Financial Crime World

Central African Republic: Financial Intelligence Units Facing Compliance Challenges

The Central African Republic (CAR) has faced significant hurdles in implementing the technical requirements of the Financial Action Task Force (FATF) Recommendations, as per a recent report. The country’s financial intelligence units (FIUs) have shown varying levels of compliance with these recommendations.

Progress and Challenges

While CAR has made progress in assessing risk and applying a risk-based approach, as well as implementing national cooperation and coordination mechanisms, it has struggled with confiscation and provisional measures, targeting financial sanctions related to terrorism and terrorist financing, and transparency and beneficial ownership of legal persons and arrangements.

FIU Compliance

The FIUs have been found partially compliant with several recommendations, including:

  • Money laundering offence
  • Terrorist financing offence
  • Targeted financial sanctions
  • Record keeping

However, they have also been found non-compliant with key areas such as:

  • Reporting suspicious transactions
  • Regulation and supervision of designated non-financial businesses and professions (DNFBPs)

Improvement Needed

The report highlights the need for CAR’s FIUs to improve their internal controls and foreign branches and subsidiaries, as well as enhance their reliance on third parties. Additionally, the country needs to strengthen its powers of supervisors and regulation and supervision of financial institutions.

FATF Recommendations Framework

The FATF Recommendations provide a framework for countries to prevent money laundering, terrorist financing, and other threats to the international financial system. The compliance ratings range from “compliant” (C) to “non-compliant” (NC), with “largely compliant” (LC) and “partially compliant” (PC) falling in between.

Conclusion

The report suggests that CAR’s FIUs have made progress in some areas but face significant challenges in others. The country will need to work closely with international partners to address these challenges and improve its compliance with the FATF Recommendations.