Financial Crime World

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SAO TOME AND PRINCIPE: A COMPREHENSIVE LOOK AT ANTI-MONEY LAUNDERING REGULATIONS

Sao Tome and Principe has implemented anti-money laundering regulations to combat money laundering and terrorist financing, meeting some of the technical requirements set by the Financial Action Task Force (FATF). However, a closer examination reveals areas where improvement is needed.

Progress Made

According to the latest Benin Follow-Up Report 2023, Sao Tome and Principe has made progress in implementing FATF recommendations. The country has:

  • Largely complied with requirements on assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Money laundering offence (R.3)
  • Confiscation and provisional measures (R.4)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)

Areas for Improvement

However, the report highlights areas where Sao Tome and Principe still falls short:

  • Partially complied with requirements on:
    • Confiscation and provisional measures (R.4)
    • Terrorist financing offence (R.5)
    • Customer due diligence (R.10)
    • Record keeping (R.11)
    • Internal controls and foreign branches and subsidiaries (R.18)
  • Not fully implemented requirements on:
    • Non-profit organisations (R.8)
    • Financial institution secrecy laws (R.9)
    • Money or value transfer services (R.14)
    • New technologies (R.15)
    • Wire transfers (R.16)
    • DNFBPs: Customer due diligence (R.22)
    • DNFBPs: Other measures (R.23)
    • Transparency and beneficial ownership of legal persons (R.24)
    • Transparency and beneficial ownership of legal arrangements (R.25)
    • Regulation and supervision of financial institutions (R.26)
    • Regulation and supervision of DNFBPs (R.28)

Positive Developments

Despite these shortcomings, Sao Tome and Principe has made significant progress in other areas:

  • Fully complied with requirements on:
    • Tipping-off and confidentiality (R.21)
    • Powers of supervisors (R.27)
    • Financial intelligence units (R.29)
    • Responsibilities of law enforcement and investigative authorities (R.30)
    • Powers of law enforcement and investigative authorities (R.31)

Conclusion

The report concludes that Sao Tome and Principe’s anti-money laundering regulations require further strengthening to meet FATF standards. The country must work to address the identified shortcomings and improve its regulatory framework to effectively combat money laundering and terrorist financing.