Financial Crime World

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Risk-Based Supervision Under ML/TF in DNFBP Sector Non-Existent in Cabo Verde

A recent report has highlighted the lack of effective risk-based supervision under money laundering (ML) and terrorist financing (TF) in the Designated Non-Financial Businesses and Professions (DNFBP) sector in Cabo Verde. The country’s supervisors have failed to issue guidelines or provide relevant information on ML/TF-related issues, resulting in a significant gap in the fight against financial crime.

Lack of Supervision

According to the report, there are no ML/TF-related sanctions applied in the DNFBP sector, and no training has been provided by supervisors to increase the level of knowledge and understanding of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) among DNFBPs. This lack of supervision has created an environment where financial crime can thrive, putting the country’s financial system at risk.

Ineffective AML/CFT System

The report also highlighted that Cabo Verde’s AML/CFT system is not effective in preventing ML/TF activities, as it lacks a comprehensive approach to combating these crimes. The country’s authorities have failed to implement measures to identify and mitigate the risks associated with DNFBPs, such as real estate agents, lawyers, and accountants.

Recommendations

The assessment team recommends that Cabo Verde’s authorities:

  • Provide training to DNFBPs on AML/CFT requirements
  • Conduct regular inspections and audits to ensure compliance with AML/CFT regulations
  • Implement sanctions against entities that fail to comply with AML/CFT regulations
  • Improve the effectiveness of its FIU by increasing resources and strengthening its capacity to receive and analyze financial intelligence
  • Enhance international cooperation and information sharing to prevent ML/TF activities

Technical Compliance Ratings

The report provided technical compliance ratings, with some areas rated as non-compliant or partially compliant. These areas include:

  • R.1: Customer due diligence (non-compliant)
  • R.2: Record-keeping requirements (partially compliant)
  • R.3: Reporting of suspicious transactions (compliant)
  • R.4: Implementation of targeted financial sanctions (partially compliant)

Conclusion

Overall, the report highlights the need for Cabo Verde’s authorities to take immediate action to improve the effectiveness of its AML/CFT system and prevent financial crime from thriving in the country. By implementing these recommendations, Cabo Verde can improve the effectiveness of its AML/CFT system and prevent financial crime from thriving in the country.