Guinea’s Political Instability Threatens Economic Progress and Undermines AML/CFT Efforts

Socio-Political Challenges and Economic Impact

The Republic of Guinea is facing a complex web of socio-political challenges that pose a threat to its economic progress and impede its ability to effectively combat financial crimes. Guinea’s political situation remains tense, with ongoing disputes over the voter register leading to the postponement of legislative elections and clashes between opposition supporters and security forces.

• Political instability hinders foreign investment and business opportunities
• High unemployment and poverty rates increase vulnerability to criminal activities

Economic Overview

With a ranking as the 179th best place to do business in the World Bank’s 2012 Doing Business Report, Guinea struggles to overcome governance challenges. The economy was expected to expand by 5.1% in 2012, but political instability and declines in gold and diamond production hindered growth.

• Underdeveloped financial sector with assets equal to 9.7% of GDP
• Mere USD78 million in remittances in 2012, equivalent to 1.5% of GDP

Prevalence of Predicate Criminal Activities and Corruption

With high unemployment and poverty rates, Guinea remains vulnerable to a range of predicate criminal activities, including the transit and repackaging of narcotics drugs en route to Europe and other destinations. Corruption also persists, with the attempted embezzlement of 13 billion Guinean Francs leading to the deaths of several officials.

• Guinea ranked 154th out of 174 countries in the 2012 Transparency International Corruption Perception Index

AML/CFT Challenges

Despite efforts by the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) to strengthen Guinea’s AML/CFT framework, significant challenges remain.

• Absence of an effective and functioning Financial Intelligence Unit (FIU)
• Yet to adopt and promulgate a CFT law
• Lack of cooperation among relevant institutions

Technical Assistance and Support from GIABA

A pre-evaluation workshop was organized in March 2012, but further action is necessary to ensure Guinea’s AML/CFT improvements.

• Guinea requires additional technical assistance to elaborate its national AML/CFT strategy
• Strengthen its Technical Committee
• Provide training to its judicial personnel on financial crimes

Imperative for Political Will and Support from Guinean Authorities

To address the significant deficiencies, Guinea must prioritize the establishment of the FIU, the adoption and promulgation of the TF law, as well as the elaboration of an AML/CFT national strategy. GIABA remains ready to support these efforts with political will and a commitment from the Guinean authorities.

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