Financial Crime World

Angola’s Journey Towards Financial Compliance: Overcoming De-Risking Challenges

Angola, known for its commitment to upholding global standards against money laundering and terrorist financing, has made significant strides in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) regulations.

Substantial Progress towards AML/CFT Regulations

  • In early 2016, the Financial Action Task Force (FATF) conducted an assessment, acknowledging substantial progress in Angola’s legal and regulatory framework
  • Angola was removed from FATF’s list of high-risk jurisdictions, demonstrating the effectiveness of their efforts

The Rise of De-Risking

  • Despite this progress, the banking sector in Angola faces a new challenge: de-risking
  • This phenomenon occurs when correspondent banks, primarily located in Western countries, decline transactions with respondent banks based in high-risk jurisdictions due to regulatory pressures leading to significant fines
  • Between 2010 and 2015, banks faced billions of dollars in fines as a result, causing many countries - including Angola - to be excluded from the international financial system

Consequences of De-Risking in Angola

  • Angola has suffered consequences of this trend in US dollar-denominated bank correspondences, further limiting dollar transaction capabilities

Reversing the Trend: Improving the Angolan Financial System’s Risk Profile

  • Angola is taking multiple actions to improve the perception of its financial system’s risk profile
  • Public recognition from FATF of these improvements is helping to restore confidence in the Angolan banking sector

The Angolan Bankers Association’s Response

  • In Q3 2016, the Angolan Bankers Association (ABANC) established a Task Force
  • The Task Force consists of five compliance and anti-money laundering experts
  • The creation of the Task Force demonstrates Angola’s ongoing commitment to enhancing effective AML/CFT compliance

Pressing Challenges Ahead

  • Despite these efforts, continued advancement and alignment with international best practices are required to address the significant challenges ahead