Financial Crime World

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Guinea’s Anti-Money Laundering and Combating the Financing of Terrorism Regime Needs Strengthening

A recent evaluation by a leading regional organization has highlighted several weaknesses in Guinea’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime. While the country has made efforts to improve its national response, significant challenges remain.

Key Challenges

  • Low banking rate: Cash is the predominant form of transaction, making it difficult to implement effective AML/CFT measures.
  • Informal sector: The informal sector is prevalent, and corruption is widespread, further hindering efforts to combat money laundering and terrorist financing.
  • Poor understanding of ML/TF risks: The country’s understanding of money laundering and terrorist financing risks is poor, with a national risk assessment report still not widely disseminated or backed by an action plan three years after its completion.

Weaknesses in the Regime

  • National cooperation and coordination: National cooperation and coordination among authorities are lacking, making it challenging to develop and implement effective strategies to mitigate identified risks.
  • Financial Intelligence Unit (FIU): The FIU is not a member of the Egmont Group, which limits its access to foreign financial intelligence. Few law enforcement agencies use this information when investigating predicate offenses such as corruption, tax fraud, or drug trafficking.
  • System for detecting and communicating false declarations: Guinea’s system for detecting and communicating false declarations or non-declarations of cash and bearer negotiable instruments is defective and almost dysfunctional.

Additional Areas for Improvement

  • Lack of prioritization and resources for ML-related investigations and prosecutions
  • Inadequate training for law enforcement agencies
  • Confiscation of proceeds and instrumentalities of crime: No ML/TF-related confiscations have been recorded.
  • National policy and strategy to prevent terrorism: Guinea lacks a national policy and strategy to prevent terrorism and its financing, which has adverse impacts on coordination among sectoral responses.

Challenges in Bank Supervision

  • Risk-based approach: The risk-based approach is limited to banks only. Other sub-sectors, including insurance, foreign exchange bureaus, microfinance institutions, and electronic money institutions, lack a similar approach.
  • Supervision of designated non-financial businesses and professions (DNFBPs): Supervision of DNFBPs is still in its development phase.

Transparency Issues

  • Structural issues: Guinea faces structural issues linked to legal persons and arrangements. The country does not impose sanctions for non-compliance with relevant obligations.
  • Poor understanding of ML/TF risks: Guinea’s lack of transparency hinders efforts to combat money laundering and terrorist financing.

International Cooperation

  • No mechanism or adequate resources in place: International cooperation in AML/CFT remains insignificant, with no mechanism or adequate resources in place.

Conclusion

While Guinea has made efforts to improve its AML/CFT regime, significant challenges remain. Strengthening these weaknesses is crucial to prevent the country from being used as a haven for illicit activities and to protect its financial system from abuse.