Financial Crime World

The Democratic Republic of Congo’s Ineffective Anti-Money Laundering/Countering Financing of Terrorism System

Overview

The Democratic Republic of Congo (DRC) has made a commitment to combating money laundering and the financing of terrorism, but its Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) system is relatively ineffective. The country’s economy, characterized by a strong informal sector, extensive use of cash, high dollarization, and widespread corruption, creates an environment conducive to crime and money laundering activities.

Significant ML/FT Risks

The DRC faces significant Money Laundering/Financing of Terrorism (ML/FT) risks due to the following factors:

  • Economic crimes: The perpetration of economic crimes, such as corruption, generates proceeds that may be incorporated into the laundering process.
  • Environmental crimes: The country’s natural resources are vulnerable to exploitation, which can lead to environmental crimes and associated ML/FT risks.
  • Terrorism: The presence of armed groups and gangs in the DRC exposes the country to terrorism and its financing.

Shortcomings of the AML/CFT System

The DRC’s AML/CFT system has several notable shortcomings, including:

  • Lack of national coordination: There is no comprehensive national strategy to combat money laundering and the financing of terrorism.
  • Definition of a supervision policy: The country lacks a clear definition of its supervision policy, emphasizing the risk-based approach.
  • Supervision of financial institutions and DNFBPs: The DRC does not effectively supervise financial institutions and designated non-financial businesses and professions (DNFBPs).
  • Outdated legal framework: The legal framework developed in 2004 has mostly not been updated to keep pace with developments in international standards, including the 2012 FATF Recommendations.

Efforts to Combat Corruption and Money Laundering

Despite these shortcomings, the DRC has made efforts to combat corruption and money laundering, such as:

  • Creation of the Observatory for Monitoring Corruption and Professional Ethics (OSCEP): This strategic body aims to monitor corruption and professional ethics in the country.
  • Establishment of the Committee to Combat Money Laundering and the Financing of Terrorism (COLUB): This platform brings together various competent administrations to combat money laundering and terrorism financing.

Challenges and Limitations

The effectiveness of these efforts is limited by a lack of resources, coordination, and a clear national strategy. The DRC’s AML/CFT system remains relatively ineffective due to these challenges.