Financial Crime World

Central African Republic Fails to Effectively Combat Money Laundering and Terrorist Financing

A recent evaluation has revealed significant shortcomings in the Central African Republic’s (CAR) efforts to combat money laundering (ML) and terrorist financing (TF). The country’s investigative and prosecuting authorities lack expertise, leading to inadequate identification and prosecution of ML cases linked to predicate offences.

Lack of Expertise and Consistency

  • There is no criminal policy on anti-money laundering and combating the financing of terrorism (AML/CFT), resulting in a lack of consistency between predicate offences prosecuted and the country’s threats and risk profile.
  • Investigative authorities do not identify or locate assets that may be seized and confiscated as part of their investigations into underlying ML cases.

Weaknesses in Control and Supervision

  • The control and supervision system for financial institutions and designated non-financial businesses and professions (DNFBPs) in CAR is weak.
  • Supervisors of financial institutions carry out generally satisfactory due diligence, but AML/CFT supervisory actions are not sufficiently effective.
  • There are no competent authorities designated to monitor non-compliance with AML/CFT obligations in respect of DNFBPs.

Inadequate Transparency Mechanisms

  • Mechanisms set up to ensure transparency of legal entities and arrangements in CAR are inadequate.
  • The collection, storage, and updating of information on legal entities and legal arrangements are not sufficiently robust, and checks on the authenticity of information are empirical and inadequate.
  • The country’s general legal framework for mutual legal assistance and extradition is suitable, but there is no centralized system for archiving and managing files.
  • CAR has neither requested nor granted international cooperation in matters of mutual legal assistance and extradition in the field of AML/CFT.

Impact on Economic and Social Development

  • The security and political challenges faced by CAR, including periods of political instability and armed conflict, have 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, illicit trafficking, corruption, and human trafficking.

Conclusion

The evaluation concludes that CAR’s AML/CFT system is inadequate, and urgent reforms are needed to address these shortcomings. The country’s authorities must take immediate action to strengthen their AML/CFT framework, improve cooperation with international partners, and ensure effective implementation of AML/CFT measures to combat ML/TF risks.