Financial Crime World

Comoros Struggles to Improve Contract Enforcement, Combat Corruption

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The Union of the Comoros is facing significant challenges in strengthening its judicial system and combating corruption, according to a recent assessment by the International Monetary Fund (IMF).

Challenges in Judicial System

Comoros’ ranking on the World Bank’s Doing Business index has stagnated at 160th out of 190 countries, with key areas of concern including contract enforcement and property rights. The IMF recommends that Comoros strengthen its judiciary by:

  • Seeking outside expertise to improve judicial skills and knowledge
  • Increasing funding to enhance infrastructure and resources
  • Introducing lay judges to complement professional judges

Weak Anti-Corruption Framework

Comoros’ anti-corruption framework is “generally weak,” with the National Commission for Preventing and Fighting Corruption recently dismantled. The authorities are urged to:

  • Enhance asset declaration rules, including broadening coverage and verifying accuracy
  • Sanction non-compliance with anti-corruption regulations

Money Laundering and Terrorist Financing Concerns

Comoros is called upon to:

  • Amend its Penal Code to adequately criminalize money laundering and terrorist financing offenses
  • Strengthen customer due diligence requirements for financial institutions
  • Enhance the capacity of the Financial Research Service
  • Strengthen supervision of financial institutions

The country’s Economic Citizenship Program, which has raised AML/CFT concerns, is also under scrutiny.

Action Plan and GIABA Plenary

Comoros has been asked by the Intergovernmental Action Group against Money Laundering in West Africa (GIABA) to adopt a time-bound action plan to address these shortcomings. The country’s authorities are under pressure to make significant progress in addressing these critical issues ahead of the next GIABA plenary scheduled for May 2020.

Source: International Monetary Fund (IMF) report on Comoros’ governance strategy, legislative framework, and architecture.