Financial Sector Compliance Challenges Remain in Madagascar Despite Progress, Report Finds

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Madagascar has made significant strides in addressing technical compliance shortcomings identified in its 2018 Mutual Evaluation Report. However, despite this progress, the country still faces several challenges in the financial sector.

Notable Improvements

The report highlights notable improvements in Madagascar’s compliance status. Specifically:

• Recommendation 1 was upgraded from non-compliant to compliant.
• Recommendations 10, 16, and 34 were upgraded from non-compliant to partially compliant.
• Recommendations 13, 19, and 32 saw improvements, with ratings upgraded to compliant, largely compliant, and partially compliant respectively.

Ongoing Challenges

Despite these advances, Madagascar will remain in enhanced follow-up to address ongoing compliance challenges. The country’s financial sector continues to face obstacles in implementing effective anti-money laundering and combating the financing of terrorism (AML/CFT) measures. This highlights the need for sustained efforts to strengthen its regulatory framework and enforcement mechanisms.

Recommendations for Improvement

To address these ongoing challenges, Madagascar is advised to focus on:

• Strengthening its regulatory framework to ensure effective implementation of AML/CFT measures.
• Enhancing enforcement mechanisms to prevent and detect financial crimes.
• Providing sufficient resources and training to regulators and financial institutions to support compliance with AML/CFT regulations.

By addressing these challenges, Madagascar can continue to make progress in strengthening its financial sector and improving its overall compliance with international standards.