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Sao Tome and Principe Financial Institutions Removed from FATF Blacklist

After years of efforts to comply with international standards, Sao Tome and Principe has been removed from the Financial Action Task Force’s (FATF) blacklist of countries with strategic deficiencies in their anti-money laundering and combating the financing of terrorism (AML/CFT) standards.

Progress Made by Sao Tome and Principe

The FATF made this announcement on October 18, 2013, after assessing the progress made by Sao Tome and Principe in addressing its AML/CFT framework. While the country still has some deficiencies, the FATF deemed that it had made sufficient progress to be removed from the blacklist.

Challenges Faced by Small Countries

Sao Tome and Principe’s removal from the blacklist is seen as a positive development, particularly given the challenges faced by small and poor countries in complying with international standards. The country has been working closely with the International Governmental Action Group against Money Laundering in West Africa (GIABA) to improve its AML/CFT framework.

Legislation Introduced

In 2010, Sao Tome and Principe introduced legislation aimed at preventing money laundering and combating terrorism financing. However, this law was deemed insufficient, leading to the country’s inclusion on the FATF blacklist. In response, the government took various actions to address the deficiencies, including:

  • Publishing a detailed report on its AML/CFT framework
  • Introducing new legislation

New Legislation

The new legislation, Lei No. 8/13, came into force in October 2013 and is considered to be compliant with international standards. The law defines money laundering and terrorism financing crimes, sets out sanctions for non-compliance, and establishes a supervisory body for financial institutions.

Ongoing Challenges

Despite this progress, Sao Tome and Principe remains vulnerable to money laundering and terrorist financing due to its limited resources and lack of technical and financial assistance. Nevertheless, the country’s efforts to improve its AML/CFT framework are seen as a positive step towards strengthening its financial system and reducing the risks associated with criminal activity.

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