Financial Crime World

Financial Crimes Rampant in Sao Tome and Principe’s Fishing Industry

A recent report by the Financial Action Task Force (FATF) has highlighted the widespread presence of financial crimes in Sao Tome and Principe’s fishing industry. The report identified several key areas of concern, which are detailed below.

Country Evaluation

Sao Tome and Principe scored largely compliant (LC) on 14 out of 40 recommendations, partially compliant (PC) on 12, and non-compliant (NC) on 14. These ratings reflect the extent to which the country has implemented technical requirements for preventing money laundering and combating terrorist financing.

Areas of Concern

The report highlighted several areas of concern, including:

  • Lack of Effective Measures: Sao Tome and Principe lacks effective measures in place to prevent money or value transfer services from being used for criminal purposes.
  • Financial Institution Secrecy Laws: While the country’s financial institution secrecy laws are compliant (C), there are concerns that these laws may be exploited by criminals.
  • Customer Due Diligence and Record Keeping: Sao Tome and Principe received low marks for its implementation of customer due diligence and record keeping requirements. More needs to be done to ensure that financial institutions are adequately verifying the identities of their customers.

Fishing Industry Vulnerabilities

The fishing industry was identified as a key sector vulnerable to money laundering and terrorist financing. The report recommended that Sao Tome and Principe take steps to:

  • Improve National Cooperation and Coordination: Improve its national cooperation and coordination efforts, as well as its supervision and regulation of financial institutions operating in the fishing industry.
  • Enhance Supervision and Regulation: Strengthen its supervision and regulation of financial institutions operating in the fishing industry.

Transparency Concerns

The FATF also expressed concerns about the lack of transparency and beneficial ownership of legal persons and arrangements in Sao Tome and Principe. This lack of transparency makes it difficult for authorities to track the flow of funds and identify suspicious transactions.

Response and Next Steps

In response to these findings, Sao Tome and Principe has pledged to take steps to improve its anti-money laundering and counter-terrorist financing regime. The country has committed to implementing a number of recommendations outlined in the report, including:

  • Strengthening Customer Due Diligence Requirements: Strengthen customer due diligence requirements for financial institutions operating in the fishing industry.
  • Improving Record Keeping Practices: Improve record keeping practices for financial institutions operating in the fishing industry.

Conclusion

The FATF report is a critical tool for identifying areas where countries can improve their efforts to prevent financial crimes. By addressing these concerns, Sao Tome and Principe can help to protect its financial system and prevent the misuse of its fishing industry by criminals.