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Terrorist Financing Prevention Strategies in Tanzania, United Republic of: EU’s Efforts and Objectives

The European Union (EU) has taken a proactive approach in preventing terrorist financing by identifying high-risk countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CFT) regimes. One such country is the United Republic of Tanzania.

What the EU is doing and why

To combat the global circulation of dirty money, international efforts are needed. The European Commission is working closely with its international partners, including the Financial Action Task Force (FATF), to identify jurisdictions having strategic deficiencies in their AML/CFT regimes. This listing helps protect the EU’s financial system and internal market by reducing the risks posed by these countries.

The EU has a list of high-risk third countries that have been identified as having strategic deficiencies in their AML/CFT frameworks. The latest version of this list was updated on December 12, 2023, and includes Tanzania among others.

Tanzania’s listing

Tanzania was added to the list due to its strategic deficiencies in its AML/CFT regime, posing significant threats to the EU’s financial system. This listing requires gatekeepers, such as banks, to exercise increased checks and control measures when conducting business relationships and transactions with high-risk countries.

Objectives of the list

The objectives of the list are threefold:

  • Protecting the integrity of the EU’s financial system and internal market
  • Reinforcing internal security
  • Promoting sustainable development

What are the steps?

The listing process follows a staged approach that can be divided into four parts:

  1. Pre-assessment: Determine the countries to be assessed and identify the level of priority.
  2. Assessment: Assess the relevant third countries’ AML/CFT regimes, starting with countries of the highest priority.
  3. Listing: List high-risk third countries that show strategic deficiencies in their AML/CFT regimes.
  4. Monitoring: Monitor progress of listed countries, continue monitoring of already reviewed countries, and assess additional countries.

Methodology

The European Commission developed a methodology in 2020 to ensure a fair and transparent process in identifying high-risk countries based on the faults in their national AML/CFT regimes posing significant threats to the EU’s financial system. The commission used this methodology to identify relevant countries that will be further analyzed over the period 2018-2025.

Planning of assessment

The European Commission carried out a pre-assessment to determine relevant countries to be assessed and the level of priority. Countries were considered relevant if they meet any of the following non-cumulative criteria:

  • A country is identified by the European External Action Service or by Europol as having a systemic impact on the integrity of the EU financial system.
  • A country was reviewed as an international offshore financial centre by the International Monetary Fund (IMF).
  • A country is considered economically relevant based on the strength of its economic ties with the EU and the magnitude of its financial sector.

Based on this assessment, the commission identified 132 jurisdictions that will be further analyzed over the period 2018-2025. The list of countries included in the scope includes Tanzania.

Evolution of the list

The European Commission has adopted several delegated acts regarding high-risk third countries under Directive (EU) 2015/849 and its power to adopt delegated acts.

  • FATF: The Financial Action Task Force is the main international body concerned with combating money laundering, the financing of terrorism and other threats to the integrity of the international financial system.
  • MONEYVAL: The Commission is an observer in Moneyval – the Council of Europe body assessing compliance with AML/CFT standards.
  • EGMOND: The Commission is an observer at the Egmont Group, an international organisation that provides financial intelligence units with a platform for the secure exchange of expertise and financial intelligence to combat money laundering, terrorist financing, and associated predicate offences.