News Desk
In a major move to curb human trafficking and black market financial flows, the Ministry of Homeland Security has amended the foreign employment regulations, making it mandatory for all employers to deposit expatriate wages directly into bank accounts opened in the workers’ names.
Employers have been given a one-month deadline from the gazetting of the new rule to transition all foreign staff salaries to the banking system.
While this requirement was originally introduced under a 2016 amendment to the Employment Act—primarily intended to enforce a 3 percent remittance tax on money sent overseas—implementation completely stalled. The sharp rise in undocumented workers and logistical hurdles in opening bank accounts meant enforcement and penalties were quietly shelved for years.
As a result, a massive cash-based shadow economy flourished in the Maldives, allowing untraceable money transfers abroad and opening wide doors for financial crimes and money laundering.
Officials expect this regulatory shift to bolster broader efforts by President Muizzu’s administration to resolve the expatriate crisis, particularly addressing systemic human trafficking issues in the construction sector dating back to 2018.
Moving all expatriate payroll transactions into the formal banking system aims to achieve three core targets:
- Blocking Illicit Cash Flows: Drastically cutting untraceable cash operations to ensure transparency across the financial sector.
- Tightening Money Laundering Controls: Giving state financial monitoring units full visibility into the origins and outflow of funds leaving the country.
- Protecting Worker Rights: Ensuring foreign employees receive their full salaries on time while curbing financial exploitation by unscrupulous employers.
While critics point out that this intervention comes years after the problem took root, financial authorities view the enforcement as a critical turning point. Moving billions out of paper bags and into verified accounts will stabilize the banking system—though full success still hinges on how aggressively the Homeland Security Ministry tackles the underlying human trafficking networks driving the illegal labor market.
