Anti-Corruption Measures in Finance Boost Investment Climate in São Tomé and Principe
The government of São Tomé and Principe has made significant strides in combating corruption, resulting in an improved ranking on Transparency International’s Corruption Perception Index. The country’s anti-corruption efforts have garnered praise from international organizations and foreign investors alike.
New Anti-Corruption Law
In 2012, the government approved a new anti-corruption law aimed at reducing corruption among civil servants and increasing transparency in financial transactions. A key provision of the law requires all payments to government entities exceeding USD 5 to be made directly through the Central Bank, while salary payments to civil servants are now paid directly into their commercial bank accounts.
Oil Revenue Management Law
The country has also implemented a widely praised oil revenue management law, which ensures that future oil revenues are managed responsibly. São Tomé and Principe is an Extractive Industries Transparency Initiative candidate country, demonstrating its commitment to transparency in the extractives sector.
Competition Promotion and Contract Review
In addition, the government has reviewed and updated existing contracts with foreign companies to promote liberalization and free market competition. The authorities have also denounced corruption and pledged to take necessary steps to prevent and combat it.
Historical Progress
Historically, customs corruption was a major issue for foreign investors, but an MCC Threshold Program introduced modern customs tracking software and eliminated manual procedures, reducing the likelihood of corruption in this area. Customs revenues have increased significantly since the program’s implementation, with reports indicating a decline in incidents of corruption.
Anti-Money Laundering and Counter-Terrorist Financing Law
In 2013, the STP Parliament adopted a fully amended and restated anti-money laundering/counter-terrorist financing law, which complies with international standards. The law includes provisions for criminal penalties, asset confiscation, and regulatory structure.
International Cooperation and Recognition
São Tomé and Principe has also signed and ratified the UN Anticorruption Convention and is a member of the Inter-Governmental Action Group against Money Laundering in West Africa, a FATF-style regional body. While the country does not have a designated agency responsible for combating corruption, it has made progress in addressing anti-money laundering/counter-terrorist financing standards.
Recognition and Impact
The government’s efforts to combat corruption have been recognized by international organizations, including its removal from the Financial Action Task Force’s list of countries with strategic deficiencies in their anti-money laundering/counter-terrorist financing standards. Overall, São Tomé and Principe’s commitment to anti-corruption measures has boosted investor confidence and created a more favorable investment climate.
Key Takeaways:
- The government of São Tomé and Principe has made significant strides in combating corruption.
- A new anti-corruption law aims to reduce corruption among civil servants and increase transparency in financial transactions.
- The country has implemented an oil revenue management law, which ensures responsible management of future oil revenues.
- Contracts with foreign companies have been reviewed and updated to promote liberalization and free market competition.
- Customs corruption has declined significantly since the implementation of a modern customs tracking software program.