Financial Crime World

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Non-Membership of FATF and Failure to Update Legal Framework: A Major Obstacle to Combating Money Laundering in the DRC

The Democratic Republic of Congo (DRC) has long been plagued by the lack of effective measures to combat money laundering, terrorist financing, and proliferation of weapons of mass destruction. The non-membership of the Financial Action Task Force (FATF), an intergovernmental body created in 1989 by the Ministers of States belonging to the G7, and the failure to update its legal framework in accordance with the changes to the FATF recommendations have been major obstacles to the effectiveness of the system.

Establishing a Stronger Framework

To address this issue, Law No. 22/068 was enacted to reform the framework regarding Article 122 point 6 and Article 215 of the Constitution of 18 February 2006 as amended by Law No. 11/002 of January 2011 revising certain articles of the Constitution of the DRC. The law also aims to comply with Relevant Resolution Nos 1267, 1988, 1989, and 1373 of the United Nations Security Council, the 40 FATF recommendations and their subsequent updates, and Actions recommended in the DRC mutual evaluation report, following the second cycle methodology, by GABAC.

New Institutions and Strengthening Preventive Measures

The law establishes three new institutions:

  • The National Financial Intelligence Unit (CENAREF), responsible for collecting, analyzing, and disseminating financial intelligence to prevent money laundering and terrorist financing.
  • The Interministerial Committee on Combating Money Laundering and Terrorist Financing (CICMLFTF), tasked with coordinating the efforts of various government agencies to combat money laundering and terrorist financing.
  • The National Authority for Combating Money Launderling (ANLC).

The law also strengthens preventive measures by:

  • Requiring credit institutions to maintain accurate records of their transactions and to report any suspicious activities.
  • Introducing penalties for non-compliance, including fines and imprisonment.

Digitalization of Financial Services

The DRC has been actively promoting the digitalization of financial services. The recent adoption of Law No. 23/010 of March 2023 on Digital Code aims to define the institutional framework of the digitally enabled services sector. The law establishes preventive verification systems, including authorization, declaration, and approval processes.

Conclusion

The non-membership of FATF and failure to update the legal framework have been major obstacles to combating money laundering in the DRC. However, the recent enactments of Law No. 22/068 and Law No. 23/010 aim to address these issues by establishing new institutions, strengthening preventive measures, and promoting digitalization of financial services. The continuous adaptation of the system to ongoing technological innovations and challenges will be crucial in ensuring the efficient and secure functioning of the market.

About the Author

This article has been written by a member of GLI’s international panel of experts, who is a leading professional in their field. The article has been reviewed and edited by GLI’s in-house editorial team to ensure accuracy, relevance, and style.