Financial Crime World

Title: Cameroon’s First National Risk Assessment: Revealing High Money Laundering and Terrorist Financing Risks

Subtitle: Uncovering Financial Crime Threats in Cameroon’s Complex Economic Landscape

The Minister of Finance in Cameroon announced the completion of the country’s first National Risk Assessment (NRA) on money laundering and terrorist financing. Conducted with World Bank support, the assessment aimed to ensure the financial system’s integrity and attract “sound investments” for development.

Threats to Financial Integrity

According to the assessment:

  1. Economic growth and capital inflow: Although beneficial for the economy, these factors create potential vectors for laundering illicit financial masses.
  2. Persistent economic and financial crimes: Tax and customs fraud, corruption, and wildlife trafficking are prevalent, generating resources for various sectors.
  3. Terrorist financing risks: The national security context, featuring terrorist activities in some regions and neighboring countries, increases risks.

Conducting the National Risk Assessment

In late 2018, Cameroonian authorities conducted an NRA, adhering to FATF Recommendation 1 and CEMAC regulations. An Inter-Ministerial Committee was established, consisting of public, private, and civil society actors.

Data was gathered from various sources, including public administrations, courts, investigative authorities, and financial and non-financial institutions. This information was analyzed using the World Bank assessment tool to identify and understand national and sectoral money laundering and terrorist financing risks.

Assessment Results

  1. Money laundering risks: Cameroon’s money laundering risks are ‘High’, with a ‘High’ threat rating and ‘Moderately High’ national vulnerability rating.
  2. Sectors with ‘High’ risk levels: Banks, microfinance, real estate, casinos, currency exchange offices, precious metals and stones dealers, notaries, and building material dealers.
  3. Terrorist financing risks: Cameroon’s overall terrorist financing risk is ‘High’, given a ‘High’ threat rating and ‘Moderately High’ vulnerability rating.

Proposed Action Plan

The assessment team proposed a priority action plan, targeting:

  1. Strengthening legal and institutional framework: Reviewing and updating relevant laws, regulations, and policies.
  2. National coordination framework: Establishing a national team to monitor and coordinate counter-financial crime efforts.
  3. Control and supervision system: Enhancing prevention actors’ control and supervision systems.
  4. Effectiveness of investigative and prosecuting authorities: Improving investigative and prosecuting capacities.

Conclusion

Cameroon’s status as an economic powerhouse within the CEMAC zone necessitates a strong commitment to addressing financial crime risks and ensuring the financial system’s integrity. The first National Risk Assessment marks an essential step in this direction.