Financial Crime World

Combating Money Laundering and Terrorist Financing in Cameroon: An Overview of COBAC Regulation R-2023/01

The Cameroonian government has introduced a new regulation aimed at combating money laundering and terrorist financing. The COBAC Regulation R-2023/01 requires financial institutions to implement effective Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures.

Key Provisions

The regulation demands that reporting entities, such as banks and other financial institutions, have internal policies and procedures to manage and mitigate AML/CFT risks. The key provisions of the regulation are:

Risk Assessment

  • Financial institutions must conduct regular risk assessments to identify potential money laundering and terrorist financing risks.

Customer Onboarding

  • Institutions must verify the identity of customers and maintain accurate records of customer information.

Transaction Monitoring

  • Institutions must monitor transactions for suspicious activity and report any unusual or unexplained transactions to the National Financial Intelligence Agency (NAFI).

Reporting Requirements

  • Institutions must submit regular reports to NAFI on cash transactions exceeding CFAF 5 million and other suspicious activities.

Internal Controls

  • Institutions must establish internal controls, including policies, procedures, and training programs, to ensure compliance with the regulation.
  • Each institution must appoint a compliance officer responsible for ensuring compliance with the regulation.

Sanctions for Non-Compliance

The regulation provides for sanctions against financial institutions that fail to comply with its provisions. These sanctions include:

Warning

  • A warning may be issued by COBAC in cases of non-compliance.

Suspension or Revocation of License

  • In more serious cases, a license may be suspended or revoked.

Pecuniary Sanctions

  • Financial institutions may be subject to fines or other pecuniary sanctions.

Conclusion

The COBAC Regulation R-2023/01 is an important step in combating money laundering and terrorist financing in Cameroon. By requiring financial institutions to implement effective AML/CFT measures, the regulation helps to protect the integrity of the financial system and prevent illicit activities.