Financial Crime World

Cabo Verde Falls Short on Anti-Money Laundering and Terrorist Financing Efforts

FATF Evaluation Reveals Key Areas of Improvement

A recent evaluation by the Financial Action Task Force (FATF) has highlighted several key areas where Cabo Verde needs to improve its efforts in combating money laundering and terrorist financing. The report underscores the importance of effective anti-money laundering and combating the financing of terrorism (AML/CFT) policies, which are critical for preventing financial crimes.

Lack of Coordination Mechanism

  • Cabo Verde lacks a designated authority or coordination mechanism responsible for AML/CFT policies.
  • This lack of coordination has led to confusion among reporting entities and supervisory authorities, making it difficult to implement effective AML/CFT programs.
  • DNFBPs (designated non-financial businesses and professions) are struggling to meet their reporting requirements under the country’s AML/CFT program due to inadequate resources.

Insufficient Human and Technical Resources

  • Supervisory and regulatory authorities in Cabo Verde are not adequately equipped with the necessary human and technical resources to implement their AML/CFT obligations.
  • This lack of resources has hindered the ability of supervisory authorities to conduct risk-based AML/CFT supervision and identify potential ML/TF risks in the country.

Limited Information Sharing

  • Cabo Verde lacks effective mechanisms for providing DNFBPs with the necessary information to meet their AML/CFT requirements.
  • This limited information sharing has hindered the ability of supervisory authorities to conduct risk-based AML/CFT supervision and identify potential ML/TF risks in the country.

Other Areas of Improvement

  • The report highlights several other areas where Cabo Verde needs to improve its AML/CFT efforts, including:
    • Developing a comprehensive CFT strategy to address issues related to geographical proximity with high-risk zones.
    • Absence of any national focus on this issue.

Ratings and Recommendations

  • The FATF evaluation assigned low ratings to Cabo Verde’s effectiveness in combating money laundering and terrorist financing, citing weaknesses in several areas, including:
    • Risk assessment
    • International cooperation
    • Supervision
    • Preventive measures
    • Legal persons and arrangements
    • Financial intelligence
    • ML investigation and prosecution
    • TF investigation and prosecution
    • Proliferation financing
  • The report recommends that Cabo Verde strengthen its AML/CFT system to prevent money laundering and terrorist financing.

Technical Compliance

  • Cabo Verde has made some progress in terms of technical compliance, but still faces challenges in several areas.
  • The country’s AML/CFT framework is partially compliant with FATF standards, with some recommendations being largely or non-compliant.

Evaluation Team

  • The evaluation was conducted by a team of experts from Guinea-Bissau, Sao Tome and Principe, Angola, Portugal, and the GIABA Secretariat.

Overall, the FATF evaluation highlights the need for Cabo Verde to strengthen its AML/CFT system to prevent money laundering and terrorist financing.