Financial Crime World

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CABO VERDE FALLS SHORT ON MONEY LAUNDERING AND TERRORISM FINANCING RISKS

A recent evaluation by the International Cooperation Review Group (ICRG) has revealed significant shortcomings in Cabo Verde’s measures to combat money laundering and terrorism financing (ML/TF).

Incomplete AML/CFT Program

The report highlights that Cabo Verde lacks a designated authority or coordination mechanism responsible for AML/CFT policies. The country’s AML/CFT program is also incomplete, focusing too much on higher-risk areas and failing to provide a comprehensive understanding of ML/TF risks.

Lack of Resources and Information Sharing

  • Supervisory authorities and reporting entities in Cabo Verde do not have the necessary resources to implement their AML/CFT obligations.
  • There are inadequate mechanisms in place to provide Designated Non-Financial Businesses and Professions (DNFBPs) with the information they need to meet AML/CFT requirements.
  • DNFBPs and supervisors lack access to accurate data on regulated entities in certain sectors, making it difficult for them to conduct effective sectoral ML/TF risk analysis.

Geographical Proximity Risks

The country lacks a comprehensive Counter-Terrorism Financing (CFT) strategy to address the risks posed by its geographical proximity to high-risk zones.

Evaluation Findings and Ratings

The ICRG evaluation assigned low effectiveness ratings across all 11 criteria, indicating significant weaknesses in Cabo Verde’s AML/CFT system. The report also noted that the country’s technical compliance with the Financial Action Task Force (FATF) Recommendations was partially compliant in some areas and non-compliant in others.

Recommendations

To address these concerns, the government of Cabo Verde is recommended to:

  • Designate an authority or coordination mechanism responsible for AML/CFT policies
  • Establish a comprehensive AML/CFT program with a focus on higher-risk areas
  • Provide supervisory authorities with the necessary resources and information
  • Implement mechanisms for sharing information between DNFBPs and supervisors
  • Conduct sectoral ML/TF risk analysis using accurate data on regulated entities

Contact Information

For more information, please contact:

  • [Name], ICRG Secretariat
  • [Email]
  • [Phone]

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