Financial Crime World

Title: Congo’s AML/CFT System: GABAC Evaluates Key Risks, Compliance, and Priorities

Subtitle: Democratic Republic of Congo’s Progress and Challenges in Countering Money Laundering and Terrorist Financing

The Democratic Republic of Congo (DRC) underwent a Mutual Evaluation by the Action Group against Money Laundering in Central Africa (GABAC), an FATF-Style Regional Body, to assess its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system. This evaluation, as outlined in the GABAC Mutual Evaluation Report from April 2021, reveals the country’s risks, level of compliance, and priority measures for improving its AML/CFT regime.

Key Findings

  1. Insufficient Results with Recognized Efforts: The DRC’s legal framework for AML/CFT, including the establishment of the National Financial Intelligence Unit (CENAREF) and the Consultative Committee to Combat Money Laundering and the Financing of Terrorism (COLUB), has yet to yield satisfactory results due to a lack of resources and insufficient understanding of ML/FT risks.

  2. Substantial Money Laundering Risks: The DRC faces substantial risks related to money laundering, with key sectors such as mining and forestry particularly vulnerable. Moreover, the country is exposed to terrorist financing due to ongoing instability and porous borders.

  3. Weaknesses in the Framework: The DRC has significant weaknesses within its legislative and regulatory framework, leaving some financial institutions and designated non-financial businesses and professions (DNFBPs) outside its AML/CFT efforts.

  4. Limited Financial Intelligence: Despite receiving a low number of Suspicious Transaction Reports (STRs), the Congolese Financial Intelligence Unit (CENAREF) has limited operational capabilities, and its protection of information is often questioned.

  5. Investigatory and Judicial Processes: Weaknesses in the investigatory and judicial processes hinder effective implementation of the AML/CFT measures, and the lack of mutual legal assistance procedures is a significant challenge to the freeze and confiscation of terrorist assets and other property.

Challenges and Recommendations

To address these challenges and strengthen its AML/CFT regime, the DRC has received several recommendations from GABAC:

  • Improve risk assessment and application of a risk-based approach
  • Increase international cooperation
  • Enhance the supervision of financial institutions and DNFBPs
  • Effectively use financial intelligence
  • Improve procedures for dealing with listed individuals and terrorist assets

Conclusion

The evaluation by GABAC of the Democratic Republic of Congo’s AML/CFT system highlights both the country’s progress and the challenges it faces in combating money laundering and terrorism financing. By addressing these areas, the DRC can continue to build a strong framework to protect its financial system and mitigate associated risks.