Financial Crime World

Chad’s Financial Institution Security Measures Face Scrutiny: FATF Mutual Evaluation Reveals Areas of Improvement

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The Financial Action Task Force (FATF) has recently released a mutual evaluation report on Chad’s efforts to combat money laundering and terrorist financing. The assessment evaluates the country’s implementation of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, revealing both progress and areas for improvement.

Progress Made

While there are still significant challenges to overcome, Chad has made some notable strides in implementing AML/CFT measures:

  • National cooperation and coordination have been strengthened
  • Money laundering and terrorist financing offenses have been criminalized
  • A financial intelligence unit (FIU) has been established

Areas for Improvement

Despite the progress made, the report identifies several areas where Chad falls short of international standards:

  • Laws and regulations related to financial institution secrecy are only partially compliant with FATF requirements
  • Measures to prevent money laundering and terrorist financing are considered insufficient and lack sufficient resources
  • Chadian banks rely heavily on third-party providers for customer due diligence and record-keeping, which raises concerns about the effectiveness of these measures
  • The country’s limited capacity to monitor and supervise financial institutions is a significant challenge
  • The FIU’s powers and resources are deemed insufficient to effectively carry out its mandate

Recommendations

To address these challenges, the FATF evaluation recommends that Chad:

  • Enhance customer due diligence and record-keeping requirements for financial institutions
  • Increase resources and powers for the FIU to enable it to effectively monitor and supervise financial institutions
  • Improve supervision and monitoring of financial institutions to prevent money laundering and terrorist financing

Conclusion

The FATF mutual evaluation serves as a wake-up call for Chad to take concrete steps to enhance its AML/CFT regime. By addressing these areas of concern, Chad can better protect its financial system from illicit activities and strengthen its international cooperation on AML/CFT issues.

By implementing the recommended measures, Chad can ensure that its financial institutions are adequately protected against money laundering and terrorist financing threats, ultimately promoting a safer and more stable financial environment for all.