Financial Crime World

Djibouti Faces Scrutiny Over Anti-Money Laundering Regulations

A recent report from the Financial Action Task Force (FATF) has highlighted several areas where Djibouti falls short in its implementation of anti-money laundering (AML) regulations. The country received a largely compliant rating for 12 out of 40 recommendations, with several areas requiring improvement.

Compliance and Non-Compliance

Djibouti was found to be partially compliant with requirements relating to:

  • Confiscation and provisional measures
  • Terrorist financing offence
  • Customer due diligence

However, the country was also rated as non-compliant in several areas, including:

  • Transparency and beneficial ownership of legal persons and arrangements
  • Laws and regulations governing non-profit organizations
  • Financial institution secrecy laws

Weaknesses Identified

The report noted several weaknesses that need to be addressed, including:

  • Inadequate laws and regulations governing the activities of non-profit organizations
  • Financial institution secrecy laws
  • Correspondent banking requirements
  • Money or value transfer services
  • New technologies
  • Internal controls and foreign branches and subsidiaries
  • Reliance on third parties

Positive Notes

On a positive note, Djibouti was found to be compliant with several recommendations, including:

  • Financial institution secrecy laws
  • Reporting of suspicious transactions
  • Tipping-off and confidentiality
  • Regulation and supervision of financial institutions

Response from Authorities

In response to the report, Djibouti’s authorities have pledged to address the weaknesses identified and improve its AML regulations. The country’s government has also committed to increasing transparency and cooperation with international partners to combat money laundering and terrorist financing.

Impact on International Financial Markets

The FATF recommendations are widely regarded as a global standard for combating money laundering and terrorist financing. The report is likely to be closely monitored by international regulators and financial institutions, which will impact Djibouti’s ability to access international financial markets and attract foreign investment.

Overall, the report highlights several areas where Djibouti needs to improve its AML regulations to meet international standards and avoid potential risks to its financial system.