Financial Crime World

Evaluation of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) System in the Central African Republic

The Central African Republic (CAR) faces significant challenges in its fight against money laundering and the financing of terrorism. This article provides a summary of the key findings from an evaluation of the AML/CFT system in CAR, highlighting areas of strength and weakness.

Understanding Money Laundering/Financing of Terrorism Risks

Specific Observations on the AML/CFT System

  • The understanding of ML/TF risks is diverse and still in its infancy among Designated Non-Financial Businesses and Professions (DNFBPs), except for notaries.
  • Most DNFBPs are unaware of their AML/CFT duties under the CEMAC Regulation.
  • Implementation of AML/CFT measures is a vast undertaking.

Observations on Virtual Assets (VAs)

  • The promotion of Law No. 22/001 governing crypto-currencies has not been accompanied by specific implementing measures to regulate VAs.
  • ML/TF risks associated with VA activities remain unregulated and evade the AML/CFT system.

Control Functions

Shortcomings in Control and Supervision System

  • There are shortcomings in the control and supervision system for financial institutions and DNFBPs.
  • Supervisors of financial institutions carry out satisfactory due diligence, but the system for identifying beneficial owners is weak.
  • No competent authorities have been designated to monitor non-compliance with AML/CFT obligations among DNFBPs.

Transparency Mechanisms

Shortcomings in Transparency Mechanisms

  • There are shortcomings in the mechanisms for ensuring transparency of legal entities and arrangements in CAR.
  • Information on beneficial owners is lacking, and checks on authenticity of information are inadequate.
  • Access to information collected on legal entities and arrangements is limited.

General Framework and Challenges

  • The country has a suitable general legal framework for MLA and extradition.
  • However, there is no centralized system for archiving and managing files.
  • No international cooperation in matters of MLA and extradition has been requested or granted during the evaluation period.

General Situation and ML/TF Risks

CAR’s Security and Economic Challenges

  • CAR faces major security and political challenges that have a significant impact on economic and social development.
  • The country has experienced periods of political instability interspersed with episodes of armed conflict.
  • A National Recovery and Peacebuilding Plan (RCPCA) aims to establish lasting peace and stability throughout the country.

ML/TF Risks in CAR

  • CAR is exposed to various ML/TF risks, including misappropriation of public funds, illicit trafficking in precious stones and metals, drug trafficking, corruption, and human trafficking.
  • The TF threat is characterized by the existence of armed groups on Central African territory.