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Comoros Fails to Meet Anti-Money Laundering and Countering Terrorism Standards

Comoros, a member of the Intergovernmental Action Group against Money Laundering in West Africa (GIABA), has been criticized for its weak anti-money laundering and combating the financing of terrorism (AML/CFT) regime. According to a report by GIABA, Comoros’ laws and implementation mechanisms are inadequate, leading to a lack of investigations and convictions for money laundering and terrorism financing.

Declarations and Sanctions

The Government of Comoros has made declarations on its intentions to strengthen the legal framework and implement recommendations from GIABA. However, the report highlights several shortcomings in the country’s AML/CFT regime, including:

  • Weaknesses in the Penal Code, which fails to adequately criminalize money laundering, financing of terrorism, and other related offenses.
  • Lack of effective implementation of AML/CFT requirements by financial institutions and public administration.
  • Inadequate reporting of suspicious transactions and lack of information on beneficial ownership.

Failure to Meet Requirements

Comoros has failed to meet the requirements set out by GIABA, including:

  • Failing to amend the Penal Code to adequately criminalize money laundering and financing of terrorism.
  • Not strengthening customer due diligence requirements and record-keeping obligations.
  • Not reporting suspicious transactions related to money laundering and corruption.

Call for Action

The International Monetary Fund (IMF) urges Comoros to take immediate action to address these shortcomings. The authorities should:

  • Amend the Penal Code to strengthen laws against money laundering and financing of terrorism.
  • Strengthen implementation of AML/CFT requirements by financial institutions and public administration.
  • Enhance capacity building for the Financial Research Service, which oversees implementation of AML/CFT laws.

Declarations of Senior Officials

In response to these findings, senior officials from Comoros have made declarations on their intentions to strengthen the country’s AML/CFT regime. However, the report highlights a lack of concrete actions taken to address these shortcomings.

Strengthening Administrative Arrangements

The IMF also recommends strengthening administrative arrangements for the agency responsible for processing, verifying, and enforcing asset declarations. This includes efforts to establish an institution to replace the former National Commission for Preventing and Fighting Corruption.

Economic Citizenship Program

The report also highlights concerns over Comoros’ Economic Citizenship Program, which has contributed negatively to corruption perceptions. The authorities are urged to clarify the legal status of the program, the number of citizenships granted, and the revenue that should have accrued to the government budget.

Next Steps

Comoros is expected to promulgate a revised Penal Code by end-April 2020, in light of the next GIABA plenary in May 2020. The authorities are urged to substantially strengthen their efforts in addressing AML/CFT deficiencies and ensure the effectiveness of the national AML/CFT regime.

Verification of Accuracy

The report has been verified for accuracy by the IMF and is based on information provided by Comoros’ authorities and GIABA. The findings are intended to provide a comprehensive assessment of Comoros’ AML/CFT regime and inform efforts to strengthen its anti-corruption mechanisms.