Financial Crime World

DFIs Demonstrate Good Understanding of Risks, Adopt Risk-Based Approach

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A recent report by the National Regulatory Authority (NRA) has highlighted that Depository Financial Institutions (DFIs) in Burkina Faso have demonstrated a good understanding of their Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) risks. The institutions have adopted a risk-based approach, which is considered a best practice.

Implementing Measures to Mitigate Risk

The report noted that the DFIs have implemented measures to identify and mitigate high-risk customers and transactions, and have also strengthened their internal controls and governance structures. This positive development has significantly improved the overall AML/CFT compliance of the sector.

Cooperation between Authorities

The report also commended the cooperation between authorities in Burkina Faso, particularly between the Financial Intelligence Unit (FIU) and other law enforcement agencies. The FIU has been actively involved in international cooperation, sharing information and providing assistance to foreign counterparts.

In addition, the Banking Commission has collaborated with foreign supervisory authorities through Memoranda of Understanding on cooperation and information exchange. This collaboration has led to joint home and host country inspections, which have improved the overall effectiveness of AML/CFT supervision.

Priorities for Improvement

Based on the findings of the report, several priority actions are recommended for Burkina Faso:

  • Dissemination of Report: Ensure that the NRA report is disseminated to all relevant stakeholders in the public and private sectors.
  • National AML/CFT Policy: Develop a national AML/CFT policy based on the risks identified in the NRA and map out a timeline for regular updating of the NRA.
  • Scope of Assessments: Improve the scope of future assessments by incorporating:
    • The livestock trade
    • Legal persons and arrangements
    • A more comprehensive assessment of Non-Profit Organizations (NPOs)
  • National Cooperation and Coordination: Strengthen national cooperation and coordination on AML/CFT by:
    • Sensitizing all relevant institutions and stakeholders on their roles
    • Ensuring that non-bank Financial Institutions (FIs) and DNFBP sectors have a better understanding of ML/TF risks in their sectors

By implementing these priority actions, Burkina Faso can further improve its AML/CFT framework, enhance international cooperation, and reduce the risk of money laundering and terrorist financing.