Financial Crime World

Title: “Cabo Verde Cracks Down on Financial Crime: Money Laundering and Terrorism Financing”

The West African island nation of Cabo Verde is making strides in the global fight against financial crime. With a robust legal framework targeting money laundering and terrorism financing, this tiny island nation is leaving a significant impact.

Concerns with Money Laundering

Money laundering, the process of disguising the proceeds of criminal activities as legitimate capital, is a serious concern for Cabo Verde and many other nations. According to the Cabo Verdean legal system, money laundering is a punishable offense (Article 39 of Law No. 38/VII/2009, amended by Law No. 120/VIII/2016).

Stages of Money Laundering

The money laundering process consists of three key stages:

  1. Placement: Criminal proceeds are introduced into the financial system through methods such as real estate investments, lucrative business deals, or bank deposits, often hidden from detection.
  2. Circulation: The funds undergo multiple transactions, obscuring their origins and ownership, as they move from one financial intermediary to another.
  3. Integration: Once cleansed of their illicit past, the funds re-enter the legitimate economy, often appearing as legitimate income or investments.

Countering Money Laundering and Terrorism Financing

To combat money laundering, Cabo Verde has enacted legislative measures to target terrorism financing as well. According to Article 7 of Law No. 27/VIII/2013 (amended by Law No. 119/VIII/2016):

  1. Freezing Assets: Authorities are granted the power to freeze the assets of suspected terrorists.
  2. Reporting Transactions: Financial institutions are obligated to report transactions with ties to terrorism.
  3. Strict checks on Fund Transfers: Increased scrutiny is placed on fund transfers and transactions to prevent financing of terrorist activities.

Strengthening Financial Crime Defenses

In its continuous effort to fortify its defenses against financial crime, Cabo Verde remains committed to eradicating both money laundering and terrorism financing from its shores.