Financial Crime World

FATF Failure to Update Legal Framework Hinders Efforts Against Money Laundering and Terrorism in DRC

KINSHASA - The Democratic Republic of Congo’s (DRC) efforts to combat money laundering, terrorist financing, and the proliferation of weapons of mass destruction have been hindered by the failure to update its legal framework, experts say.

Obstacles to Effectiveness

The Action Task Force (FATF), an intergovernmental body created in 1989 by G7 Ministers, has identified the DRC’s lack of progress in updating its legal framework as a major obstacle to the effectiveness of the system. This failure hinders the country’s ability to effectively combat money laundering and terrorist financing.

Law No. 22/068: A Step Towards Reform

To address this issue, Law No. 22/068 was adopted, aiming to reform the framework and bring it in line with FATF recommendations, UN Security Council Resolutions, and the DRC’s constitutional requirements. This law establishes new institutions, including:

  • National Financial Intelligence Unit (CENAREF): responsible for collecting and processing financial intelligence on money laundering and terrorist financing.
  • Interministerial Committee on Combating Money Laundering and Terrorist Financing (CILB): facilitates coordination and policy definition.
  • Advisory Committee on the Fight Against Money Laundering and Terrorist Financing (COLUB): provides guidance and support.

New Preventive Measures

The law introduces new preventive measures, including:

  • Constant monitoring: financial institutions are required to monitor transactions continuously.
  • Identification of beneficial owners: ensures that those with a significant interest in companies or organizations are identified.
  • Reporting of suspicious activities: financial institutions must report any suspicious transactions to the authorities.

Strengthened Sanctions Regimes

Sanctions regimes have also been strengthened to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction.

Digitalization Efforts

In addition, the DRC is witnessing a growing trend towards digitization, with the adoption of Law No. 23/010 on Digital Code defining the institutional framework for the digitally enabled services sector. This move aims to:

  • Regulate electronic commerce: ensures transparency and security in online transactions.
  • Advertise and identify individuals: protects consumers from fraudulent activities.
  • Process data securely: safeguards personal data.

Experts’ Views

Experts believe that this development will contribute to financial inclusion, consumer protection, while also addressing challenges related to banking security and solvency of credit institutions. However, constant technological innovations require continuous adaptation of the system, including revisions and new laws.

Conclusion

The DRC’s efforts to combat money laundering and terrorist financing are crucial in a region plagued by organized crime and instability. It is essential that the country continues to strengthen its legal framework to prevent these threats from infiltrating its economy.