Cabo Verde Cracks Down on Money Laundering and Terrorism Financing with Tough New Laws

The tiny African island nation of Cabo Verde is making strides in the fight against financial crime. This archipelago country is taking proactive measures to prevent money laundering and terrorism financing from taking root in its financial system.

Money Laundering in Cabo Verde

According to Article 39 of Law No. 38/VII/2009, money laundering is a criminal offense in the Cabo Verdean legal system. This law, which has been amended by Law No. 120/VIII/2016, outlines the three stages of money laundering: placment, circulation, and integration.

Placement

During the placement stage, ill-gotten income and assets are introduced into the financial system through various channels, such as deposits in banks and investments in profitable activities or high-value property.

Circulation

In the circulation stage, funds are moved through a series of transactions to obscure their criminal origin. These actions can include transferring funds between accounts or purchasing assets using complex chains of companies.

Integration

Finally, during the integration stage, the laundered funds are reintegrated into the legitimate economy – often through the purchase of goods and services – making it difficult to distinguish them from legally obtained funds.

Combating Terrorism Financing

Cabo Verde has also taken steps to prevent terrorism financing. As outlined in Article 7 of Law No. 27/VIII/2013, terrorism financing is now classified as an autonomous crime in the Cabo Verdean legal system.

New Duties for Financial Institutions and Individuals

This law, which was republished by Law No. 119/VIII/2016, imposes new duties on financial institutions and individuals to detect and report transactions suspected of having a connection to terrorism.

Penalties for Terrorism Financing

Penalties for terrorism financing include the freezing and loss of property belonging to perpetrators and those who fund terrorist activities.

Cracking Down on Financial Crime in Cabo Verde

By cracking down on money laundering and terrorism financing, Cabo Verde is sending a strong message to potential criminal actors: the country’s financial system is not a haven for illicit funds or terrorism financing. And with its strategic location in the Atlantic Ocean, Cabo Verde is well-positioned to serve as a gateway to Africa, making its commitment to combating financial crime all the more crucial.