Financial Crime World

Madagascar’s Fight Against Money Laundering and Terrorist Financing Remains Inadequate, Experts Say

Despite acknowledging steps taken to address deficiencies in its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, Madagascar has failed to make sufficient progress to warrant an improvement in its ratings. The country’s technical compliance with international standards remains a concern, according to experts.

Technical Compliance Remains a Concern

The East Africa Anti-Money Laundering Group (ESAAMLG), which monitors Madagascar’s efforts, noted that while some initial steps have been taken to address deficiencies identified under various recommendations, the information provided does not indicate sufficient progress has been made. As a result, ratings for five key areas - Recommendations 5, 12, 13, 14, and 32 - will remain as “Priority Compliance” (PC).

Areas of Concern

  • Recommendation 5: The lack of effective measures to identify and report suspicious transactions
  • Recommendation 12: The absence of a robust risk-based approach in the regulation of financial institutions
  • Recommendation 13: The failure to establish a functional and independent Financial Intelligence Unit (FIU)
  • Recommendation 14: The inadequate monitoring and supervision of non-financial businesses and professions
  • Recommendation 32: The lack of effective measures to prevent the misuse of legal persons and arrangements

Call for Continued Progress

The ESAAMLG has called on Madagascar to continue reporting back on its progress in strengthening its implementation of AML/CFT measures, which are crucial in preventing the misuse of financial systems for illicit activities. The lack of significant improvement raises concerns about the country’s ability to effectively combat money laundering and terrorist financing.

In conclusion, Madagascar’s efforts to address deficiencies in its anti-money laundering and combating the financing of terrorism regime have not yielded sufficient results, leaving experts concerned about the country’s ability to prevent the misuse of financial systems for illicit activities.