Financial Crime World

ETHIOPIA FALLS SHORT IN COMPLIANCE WITH FINANCIAL ACTION TASK FORCE (FATF) RECOMMENDATIONS

Overview

Addis Ababa, ETHIOPIA - A recent evaluation by the Financial Action Task Force (FATF) has revealed that Ethiopia has made significant strides in implementing global anti-money laundering and combating terrorism financing standards. However, the country still lags behind in several areas.

Key Findings

  • Compliance Status: Ethiopia received ratings of “partially compliant” or “largely compliant” on 15 out of 40 recommended measures.
  • Strengths:
    • National cooperation and coordination (R.2)
    • Customer due diligence (R.10)
    • Regulation and supervision of financial institutions (R.26)
  • Weaknesses:
    • Assessing risk and applying a risk-based approach (R.1)
    • Money laundering offence (R.3)
    • Confiscation and provisional measures (R.4)

Areas for Improvement

The report highlights several areas where Ethiopia requires improvement, including:

  • Targeted Financial Sanctions: Implementing targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Regulation of DNFBPs: Regulating and supervising designated non-financial businesses and professions (DNFBPs) (R.28)

Recommendations

The FATF evaluation provides several recommendations for Ethiopia to improve its compliance with the recommended measures, including:

  • Strengthening National Cooperation: Strengthening national cooperation and coordination mechanisms.
  • Enhancing Regulation of DNFBPs: Enhancing the regulation and supervision of DNFBPs.
  • Improving Targeted Financial Sanctions: Improving the implementation of targeted financial sanctions related to terrorism and terrorist financing.

Conclusion

Ethiopia has committed to addressing these recommendations and improving its compliance with the FATF Recommendations. The country’s progress will be closely monitored by the FATF, and it is expected to undergo a follow-up evaluation in the near future.