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Eritrea’s Banking Regulations Compliance Under Scrutiny

As part of its efforts to combat money laundering and terrorist financing, Eritrea has undergone a thorough assessment of its banking regulations compliance. The country has been evaluated against the 40 recommendations set by the Financial Action Task Force (FATF), with some areas showing significant improvement while others still requiring attention.

Progress Made

According to the report, Eritrea has made progress in several key areas:

  • Assessing Risk and Applying a Risk-Based Approach (R.1): The country has been rated “largely compliant” in regards to assessing risk.
  • National Cooperation and Coordination (R.2): Eritrea has also shown improvement in its national cooperation and coordination efforts.
  • Targeted Financial Sanctions related to Terrorism and Terrorist Financing (R.6): The country has made progress in implementing targeted financial sanctions.

Additionally, Eritrea has improved its:

  • Customer Due Diligence Measures (R.10)
  • Record Keeping Practices (R.11)

Areas Requiring Improvement

However, there are still several areas where Eritrea falls short of compliance:

  • Handling Non-Profit Organizations (R.8): The country has been rated “non-compliant” in regards to its handling of non-profit organizations.
  • Transparency and Beneficial Ownership of Legal Persons and Arrangements (R.24): Eritrea has also been deemed “non-compliant” for its lack of transparency and beneficial ownership disclosure.
  • Confiscation and Provisional Measures (R.4)
  • Terrorist Financing Offence (R.5)
  • Financial Institution Secrecy Laws (R.9)

Challenges Ahead

Eritrea’s banking sector has also been criticized for its lack of transparency and cooperation with international authorities:

  • Lack of Guidance and Feedback to Financial Institutions (R.34): The country has failed to provide adequate guidance and feedback to its financial institutions.
  • Lack of Sanctions against Individuals and Entities Involved in Money Laundering and Terrorist Financing: Eritrea’s failure to impose sanctions on individuals and entities involved in money laundering and terrorist financing has raised concerns.

Conclusion

Despite these challenges, Eritrea’s progress in several key areas is a positive step towards improving its banking regulations compliance. The country must continue to work towards addressing its shortcomings and implementing robust measures to prevent money laundering and terrorist financing.