Financial Crime World

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CABO VERDE’S ML/TF RISK-BASED SUPERVISION IN DNFBP SECTOR: A NON-EXISTENT PRACTICE

A recent evaluation by the Financial Action Task Force (FATF) has revealed that Cabo Verde’s risk-based supervision in the Domestic Non-Financial Businesses and Professions (DNFBP) sector is non-existent. The report highlights a lack of guidelines, training, and resources for supervisors to effectively assess ML/TF risks and apply sanctions.

  • Basic information on legal persons is available online, but there is no assessment of ML/TF risks associated with different types of legal persons.
  • The National Regulatory Authority (NRA) has not indicated which entities pose higher risks and requires more stringent supervision.

Lack of Guidelines and Training

  • There are no guidelines or training programs in place for supervisors to identify and assess ML/TF risks in the DNFBP sector.
  • This lack of guidance and expertise has resulted in a failure to effectively supervise high-risk entities and individuals.

Insufficient Resources

  • Resources allocated to supervise the DNFBP sector are insufficient, making it challenging for supervisors to conduct effective risk assessments and implement targeted measures to mitigate ML/TF risks.

FATF Recommendations

The FATF report recommends that Cabo Verde strengthen its AML/CFT system by:

  1. Developing guidelines and training programs for supervisors to identify and assess ML/TF risks in the DNFBP sector.
  2. Implementing a risk-based approach to supervise high-risk entities and individuals.
  3. Providing sufficient resources to support effective supervision.

Evaluation Rating

The evaluation rated Cabo Verde’s AML/CFT system as “Low” in terms of effectiveness, with a technical compliance rating of “Partially Compliant” (PC). The report emphasizes the need for immediate improvements to strengthen the country’s AML/CFT system and meet international standards.

Call to Action

The FATF evaluation highlights the urgent need for Cabo Verde to address these deficiencies and implement effective risk-based supervision in the DNFBP sector. Failure to do so may result in the country being considered non-compliant with international AML/CFT standards, which could have severe consequences for its financial system and economy.