Central Africa’s Financial System Exposed to Money Laundering and Terrorist Financing Risks
The Task Force on Anti-Money Laundering in Central Africa (GABAC) has raised concerns about the vulnerabilities of the region’s financial system to money laundering and terrorist financing. GABAC, a specialized institution of the Central African Economic and Monetary Community (CEMAC), is responsible for promoting norms and standards to combat these threats.
Vulnerabilities in AML/CFT Systems
In its latest report, GABAC highlighted the need for member states to strengthen their anti-money laundering and combating the financing of terrorism (AML/CFT) systems. The organization evaluated the AML/CFT systems of several member states, including Cameroon, Congo, and Gabon, and identified areas of concern.
- Lack of effective measures to prevent money laundering and terrorist financing
- Inadequate regulations and lack of effective supervision
“We are concerned about the lack of effective measures to prevent money laundering and terrorist financing in some member states,” said a GABAC official. “The region’s financial system is exposed to significant risks, which can have serious consequences for the stability of the economy.”
IMF Warning
Experts from the International Monetary Fund (IMF) also warned that the region’s financial sector is vulnerable to money laundering and terrorist financing due to inadequate regulations and lack of effective supervision.
“The Central African region has a history of corruption and weak governance, which creates an environment conducive to money laundering and terrorist financing,” said an IMF official. “It is essential for member states to strengthen their AML/CFT systems and implement effective measures to prevent these threats.”
Need for Cooperation
GABAC’s report also highlighted the need for greater cooperation among member states to combat these threats. The organization has called on member states to share information and best practices to improve the effectiveness of their AML/CFT systems.
Member States’ Responses
In response to the concerns raised by GABAC, several member states have announced plans to strengthen their AML/CFT systems. Cameroon, for example, has launched a national plan to combat money laundering and terrorist financing, while Congo has established a new agency responsible for supervising financial institutions.
The Central African Region
The Central African region is home to several major financial centers, including the Central African Republic (CAR), Chad, Democratic Republic of Congo (DRC), Equatorial Guinea, Gabon, Cameroon, Republic of Congo, and São Tomé and Principe. The region’s financial system is dominated by the CFA Franc (CFA F), a common currency used in several member states.
GABAC and the Fight Against Money Laundering
GABAC was established in 2015 as a FATF-style Regional Body (FSRB) to promote norms and standards for combating money laundering, terrorist financing, and proliferation of weapons of mass destruction. The organization has conducted several mutual evaluations of its member states’ AML/CFT systems and has identified areas of concern that need to be addressed.
Conclusion
GABAC’s report highlights the need for greater cooperation among member states to combat money laundering and terrorist financing. The organization has called on member states to strengthen their AML/CFT systems and implement effective measures to prevent these threats. The Central African region’s financial system is exposed to significant risks, which can have serious consequences for the stability of the economy. It is essential for member states to work together to address these concerns and promote a stable and secure financial system in the region.