Financial Crime World

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Eritrea’s Transparency Crisis: Lack of Accountability and Corruption Plague the Country

In a stark reminder of the country’s lack of transparency and accountability, basic data regarding the state budget and asset disclosure remains publicly unavailable in Eritrea. The absence of auditing of state spending or income means that mismanagement and corruption go unchecked.

Military-Headed Special Courts: A Failure to Deliver Justice

The military-headed special courts, established to oversee corruption cases, have largely remained inactive, leaving citizens with no recourse against official wrongdoing. This lack of accountability creates a culture of impunity where those in power can act with reckless abandon.

International Cooperation: A Rare Occurrence

Eritrea’s attitude towards international cooperation has remained steady over the years, with the government viewing it as undesirable due to concerns about dependency. As a result, the country has opted for a strategy of self-reliance in economic and social development, relying on a poorly paid national service program to recruit the working-age population.

  • The diaspora is also subject to a 2% tax, which has not been well received by the international community.
  • Despite having laws in place to counter organized crime, Eritrea’s Constitution remains unenacted, leaving citizens without constitutional protections.

Criminal Justice and Security: A Climate of Impunity

Eritrea’s lack of an independent judiciary and democratic institutions has resulted in a climate of impunity, with crimes against humanity going unpunished over the past 25 years. The judiciary system is poorly organized and dependent on the government, with instances of interference by the executive branch.

  • Special courts, headed by military officers acting as lay judges, have become defunct, replaced by arbitrary activities of power holders.
  • Arbitrary arrest and detention are common, with due process systematically violated.
  • Prison conditions are harsh and overcrowded, with prisoners including children and former government officials held incommunicado for indefinite periods without charge or trial.

Economic and Financial Environment: A Perfect Storm

Eritrea’s informal, cash-based economy, limited regulatory structures, underground remittances, and prevalent use of money and value transfer services make it vulnerable to money laundering and related activities. The non-convertibility of the nakfa in international markets contributes to the use of underground remittance systems.

  • Despite enacting anti-money laundering laws, establishing a financial intelligence unit, and endorsing anti-money laundering/counter financing of terrorism (AML/CFT) policies, Eritrea has not submitted any reports on its AML/CFT endeavors.
  • The country’s economic regulatory capacity remains substandard due to the government’s irrational financial policy, which fixes the nakfa to the US dollar at a rate of 15 to 1.

Civil Society and Social Protection: A Bleak Landscape

The lack of victim and witness support mechanisms in Eritrea is an ongoing problem, with the government failing to take any measures to identify and support victims and witnesses of organized crime. The government has also made no effort to identify, protect, and support victims of trafficking.

  • Eritrean officials have no procedures in place to proactively identify trafficking victims among vulnerable groups.
  • Civil rights and freedom of expression and assembly are absent, with human rights routinely violated.
  • Independent media has been shut down since 2001, and Eritrea is one of the most notorious jailers of journalists in the world.

Overall, Eritrea’s lack of transparency, accountability, and democratic institutions creates a toxic environment where corruption, impunity, and human rights violations thrive. It is essential that the international community holds the government accountable for its actions and works towards creating a more just and equitable society in Eritrea.