Financial Institution Security Measures in Cape Verde Under Scrutiny

Cape Verde, a small island nation off the coast of West Africa, has undergone an assessment by international authorities to evaluate its compliance with financial institution security measures. The results indicate that while significant progress has been made in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) regulations, there are still areas that require improvement.

Key Findings

• Cape Verde received ratings of “largely compliant” or “partially compliant” for several key indicators, including:
  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Money laundering offense
  • Confiscation and provisional measures
  • Targeted financial sanctions related to terrorism and terrorist financing
• However, the country was found to be non-compliant in several areas, including:
  • Transparency and beneficial ownership of legal persons and arrangements

Positive Developments

• Cape Verde has implemented customer due diligence, record keeping, and internal controls for foreign branches and subsidiaries.
• The country has made progress in regulating and supervising financial institutions and designated non-financial businesses and professions (DNFBPs).

Areas Requiring Improvement

• Regulation and supervision of DNFBPs
• Financial intelligence units
• Powers of supervisors
• Reporting suspicious transactions
• Transparency in beneficial ownership

Significance for International Financial Institutions

The results of this assessment are significant for international financial institutions operating in Cape Verde, as they highlight the importance of maintaining robust AML/CFT measures to prevent financial crimes. The country’s financial sector has grown significantly in recent years, making it an attractive destination for investors. However, this growth also increases the risk of money laundering and terrorist financing.

Next Steps

In response to these findings, Cape Verde is expected to take steps to address the identified shortcomings and improve its AML/CFT regime. This includes:

• Strengthening regulation and supervision
• Enhancing transparency and beneficial ownership requirements
• Improving reporting and suspicious transaction detection

The international community is closely monitoring Cape Verde’s progress in implementing these measures, as it plays a critical role in preventing financial crimes and maintaining global economic stability.