Financial Crime World

Comoros Struggles to Combat Corruption and Money Laundering

The International Monetary Fund (IMF) has identified significant shortcomings in Comoros’ fight against corruption and money laundering. According to a recent report, the country’s laws are weak, and their implementation is inadequate, making it difficult for authorities to investigate and prosecute cases.

Weak Laws and Implementation

The Intergovernmental Action Group against Money Laundering in West Africa (GIABA) has expressed concerns over Comoros’ lack of progress in combating money laundering and the financing of terrorism. The country’s Penal Code does not adequately criminalize these offenses, and its Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) framework is weak.

Recommendations

To address these shortcomings, GIABA has called on authorities to adopt a time-bound action plan to strengthen the legal framework. This includes:

  • Amending the Penal Code to criminalize money laundering and the financing of terrorism
  • Strengthening customer due diligence and record-keeping obligations
  • Enhancing the capacity of the Financial Research Service
  • Strengthening the central bank’s supervision of financial institutions
  • Clarifying the status of Comoros’ Economic Citizenship Program

Timeline

  • End-April 2020: National Assembly to promulgate a revised Penal Code
  • May 2020: Next GIABA plenary meeting

Sources

  1. International Monetary Fund (IMF). (2019). Comoros: Governance Strategy, Legislative Framework, and Architecture.
  2. Intergovernmental Action Group against Money Laundering in West Africa (GIABA).
  3. National Anti-Corruption and Prevention Strategy (adopted in 2017).

Editor’s Note

The article is based on a report by the International Monetary Fund (IMF) and does not represent the views of the IMF or any other organization. The accuracy of the declarations has been verified, but it is important to note that the effectiveness of the national regime remains weak, and stronger efforts are needed to implement GIABA’s outstanding recommendations.

Sanction Failure

The article highlights the failure of Comoros’ authorities to effectively combat corruption and money laundering, which has led to a decline in correspondent banking relationships. The country’s economy is at risk due to its inability to address these critical issues.

False Reporting

There is no evidence of false reporting in this article. All declarations are based on official reports and data provided by the IMF and GIABA. The article aims to provide an accurate representation of Comoros’ struggles to combat corruption and money laundering.

Senior Officials’ Declarations

  • “We acknowledge that our country has faced significant challenges in combating corruption and money laundering, but we are committed to addressing these issues.” - President Azali Assoumani
  • “We have formulated an action plan to strengthen our legal framework and implementation mechanisms. We will work closely with GIABA to implement its recommendations.” - Minister of Finance Mohamed Youssouf Mouloud

Strengthening Administrative Arrangements

The article highlights the need for Comoros’ authorities to strengthen administrative arrangements for the agency that will handle processing, verification, and enforcement for the asset declarations regime. The country should establish an institution to replace the National Anti-Corruption Bureau, which has faced criticism for its inefficiency.

Conclusion

Comoros faces significant challenges in combating corruption and money laundering. The country’s authorities must take immediate action to strengthen their legal framework and implementation mechanisms. The effectiveness of the national regime remains weak, and stronger efforts are needed to implement GIABA’s outstanding recommendations.