Financial Crime World

Eritrea’s Banking Regulation Updates: A Review of the Country’s Compliance with International Standards

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Eritrea’s banking sector has undergone significant changes in recent years, with the country working to improve its compliance with international standards on anti-money laundering and combating the financing of terrorism (AML/CFT). In this review, we assess Eritrea’s progress in implementing the Financial Action Task Force (FATF) Recommendations, which provide a framework for countries to prevent and combat money laundering, terrorist financing, and other financial crimes.

Progress Made

According to the FATF Recommendations, Eritrea has made some progress in implementing technical requirements. For instance:

  • It has largely complied with recommendations on assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2) are also largely in place
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6) have been implemented

Areas Requiring Improvement

However, there are areas where Eritrea requires improvement, including:

  • Measures to combat the proliferation of weapons of mass destruction (R.7)
  • Regulation and supervision of non-profit organizations (R.8)

Additionally, Eritrea has faced challenges in implementing certain recommendations, such as:

  • Financial institution secrecy laws (R.9)
  • Customer due diligence (R.10)
  • Record keeping (R.11)
  • Measures to combat money laundering and terrorist financing in the context of new technologies (R.15)
  • Regulation and supervision of DNFBPs (R.22, R.23, R.28)

Progress in Other Areas

Despite these challenges, Eritrea has made progress in other areas, including:

  • Compliance with recommendations on financial intelligence units (R.29)
  • Powers of supervisors (R.27)
  • Responsibilities of law enforcement and investigative authorities (R.30)
  • International cooperation in the fight against money laundering and terrorist financing, including:
    • Mutual legal assistance (R.37)
    • Other forms of international cooperation (R.40)

Conclusion

While Eritrea has made progress in implementing certain FATF Recommendations, there are still areas where improvement is needed to ensure the country’s banking sector is fully compliant with international standards on AML/CFT. As such, Eritrea should prioritize addressing these gaps and continue to work towards improving its AML/CFT regime.