Financial Crime World

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Sao Tome and Principe: Banking Regulations on Anti-Money Laundering Fall Short, Experts Say

According to a recent report, Sao Tome and Principe’s efforts to combat money laundering and terrorist financing have been deemed insufficient by international experts. The country’s banking regulations lack key measures to prevent the misuse of financial systems.

Report Highlights

The report, which assessed Sao Tome and Principe’s compliance with anti-money laundering (AML) recommendations from the Financial Action Task Force (FATF), found that the country is only “partially compliant” in several areas. Specifically:

  • The country lacks effective regulations on non-profit organizations.
  • It fails to implement measures to prevent the misuse of new technologies.

Positive Aspects

While Sao Tome and Principe scored well on some aspects, including:

  • Laws criminalizing money laundering and terrorist financing
  • Efforts to share information with international partners

Experts noted that the country’s financial institutions lack adequate internal controls, and there is a lack of transparency in the ownership structure of companies.

Concerns and Recommendations

The report also highlighted concerns over Sao Tome and Principe’s ability to:

  • Prevent the misuse of correspondent banking relationships
  • Detect and report suspicious transactions

Additionally, experts noted that the country’s financial intelligence unit does not have sufficient resources or powers to effectively combat money laundering and terrorist financing.

FATF Recommendations

The FATF recommendations provide a set of international standards for countries to follow in order to prevent the misuse of their financial systems. Compliance with these standards is essential to preventing the laundering of proceeds from illegal activities, such as drug trafficking and terrorism.

Call to Action

Sao Tome and Principe’s government has been urged to take immediate action to address these weaknesses and bring its AML regulations in line with international standards. Failure to do so could result in the country being placed on a list of jurisdictions considered to be non-cooperative in the fight against money laundering and terrorist financing.

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