Financial Crime World

Comoros Seeks to Improve Business Climate and Combat Corruption

The Union of Comoros has identified several key areas for reform to boost its economic prospects and attract foreign investment. According to a recent report by the International Monetary Fund (IMF), the country’s business climate is hindered by inadequate contract enforcement, weak protection of minority investors, and limited access to credit.

Addressing Challenges

  • Strengthening the effectiveness of the judiciary in protecting property rights and enforcing contracts
    • Seeking outside expertise to diagnose systemic issues within the judicial system
    • Increasing funding for courts
    • Implementing lay judge systems to complement professional judges
  • Creating an enabling environment for private investment through regulatory reform
    • Improving Comoros’ ranking in the World Bank’s Doing Business index from 160th to 150th out of 190 countries by 2021
    • Seeking advice from the World Bank on quick wins and areas for improvement

Anti-Corruption Efforts Underway

Comoros has been working to strengthen its anti-corruption framework, which is currently considered weak. The country’s National Commission for Preventing and Fighting Corruption was recently dismantled, leaving a gap in the architecture of anti-corruption measures.

Enhancing Anti-Corruption Measures

  • Enhancing rules for asset declarations
  • Broadening coverage of asset declarations
  • Verifying accuracy of reported assets
  • Adopting a time-bound action plan to strengthen laws and implementation of AML/CFT measures

Steps Forward

To implement its anti-corruption and AML/CFT strategies, Comoros has formulated an action plan that includes several key steps:

Action Plan

  • Amending the penal code to criminalize money laundering and terrorism financing
  • Strengthening customer due diligence requirements for financial institutions
  • Enhancing capacity of the Financial Research Service
  • Clarifying status of Comoros’ Economic Citizenship Program, including ensuring foreigners purchasing passports are fit and proper and their source of funds is legitimate

Conclusion

Comoros’ efforts to improve its business climate and combat corruption are an important step towards attracting foreign investment and promoting economic growth. However, the country’s authorities will need to make significant progress in implementing these reforms if they are to achieve their goals.