Africa-Press – Mozambique. The decision establishes “transactional limits applicable to electronic currency institutions” and requires institutions to classify their clients “based on risk assessment.” Clients of Mozambican Electronic Currency Institutions (IME), which operate through mobile telecommunications operators, will have transaction limits starting at the end of the month for the prevention and combating of money laundering and terrorism.
The decision is outlined in a notice from the Bank of Mozambique dated April 1, which comes into effect after 30 days, as consulted by Lusa this Thursday. It establishes “transactional limits applicable to electronic currency institutions” based on the type of client.
The measure is justified in the same notice by the “need to guide the actions of IMEs and strengthen measures to prevent and combat money laundering, terrorism financing, and the proliferation of weapons of mass destruction, considering international best practices.” The notice obliges IMEs to classify their clients “based on risk assessment” into three levels.
Level I refers to “clients subject to simplified measures of identification, verification, and due diligence, based on their low risk, which will now have limits such as a maximum account balance of 200,000 meticais (2,915 euros), the same value as the daily limit for transfers and withdrawals, up to an annual maximum of 500,000 meticais (7,290 euros) in transfers, and 40,000 meticais (583 euros) per transfer and transaction.
Level II will be assigned to clients “for whom standard or enhanced identification, verification, and due diligence measures are adopted, provided that they fall within transactional limits,” which are a maximum account balance of 500,000 meticais (7,290 euros), the same value as the daily limit for transfers and withdrawals, and 75,000 meticais (1,094 euros) per transfer and transaction.
Level III corresponds to micro and small businesses, “as defined in the Commercial Code, for which standard or enhanced identification, verification, and due diligence measures are adopted, in accordance with the conditions provided for in legislation on money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction.”
In this case, they will have limits such as a maximum account balance of three million meticais (43,750 euros), the same value as the daily limit for transfers and withdrawals, without further restrictions.
Medium and large companies, as defined in the Commercial Code, and organs and institutions of the Public Administration are excluded from these limits.
Mozambican authorities classified the IME sector as having a “high” threat level in terrorism financing, according to a government report released on March 20 by Lusa. “The threat level of the electronic currency sector for terrorism financing in the country is high,” reads the National Terrorism Financing Risk Assessment Report.
The document also acknowledges “excessive movement of funds to areas of active terrorist threat using electronic currency institutions” operating in Mozambique, noting it is “concentrated in rural areas with limited access to the national banking network.”
“For this reason, there is a preference for the use of electronic currency institutions, given the ease of use and quick movement of funds it provides. These factors combined precipitate and make the abuse of this sector by terrorism sympathizers appealing. Given the existence of population clusters residing and engaging in social, commercial, among other activities, in regions with active terrorist threats, it allows terrorists and terrorism sympathizers to abuse the services of electronic currency institutions for fund movement,” it further reads.
The report points out that the value of IME assets stood at 16.940 billion meticais (243.2 million euros) in September 2023, with accumulated social capital at 2.004 billion meticais (28.7 million euros).
In February, Lusa reported that the number of IME agents in Mozambique providing transfers, purchases, withdrawals, and deposits through mobile telecommunications operators increased by 10.5% in three months, to 224,704 in December, already covering all 154 districts of the country.
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