ML Cases Rising in Central African Republic Due to Lack of AML/CTF Policy
The Central African Republic (CAR) is currently facing a surge in Money Laundering (ML) cases due to the absence of an Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) criminal policy and the lack of expertise among investigative and prosecuting authorities.
Lack of Data and Expertise
According to a recent report, the consistency between predicate offenses prosecuted and CAR’s threats and risk profile could not be assessed due to a lack of available statistical data. Moreover, investigative and prosecuting authorities do not identify or locate assets that may be seized and confiscated as part of their investigations into underlying ML offenses.
Contributing Factors
The report highlights several other issues contributing to the rise in ML cases:
- Weak Supervision: Supervisors of financial institutions carry out generally satisfactory due diligence despite a weak system for identifying beneficial owners.
- Inadequate Control Functions: The control functions to prevent exploitation for AML/CFT purposes are inadequate, with no competent authorities designated to monitor non-compliance among DNFBPs.
- Transparency Shortcomings: There are shortcomings in the mechanisms set up to ensure transparency of legal entities and arrangements, making it difficult to prevent misuse for ML/TF purposes.
- Limited International Cooperation: CAR has not requested or granted international cooperation in matters of mutual legal assistance and extradition in the field of AML/CFT.
Security and Political Challenges
CAR is facing major security and political challenges, including periods of political instability and armed conflict, which have had a significant impact on economic and social development. In this context, the country is exposed to a range of ML/TF risks, including:
- Misappropriation of public funds
- Drug trafficking
- Corruption
- Human trafficking
Conclusion
The report concludes that CAR must address these issues to prevent further ML cases from arising and to protect its financial system from exploitation by criminal organizations. It is essential for the country to develop an AML/CFT policy, improve supervision and control functions, enhance transparency, and engage in international cooperation to combat ML/TF threats effectively.