Evaluating Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Systems in the Central African Republic

Evaluation of AML/CFT System

The evaluation report on the AML/CFT systems in the Central African Republic highlights several key areas for improvement.

Understanding of ML/TF Risks among DNFBPs

• The understanding of money laundering and terrorist financing risks is diverse, with most designated non-financial businesses and professions (DNFBPs) being unaware of their AML/CFT duties.
• There is a lack of awareness and education on the importance of AML/CFT regulations.

Regulation of Virtual Assets

• There are no specific implementing measures to regulate the activities of virtual assets (VAs), exposing them to high money laundering and terrorist financing risks.

Control and Supervision System

• The evaluation highlighted shortcomings in the control and supervision system for financial institutions and DNFBPs, including inadequate due diligence on beneficial owners.
• There is a lack of competent authorities designated to monitor non-compliance with AML/CFT obligations among DNFBPs.

Risks and General Situation

The Central African Republic faces significant security and political challenges that have hindered economic and social development. The country is exposed to a range of money laundering and terrorist financing risks, including:

• Misappropriation of public funds
• Illicit trafficking in precious stones and metals
• Drug trafficking
• Corruption
• Human trafficking

Areas for Improvement

The report highlights several areas for improvement, including:

• Strengthening AML/CFT Regulations: Improving the understanding and implementation of AML/CFT regulations among DNFBPs.
• Enhancing Transparency: Enhancing the transparency of legal entities and arrangements to prevent their misuse for money laundering and terrorist financing purposes.
• Improving Control and Supervision: Improving the control and supervision system for financial institutions and DNFBPs.
• Establishing a Centralized System: Establishing a centralized system for archiving and managing files related to mutual legal assistance and extradition.

Conclusion

The report emphasizes the need for the Central African Republic to strengthen its AML/CFT systems and address the significant security and political challenges it faces. By implementing these recommendations, CAR can better mitigate money laundering and terrorist financing risks and promote a safer and more stable financial environment.