Eritrea Fails to Meet International Standards on Financial Crime

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Eritrea’s Vulnerability to Money Laundering and Terrorism Financing Exposed

A recent report from a global watchdog has highlighted Eritrea’s shortcomings in implementing international standards to prevent financial crime, leaving the country vulnerable to illicit activities.

Key Findings

• Eritrea scored poorly on 13 out of 40 indicators, highlighting its failure to establish robust laws and regulations to combat financial crimes.
• Significant gaps were identified in areas such as non-profit organizations, customer due diligence, and beneficial ownership transparency.

Consequences of Inaction

Eritrea’s lack of progress in implementing the Financial Action Task Force (FATF) Recommendations has raised concerns among international experts. They warn that the country’s weaknesses can facilitate illicit flows and undermine its efforts to rebuild after years of conflict.

Risks Associated with Eritrea’s Vulnerabilities

• Exposure to risks associated with cash couriers, wire transfers, and other high-risk activities.
• Inability to implement effective customer due diligence measures, making it easier for individuals and entities to disguise illicit transactions.

Experts’ Concerns

Experts say that Eritrea’s poor performance in this area is a major concern, given the country’s history of conflict and its strategic location in the Horn of Africa. They warn that if left unchecked, financial crime can undermine Eritrea’s economic development and stability.

Urgent Action Required

The report has sparked calls for Eritrea to take urgent action to address its shortcomings and implement robust anti-money laundering and combating terrorism financing (AML/CFT) measures. International partners are urging the country to prioritize this issue and work with global experts to strengthen its regulatory framework and improve its overall AML/CFT capacity.