrospective effect; and
(c) only apply for a period of a maximum of three months from
the date of the making of the order.
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Money Laundering, Proceeds of Serious and Terrorist Financing 67
(3) A judge or magistrate shall not issue a monitoring order
unless he or she is satisfied that there are reasonable grounds for
suspecting that the person in respect of whose account the order is
sought-
(a) has committed or was involved in the commission, or is
about to commit or be involved in the commission of, a serious
crime; or
(b) has benefited directly or indirectly, or is about to benefit
directly or indirectly from the commission of a serious crime.
(4) A monitoring order shall specify-
(a) the name or names in which the account is believed to be
held; and
(b) the class of information that the institution is required to
give.
(5) Where a financial institution, which has been given notice of
a monitoring order, knowingly-
(a) contravenes the order, or
(b) provides false or misleading information in purported
compliance with the order,
the institution commits an offence and shall be liable on conviction,
in the case of a natural person, to imprisonment for two years and a
fine of K100, 000 and, in the case of a body corporate, to a fine of
K500, 000.
102. –(1) A financial institution that is, or has been, subject to a
Monitoring
monitoring order shall not disclose the existence or operation of the
orders not to
order to any person except-
be disclosed
(a) an officer or agent of the institution for the purpose of
ensuring compliance with order;
(b) a legal adviser for the purpose of obtaining legal advice or
representation in respect of the order; or
(c) a police officer or an authorized officer of the Financial
Intelligence Unit authorized in writing to receive the information.
(2) Any person who contravenes subsection (1) is guilty of an
offence and shall be liable on conviction-
(a) in the case of a natural person, to imprisonment for two
years and a fine K100, 000.
(b) in the case of a corporation, to a fine K500, 000.
(3) A person described in subsection (1) shall not disclose the
existence or operation of a monitoring order except to another
person described in that subsection and may do so only for the
purposes of the performance of the person’s duties or functions.
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68 Money Laundering, Proceeds of Serious and Terrorist Financing
(4) Any person who contravenes subsection (1) is guilty of an
offence and liable to imprisonment for two years and a fine of
K100, 000.
(5) Nothing in this section prevents the disclosure of information
concerning a monitoring order for the purpose of, or in connection
with, legal proceedings or in the course of proceedings before a
court:
provided that nothing in this section shall be construed as
requiring a legal practitioner to disclose to any court the existence
or operation of a monitoring order.
P ART VI-M ISCELLANEOUS
Money
103. For the purpose of any law relating to extradition of
laundering
fugitive offenders, money laundering and financing of terrorism
and financing
shall be offences for which extradition or rendition may be granted.
of terrorism
offences for
extradition
purposes
104. - (1) Where for the investigation or prosecution of a
mutual
serious offence or a money laundering offence or a financing of
assistance
terrorism offence or for the making or execution of any order or
direction made under this Act in respect of such offences, any
assistance in Criminal Matters Act, may in accordance with
Cap. 8:04
that Act request mutual assistance from that designated
country as if such investigation, prosecution, making or execution
is a criminal matter within the meaning of that Act.
(2) Where a request is made by a foreign state in the
investigation or prosecution of a serious offence, a money laundering
offence or a terrorist financing offence in that country or for the
making or execution of any order or direction made in that country
in respect of such an offence, the Ministry may in accordance with
Cap. 8:04
the Mutual Assistance in Criminal Matters Act, provide such
assistance as if such investigation, prosecution, making or
execution is a criminal matter within the meaning of that Act.
Regulations
105. The Ministry may make regulations for carrying the
purpose and provisions of this Act into effect and prescribing all
matters which are necessary or convenient to be prescribed for the
better carrying out of the provisions of Act
68
Money Laundering, Proceeds of Serious and Terrorist Financing 69
FIRST SCHEDULE (s.2)
UNITED NATIONS COUNTER-TERRORISM CONVENTIONS
Convention on Offences and Certain Other Acts committed on Board aircraft,
Signed at Tokyo on 14 September, 1963
th
Convention for the Suppression of Unlawful Seizure of Aircraft, done at the
Hague 16 December, 1970
th
Convection for the Suppression of Unlawful Acts Against the Safety of Civil
Aviation, done at Montreal on 23 September, 1971
rd
Convention on the Prevention and Punishment of Crimes Against
Internationally Protected Persons, including Diplomatic Agents, adopted by the
General Assembly of the United Nations on 14 December, 1973
th
International convention against the Taking of Hostages, adopted by the
General Assembly of the United Nations on 17 December, 1979
th
Convention on the Physical Protection of Nuclear Material, adopted at Vienna
On 3 March, 1980
rd
Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving
International Civic Aviation, supplementary to the Convention for the
Suppression of Unlawful Acts against the Safety of Civic Aviation, done at
Montreal on 24 , February, 1988
th
Convention for the Suppression of Unlawful Acts against the Safety of
Maritime Navigation, done at Rome on 10 March, 1988
th
Convention on the Suppression of Unlawful Acts against the Safety of Fixed
Platforms located on the Continental Shelf, done at Rome on 10 March, 1988
th
Convention on the Making of Plastic Explosives for the purpose of
Detention, signed at Montreal, on 1 March, 1991
st
International Convention for the Suppression of Terrorist Bombings, adopted
By the General Assembly of the United Nations on 15 December, 1997
th
International Convention for the Suppression of the Financing of Terrorism,
Adopted by the General Assembly of the United Nations on 9 December, 1999.
th
Second schedule(s 22)
OATH of CONFIDENNTIALITY
I, ………………………………………………having been appointed as an
Employee of the Financial Intelligence Unit or an agent in the service of the
Financial Intelligence Unit do solemnly swear that I will not, directly, or
Indirectly divulge the business or proceedings of the Financial Intelligence Unit
Or the nature or contents of any document communicated to me any matter
69
70 Money Laundering, Proceeds of Serious and Terrorist Financing
coming to my knowledge in my capacity as an employee of the Financial
Intelligence Unit or an agent in the service of the Financial Intelligence Unit and
That I will and truly perform the functions and duties of that office.
So help me God.
SWORN at…………………………………………
……………………………….
Signature of Deponent
This …………………..day of …………………………………………………………
Before me: ……………………………………………………………………………..
Commissioner for Oaths
Passed in parliament this fourth day of August, two thousand and six.
M. M. Katopola
Clerk of Parliament
70