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What is Financial Crime in São Tomé and Principe?

São Tomé and Principe, a small island nation off the coast of West Africa, has been working to improve its financial system and combat financial crime. But what exactly is financial crime, and how does it affect this tiny country?

Definition of Financial Crime

Financial crime refers to illegal activities involving financial transactions or institutions, such as:

• Money laundering
• Terrorist financing
• Fraud
• Corruption
• Embezzlement

In São Tomé and Principe, financial crime is a growing concern, with many experts warning of the dangers it poses to the country’s economy and stability.

Efforts to Combat Financial Crime

To combat financial crime, São Tomé and Principe has implemented various measures, including:

• The establishment of a Financial Intelligence Unit (FIU) to monitor and analyze suspicious transactions
• Laws and regulations to prevent money laundering and terrorist financing, such as the Anti-Money Laundering Act and the Combating of Terrorist Financing Act

Challenges

Despite these efforts, São Tomé and Principe still faces many challenges in combating financial crime, including:

• Lack of resources and infrastructure
• Corruption, with many officials involved in financial crimes going unpunished

Follow-up Report 2023

In 2023, the country submitted its follow-up report to the Financial Action Task Force (FATF), which assessed its progress in implementing the FATF Recommendations.

The report showed that São Tomé and Principe had made significant progress in some areas, such as:

• Assessing risk and applying a risk-based approach
• National cooperation and coordination

However, it also identified several weaknesses, including:

• Lack of effective confiscation and provisional measures to freeze assets related to financial crimes

Recommendations for Improvement

To address the root causes of financial crime in São Tomé and Principe, the country needs to:

• Continue strengthening its financial system
• Improve cooperation with other countries
• Address corruption and ensure accountability for officials involved in financial crimes

Ratings

Note: The ratings are based on the country’s progress in implementing the FATF Recommendations, with C = Compliant, LC = Largely Compliant, PC = Partially Compliant, and NC = Non-Compliant.