VZCZCXRO0468
RR RUEHDU RUEHJO RUEHMR
DE RUEHLG #0273 0831043
ZNR UUUUU ZZH
R 241043Z MAR 06
FM AMEMBASSY LILONGWE
TO RUEHC/SECSTATE WASHDC 2549
INFO RUEATRS/DEPT OF TREASURY WASHDC 0439
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0196
RUEHFR/AMEMBASSY PARIS 0088
RUEAIIA/CIA WASHDC

UNCLAS LILONGWE 000273 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/S, INR/AA 
USAID FOR AFR/SA, PPC/AA 
TREASURY FOR INTERNATIONAL AFFAIRS/AFRICA/BEN CUSHMAN 
 
PARIS FOR D'ELIA 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM EAID EFIN ETRD PREL MI
SUBJECT: PARLIAMENT SET TO PASS ANTI-MONEY LAUNDERING BILL 
 
REF: LILONGWE 66 
 
¶1. Summary: Post's efforts to promote passage of anti-money 
laundering (AML) legislation appear to be bearing fruit. 
Legislators signaled their intention this week to pass the 
bill in next month's parliamentary session, and are working 
with government to resolve their remaining issues with the 
bill.  End summary. 
 
¶2. Following a Mission-sponsored seminar in January for key 
decision makers (reftel), the Malawi parliamentary legal 
affairs committee this week organized its own AML workshop, 
with assistance from USAID.  Millennium Challenge-funded U.S. 
Treasury and Justice Department representatives Carol Kelley 
and Susan Smith served as expert advisors to the Committee. 
Kelley and Smith outlined the importance of the legislation 
for bringing Malawi into line with international norms, and 
explained to parliamentarians how an AML regime works in 
practice in other countries.  They also offered ideas for 
further changes to the draft bill that would bring it in line 
with the intent of parliament as well as best practices.  The 
parliamentarians then held discussions with government 
representatives to clarify a number of issues. 
 
¶3. The proposed legislation will establish a regulatory regime 
for reporting suspicious transactions of money laundering and 
terrorist financing; create a financial intelligence unit 
(FIU) to analyze those reports; and establish confiscation 
procedures.  Parliamentarians and government representatives 
participating in the seminar expressed optimism that the draft 
bill would be enacted as early as the April session. 
 
¶3. Among the issues discussed in depth were the type of FIU 
that Malawi would create, the location of that unit, and the 
process of appointment and dismissal for its director.  As 
reported in reftel, the FIU is a sensitive issue, given 
Malawi's history of abuse of a forfeiture law under the Banda 
dictatorship. 
 
¶4. Parliamentarians reached consensus that the FIU should be 
employ an "administrative" rather than a "law enforcement" 
model, i.e., that the FIU would collect and analyze 
intelligence and then hand it over to police for further 
investigation, arrest and prosecution.  They also supported 
the view that the FIU should be an independent agency of 
government, and not be attached to another government 
ministry, and the FIU director should be nominated by the 
president and confirmed by the parliamentary public 
appointments committee. 
 
¶5. This new legislation will require harmonization with 
revisions to Malawi's penal code (slated for amendment during 
this parliamentary session) and draft terrorism legislation. 
Our Millennium Challenge advisors will continue to work with 
the parliamentary draftsman and key committee members to 
provide advice on refining the texts. 
 
GILMOUR