Cape Verde Struggles to Combat Money Laundering and Terrorist Financing
Praia, Cape Verde - A Challenge in Combating Acquisitive Crime
Despite efforts to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, Cape Verde continues to face significant challenges in dealing with acquisitive crime and the laundering of proceeds thereof.
Cross-Border Movements of Physical Currency Remain a Concern
According to a recent report, cross-border movements of physical currency intercepted by customs authorities during border checks on travelers remain a major concern. The use of “shell companies” in the real estate sector to conceal or disguise the illicit origin of dirty money also remains a challenge.
Financial Information Unit (FIU) Struggles with Processing Suspicious Transaction Reports
The FIU has received 100 suspicious transaction reports (STRs) since last year, but only five have been processed and referred to the Attorney General. More than 90% of these reports were filed by commercial banks, with little involvement from other reporting entities.
Challenges Confronting the Financial Information Unit
The FIU’s relocation from the Central Bank to the Ministry of Justice in March 2012 has not strengthened its strategic and operational capacities, as it remains constrained by financial, logistical, and human resource challenges.
Lack of Coordination and Strategy
Cape Verde’s Inter-ministerial Committee on AML/CFT, which is responsible for coordinating anti-money laundering efforts, has not been functional since 2010. The country also lacks a national strategy on AML/CFT.
Technical Assistance Received from GIABA
To address these issues, the Government of Cape Verde received technical assistance from the West African Monetary and Economic Union (GIABA) in August 2012. A two-day seminar was organized for journalists to raise awareness about AML/CFT issues and promote adequate information dissemination on anti-money laundering regimes.
Results of the Seminar
The seminar resulted in the emergence of a pool of trained journalists with in-depth knowledge of measures against money laundering and terrorist financing. However, more assistance is needed to provide the FIU with requisite human, technical, and logistical resources to monitor cross-border movements of physical cash, precious metals, and other commodities.
Country’s Vulnerabilities
The country’s geographic location and features make it a natural transit point for narcotics from Latin America en route to Europe and other destinations. Additionally, its attraction of tourists and investors makes it a favourite target for laundering the proceeds of organized crime.
Recommendations
To overcome these challenges, Cape Verde should take steps to:
- Provide the FIU with necessary resources
- Operationalize the Inter-ministerial Committee on AML/CFT
- Adopt a national AML/CFT strategy
Conclusion
As one of the peaceful and stable countries in West Africa, Cape Verde is vulnerable to money laundering and associated criminal activities. It is essential that the country takes concrete steps to address these challenges and strengthen its anti-money laundering and combating the financing of terrorism regime.