Financial Crime World

Burkina Faso Falls Short in Banking Regulations Compliance, FATF Report Suggests

A recent report by the Financial Action Task Force (FATF) has highlighted that Burkina Faso is only partially compliant with several key recommendations aimed at preventing money laundering and terrorist financing. The West African country’s banking sector was found to be lacking in certain areas, prompting concerns among financial experts.

Compliance Areas

According to the FATF Follow-Up Report 2021, Burkina Faso showed compliance in some areas, including:

  • Confiscation of assets related to money laundering (R.3)
  • Regulation and supervision of financial institutions (R.26)

However, the country fell short in others, such as:

  • Implementing a risk-based approach to assess money laundering risks (R.1)
  • Regulating non-profit organizations (R.8)
  • Providing transparency on beneficial ownership of legal persons (R.24)

Areas for Improvement

The report highlighted several areas where Burkina Faso needs improvement, including:

  • Implementation of customer due diligence measures (R.10)
  • Maintenance of accurate record-keeping systems (R.11)
  • Combating terrorist financing, particularly with regards to targeted financial sanctions related to terrorism and terrorist financing (R.6)

Additionally, the country was found to be lacking in its efforts to prevent the misuse of new technologies, such as cryptocurrencies, for money laundering and terrorist financing purposes (R.15).

Non-Compliance

The report also criticized Burkina Faso’s lack of progress in implementing measures related to mutual legal assistance agreements with other countries (R.38).

Conclusion and Response

The FATF report concludes that Burkina Faso’s banking sector remains vulnerable to money laundering and terrorist financing risks due to inadequate regulations and supervision.

In response, the Burkinabe authorities have pledged to implement the necessary reforms to ensure the country’s banking sector is better equipped to combat financial crimes. However, experts warn that more needs to be done to effectively address these risks and protect the integrity of the global financial system.

Recommendations

The FATF has called on the government to address these shortcomings and improve its overall compliance with international anti-money laundering and counter-terrorism financing standards.