Types of Financial Crimes in São Tomé and Principe: A Growing Concern

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São Tomé and Principe, a small island nation off the coast of West Africa, has long been plagued by financial crimes. The country’s weak regulatory framework and inadequate supervision have created an environment conducive to money laundering, terrorist financing, and other financial vices.

FATF Report Highlights Areas of Concern

According to the latest report from the Financial Action Task Force (FATF), São Tomé and Principe is largely compliant with many of the technical requirements set forth in the FATF Recommendations. However, there are several areas where the country falls short:

Non-Profit Organizations

Lack of transparency and regulatory oversight has led to concerns about money laundering and terrorist financing through non-profit organizations.

Financial Institution Secrecy Laws

Banking secrecy laws make it difficult for authorities to access information necessary to combat financial crimes.

Customer Due Diligence

Banks often fail to conduct adequate customer due diligence, making it easier for criminals to launder money.

Record Keeping

Financial institutions frequently lack robust record-keeping systems, making it challenging to track transactions and identify suspicious activity.

Other Areas of Concern

Confiscation and Provisional Measures

Laws and regulations related to confiscation and provisional measures are unclear, making it difficult for authorities to seize assets linked to financial crimes.

Terrorist Financing Offence

The country lacks a specific terrorist financing offence in its criminal code, which hinders efforts to combat this type of financial crime.

São Tomé and Principe does not have a system in place for imposing targeted financial sanctions related to the proliferation of weapons of mass destruction.

Progress Made

Despite these challenges, São Tomé and Principe has made some progress in recent years. The country has implemented several measures aimed at improving its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, including:

Strengthening Customer Due Diligence Requirements

Enhancing record-keeping systems for financial transactions

Improving Coordination between Law Enforcement Agencies and Regulatory Bodies

Strengthening coordination between law enforcement agencies and regulatory bodies to combat financial crimes effectively.

Conclusion

While São Tomé and Principe has made progress, much work remains to be done. The country must continue to strengthen its regulatory framework and improve its AML/CFT regime in order to combat financial crimes effectively. Authorities must also increase transparency and cooperation with international partners to combat the growing threat of financial crimes.