Financial Crime World

Chad’s Financial Institutions Fall Short on Risk-Based Approach to Anti-Money Laundering Efforts

A recent assessment by international financial watchdogs has found that Chad’s efforts to combat money laundering and terrorist financing are lacking, particularly in implementing a risk-based approach to anti-money laundering (AML) regulations.

Shortcomings Revealed

The evaluation, which assessed Chad’s compliance with the Financial Action Task Force (FATF) recommendations, revealed significant shortcomings in several areas. Notably:

  • Chadian financial institutions failed to adequately assess and manage the risks associated with money laundering and terrorist financing, resulting in a lack of targeted measures to address these threats.
  • There were issues with customer due diligence practices, record-keeping requirements, and internal controls.

Areas for Improvement

While some areas received moderate scores, such as:

  • Efforts to combat terrorist financing
  • Ability to rely on third-party reports

others fell short. Specifically:

  • Chadian financial institutions lacked clarity around money laundering offenses
  • Confiscation and provisional measures were not clearly defined
  • Regulation and supervision of financial institutions and designated non-financial businesses and professions (DNFBPs) was inadequate

Cooperation and Coordination Issues

Additionally, Chadian authorities were criticized for their limited cooperation and coordination with international partners, as well as their insufficient efforts to provide guidance and feedback to regulated entities.

Global Implications

The FATF recommendations aim to ensure that countries have effective systems in place to combat money laundering and terrorist financing. Chad’s failure to adequately implement these measures puts the country at risk of being used as a conduit for illicit funds and undermines global efforts to combat financial crime.

Urgent Action Required

In light of these findings, Chadian authorities are urged to take immediate action to address the identified shortcomings and improve their AML/CFT framework. The country must demonstrate its commitment to combating money laundering and terrorist financing by implementing a robust risk-based approach that targets high-risk sectors and entities.