Financial Crime World

Burundi’s Banking Regulations for Anti-Money Laundering Face Scrutiny

The Financial Action Task Force (FATF) has released a follow-up report on Burundi’s progress in implementing anti-money laundering regulations. The report assesses the country’s compliance with 40 technical requirements aimed at preventing money laundering and terrorist financing.

Compliance Status

According to the report, Burundi is largely compliant with several key requirements, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)

However, there are areas where Burundi falls short of compliance, including:

  • Confiscation and provisional measures (R.4) - partially compliant
  • Terrorist financing offence (R.5) - partially compliant
  • Money or value transfer services (R.14) - partially compliant
  • Regulation and supervision of financial institutions (R.28) - non-compliant
  • Transparency and beneficial ownership of legal persons and arrangements (R.24) - non-compliant

Inconsistencies with International Standards

The report also highlights areas where Burundi’s regulations are inconsistent with international standards, including:

  • Customer due diligence (R.10)
  • Record keeping (R.11)
  • Internal controls and foreign branches and subsidiaries (R.18)

Progress and Commendations

Despite these shortcomings, the FATF has commended Burundi for its progress in implementing several key requirements, including:

  • Financial institution secrecy laws (R.9)
  • Reporting of suspicious transactions (R.20)
  • Regulation and supervision of DNFBPs (R.26)
  • Powers of supervisors (R.27)

Conclusion

The FATF report is a crucial tool for assessing the effectiveness of anti-money laundering regulations around the world. It provides a roadmap for countries like Burundi to strengthen their defenses against money laundering and terrorist financing, while also promoting transparency and cooperation between nations.

References

  • Financial Action Task Force (FATF). (2023). Report on the Follow-up on the Implementation of the FATF Recommendations by Burundi.