Financial Crime World

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São Tomé e Príncipe Removes Financial Crimes from International Blacklist

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São Tomé e Príncipe 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, but Still Challenges Remain

The FATF made this decision after observing that while São Tomé e Príncipe had made progress in addressing its AML/CFT framework, it still contained several strategic deficiencies. However, due to the country’s small size and low impact on the international financial system, the FATF decided to allow it to continue working closely with the International Governmental Action Group against Money Laundering in West Africa (GIABA).

History of Challenges

São Tomé e Príncipe has faced difficulties in complying with international demands to regulate activities that may not be a priority domestically. Despite being a party to several international treaties and conventions, the country had insufficient legislation in place until recently.

Early Efforts

2010: Introduction of Legislation

In 2010, São Tomé e Príncipe introduced legislation to prevent money laundering and terrorism financing (Lei No. 15/2008). However, this law was deemed insufficient, leading to the country’s inclusion on the FATF’s blacklist.

Recommendations for Improvement

GIABA Report

GIABA published a report in May 2013 outlining recommendations for improvement. In response, the São Tomé e Príncipe Parliament adopted a fully amended and restated law on AML/CFT (Lei No. 8/13) on August 15, 2013.

New Legislation

The new law includes several key provisions:

  • Clear Description of Crimes: A clear description of crimes related to money laundering and terrorism financing
  • Legal Entities Held Criminally Liable: Legal entities can be held criminally liable
  • Definitions of Responsible Individuals: Definitions of responsible individuals, including those who manage legal entities, as well as a special regime for lawyers
  • Sanctions and Asset Confiscation: Sanctions that can be imposed and assets that can be confiscated in connection with criminal activities
  • Preventative Measures: Preventative measures for financial institutions and other entities subject to the law

Implementation and Challenges Ahead

The country’s central bank is designated as the supervisory body for financial institutions, while other entities are subject to supervision by regulatory bodies. A central agency has also been established to oversee AML/CFT regulations.

While São Tomé e Príncipe’s removal from the FATF blacklist is a positive development, the country still faces challenges in investigating and combating financial crimes due to limited resources. Moreover, countries like São Tomé e Príncipe often struggle to comply with international regulatory demands without external technical and financial assistance.