Financial Crime World

DRC’s Financial Sector Struggles to Keep Pace with Global Efforts Against Money Laundering

Challenges in Combating Money Laundering, Terrorist Financing, and Weapons Proliferation

The Democratic Republic of Congo (DRC) is facing significant challenges in its efforts to combat money laundering, terrorist financing, and the proliferation of weapons of mass destruction. Despite the country’s recent adoption of Law No. 22/068, which aims to reform the financial sector and bring it in line with international standards, experts warn that more needs to be done to address the ongoing problems.

FATF Criticisms

The Financial Action Task Force (FATF), an intergovernmental body established in 1989 by the Ministers of States belonging to the G7, has long been critical of the DRC’s failure to update its legal framework in accordance with changes to the FATF recommendations. The country’s non-membership of the FATF has hindered efforts to effectively combat money laundering and terrorist financing.

New Laws and Regulations

Law No. 22/068 aims to address some of these issues by establishing a National Financial Intelligence Unit (CENAREF) and an Interministerial Committee on Combating Money Laundering and Financing of Terrorism and Proliferation (CILB). The law also introduces new obligations for constant monitoring, including the requirement that any transaction in Congolese francs or other currency in an amount generally equal to or greater than US$10,000 may not be paid in cash or by bearer security.

Ongoing Challenges

  • Banking Sector Corruption: The country’s banking sector is still plagued by corruption and lack of transparency, making it vulnerable to money laundering and other financial crimes.
  • Outdated IT Systems: The DRC’s credit institutions have been slow to adapt to global technological developments, with many still relying on outdated IT systems. This has left them vulnerable to cyber attacks and other forms of financial crime.

Digital Code Law

The recent adoption of Law No. 23/010 on Digital Code, which aims to regulate the digital sector, has been met with mixed reactions. While the law introduces new measures to prevent fraud and protect personal data, some experts have raised concerns about its effectiveness in addressing the ongoing problems in the financial sector.

Conclusion

While Law No. 22/068 and Law No. 23/010 represent important steps forward for the DRC’s financial sector, more needs to be done to address the ongoing problems. The country must continue to work towards improving its financial sector and addressing the challenges posed by money laundering, terrorist financing, and the proliferation of weapons of mass destruction.