SALE OF VEHICLES / PAYMENT IN CASH INCREASES RISK OF MONEY LAUNDERING
Maputo, 05 Dec (AIM) – Informality and payment in cash to purchase vehicles have been increasing the risk of money laundering in Mozambique, which is why it is necessary to strengthen mechanisms to control car sales centres.
“It is necessary to strengthen the control of car sales centres that proliferate in our society, because they are involved in fraud and tax evasion”, said the Director of Legal Services and Cooperation of the Mozambican Financial Intelligence Office (GIFIM), Paulo Munguambe, on Monday at the launch of International Anti-Corruption Day.
Speaking to the audience on a panel on “The Risk of Money Laundering Associated with the Sale of Used Vehicles and Preventive Measures”, Munguambe said that Mozambique is “on the grey list” because it does not respond to international measures to combat money laundering.
Using the National Risk Assessment Report (2020-2021), Munguambe said “this sector is vulnerable due to lack of regulation and control, and in this case, the country is at high risk of money laundering. This activity generates more resources to be laundered.”
“Mozambique, in the framework of international obligations and recommendations to prevent and combat corruption, has a low rating. That is, Mozambique has a low level of effectiveness” the director said.
For better oversight, according to Munguambe, there is a need to assess the risks of money laundering and the financing of terrorism in order to understand the vulnerabilities, strengths and weaknesses of these phenomena.
“We have to improve the system of effectiveness, and, in this case, we have to pay attention to the buying and selling of vehicles”, he said, recalling that “the rules say that the authorities must carry out a national assessment of the risks.”
The new law on Prevention of Money Laundering, Terrorist Financing and Weapons of Mass Destruction, argues the director, will strengthen and establish accurate rules for the sector.
“The law states that all sellers of vehicles must comply with these requirements: do due diligence and know the customer properly”, he stressed.
Also according to Munguambe, Mozambique currently has 1,414 business entities engaged in the sale of vehicles, of which 16 are dedicated to the sale of new vehicles (zero kilometre) and 1,398 to the sale of used cars.
“The launderers use the luxury vehicles, sold by the 16 dealerships, to keep money. They buy the luxury vehicles, which do not depreciate easily, to disguise it. Then they sell them,” he said, adding that money laundering is always related to a previous crime that generates repercussions that need to be camouflaged.
According to Munguambe, for better monitoring of money laundering cases, international regulators have to know “how many inspections, how many recommendations and how many sanctions have been applied in Mozambique against money launderers.”
“All this is organized in statistics to show that there is effectiveness in our system”, he stressed.