Cape Verde Adopts Risk-Based Approach to Anti-Money Laundering Efforts
Strengthening Anti-Money Laundering Measures
Banco de Cabo Verde has joined forces with national authorities and international partners to enhance its anti-money laundering (AML) measures, adopting a risk-based approach to prevent the scourge of money laundering and terrorist financing. This initiative is part of Cape Verde’s commitment to comply with Recommendation 1 of the Financial Action Task Force (FATF).
Conducting National Money Laundering and Terrorist Financing Risk Assessment
The first National Money Laundering and Terrorist Financing Risk Assessment (ANR) exercise was conducted in partnership with the World Bank, involving national public and private entities with a relevant role in preventing money laundering and terrorist financing. Banco de Cabo Verde participated in two working groups:
- One focused on the banking, insurance, and securities market sectors
- Another examining other financial institutions
The risk assessment aimed to identify, assess, and understand the money laundering and terrorist financing risks facing Cape Verde, enabling the country to apply a proportionate response.
Benefits of Risk-Based Approach
This approach ensures that resources are allocated efficiently to address the most significant threats. By adopting this strategy, Banco de Cabo Verde and Cape Verdean authorities aim to create a more efficient plan for preventing and repressing illicit activities.
Compliance with International Standards
The initiative is also part of Cape Verde’s efforts to comply with new international standards. In 2017, the country underwent its second mutual evaluation by the Intergovernmental Action Group against Money Laundering in West Africa (GIABA), which examined its technical compliance with FATF’s 40 Recommendations and effective application.
Progress and Monitoring
The exercise builds on previous evaluations, including a 2007 GIABA mutual evaluation that identified areas for improvement. Since then, Cape Verde has updated its information annually through monitoring reports, with biannual reporting introduced in 2015 to reflect the country’s progress.
By adopting a risk-based approach, Banco de Cabo Verde and Cape Verdean authorities can optimize efforts against money laundering and terrorist financing, ensuring that scarce resources are used effectively to address the most pressing risks facing the country.