Financial Crime World

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CABO VERDE’S ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM (AML/CFT) SYSTEM IN NEED OF REFORMS

A recent report has highlighted the shortcomings in Cabo Verde’s AML/CFT system, citing low effectiveness and technical compliance ratings. The country is failing to adequately address money laundering and terrorist financing risks, posing a threat to its financial stability and integrity.

The Report’s Findings

The report, conducted by the Financial Action Task Force (FATF) and the West African Commission on Money Laundering (WACOL), evaluated Cabo Verde’s AML/CFT system against 40 international recommendations. The country scored low in several areas, including:

  • Risk assessment
  • International cooperation
  • Supervision
  • Preventive measures
  • Confiscation

The Report’s Recommendations

The report identified a lack of coordination and resources among supervisory authorities and reporting entities, hindering the effective implementation of AML/CFT policies. It also noted that Cabo Verde lacks a comprehensive AML/CFT program, focusing primarily on higher-risk areas such as real estate and non-profit organizations.

To address these shortcomings, the report recommended:

  • Designating an authority or coordination mechanism responsible for AML/CFT policies
  • Providing supervisory authorities with necessary resources and training
  • Establishing adequate information-sharing mechanisms between reporting entities and supervisors

Call to Action

Cabo Verde’s financial sector is at risk of being exploited by money launderers and terrorist financiers. It is essential that the government takes immediate action to address these shortcomings and strengthen its AML/CFT system.

Next Steps

To demonstrate its commitment to combating money laundering and terrorist financing, Cabo Verde must take concrete steps to:

  1. Designate an authority or coordination mechanism responsible for AML/CFT policies
  2. Provide supervisory authorities with necessary resources and training
  3. Establish adequate information-sharing mechanisms between reporting entities and supervisors
  4. Implement a comprehensive AML/CFT program, focusing on higher-risk areas such as real estate and non-profit organizations

By taking these steps, Cabo Verde can strengthen its AML/CFT system and demonstrate its commitment to combating money laundering and terrorist financing.