Financial Crime World

Cabo Verde Takes a Stand Against Financial Crime: Money Laundering and Terrorism Financing Defined

Cabo Verde has taken a significant step towards curbing financial crime in the country by defining money laundering and terrorism financing as criminal acts under its legal system. This move aims to prevent illegal activities from infiltrating the country’s financial circuits.

What is Money Laundering?

Money laundering is the process of transforming the proceeds from criminal activities into legally reusable capital by concealing the origin or true owner of the funds. The process involves three stages:

  • Placement: The initial step where property and income are placed in financial and non-financial circuits, often through deposits with financial institutions or investments in profitable activities and high-value property.
  • Circulation: Multiple and repeated transactions designed to distance the funds from their criminal origin, eliminating any trace of ownership.
  • Integration: The final stage where recycled property and income are reintroduced into legitimate economic circuits.

In Cabo Verde, money laundering is a crime under Article 39 of Law No. 38/VI/2009, as amended by Law No. 120/VIII/2016.

Measures to Prevent Terrorism Financing

Cabo Verde has implemented measures to prevent terrorism financing in conjunction with its money laundering prevention framework. These measures include:

  • Freezing and Confiscation of Property: Freezing and confiscating property belonging to terrorists and their supporters.
  • Reporting Suspicious Transactions: Reporting suspicious transactions related to terrorism.
  • Increased Duties: Increasing duties to prevent money laundering, particularly in the context of fund transfers.
  • Criminalizing Terrorism Financing: Criminalizing terrorism financing.

Classification of Terrorism Financing

The classification of terrorism financing as an autonomous crime is contained in Article 7 of Law No. 27/VI/2013, republished by Law No. 119/VIII/2016. This move aims to reduce the possibility that those who commit acts of terrorism, terrorist organizations, and their funders will have access to the international financial system.

By defining money laundering and terrorism financing as criminal acts, Cabo Verde is taking a proactive approach towards preventing financial crime in the country. This move demonstrates the government’s commitment to protecting its financial system and reducing the risk of illegal activities infiltrating the economy.