Cape Verde’s Efforts to Combat Trafficking of Stupefacients Face Scrutiny

Lisbon, Portugal - A recent investigation has raised concerns about Cape Verde’s ability to effectively combat the trafficking of stupefacients. The country’s unit responsible for investigating suspicious transactions (SCITE) plays a crucial role in identifying and reporting potential money laundering activities.

Lack of Autonomy and Resources

However, critics argue that SCITE lacks the autonomy to take decisive action and is often restricted by its limited resources and expertise. Furthermore, the unit’s inability to conduct thorough investigations into money laundering offenses hinders its effectiveness.

Inadequate Customs Department

The country’s customs department has also come under fire for failing to stop or restrain currency or bearer instruments suspected of being linked to money laundering or terrorism financing.

Weak Regulatory Framework

In addition, Cape Verde’s regulatory framework for financial institutions has been criticized for lacking clarity and consistency. The regime for preventive measures is built on the principal money laundering law, but critics argue that it falls short in addressing the risks posed by certain types of higher-risk customers.

Customer Due Diligence Regime

The customer due diligence regime also raises concerns, as financial institutions are allowed to base customer identification on verifications provided by foreign institutions without establishing a framework to ensure that only well-supervised institutions are used for this purpose.

Weaknesses in International Framework

The article highlights several weaknesses in Cape Verde’s framework for international financial institutions, including:

• Lack of rigorous regulatory arrangements
• Possibility for institutions to operate outside of acceptable arrangements for global consolidated supervision

Limited Transaction Monitoring

Furthermore, there are concerns about the obligation to monitor transactions, which is limited to those suspected of being linked to a predicate offense currently covered by the money laundering legislation. This limits the effectiveness of suspicious transaction reports (STRs) and hinders the ability to identify and prevent money laundering activities.

Weaknesses in Designated Non-Financial Businesses and Professions

The article also notes that there are fundamental weaknesses in the country’s framework for designated non-financial businesses and professions, including:

• Real estate agents
• Dealers in motor vehicles
• Others

These entities are required to implement anti-money laundering measures but lack clear guidelines and training from regulators.

Conclusion

In conclusion, Cape Verde’s efforts to combat trafficking of stupefacients face significant challenges due to weaknesses in its regulatory framework and limited resources. The country must address these issues to effectively prevent and detect money laundering activities.