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What is Money Laundering in Djibouti?

Money laundering, a complex and secretive practice, has been a growing concern globally, with many countries struggling to implement effective measures to prevent it. In Djibouti, a small but strategically located country in the Horn of Africa, money laundering has become a significant issue.

Money Laundering in Djibouti: A Growing Concern

According to a recent report by the Financial Action Task Force (FATF), Djibouti’s rating on technical compliance with FATF Recommendations stands at largely compliant (LC) for most requirements. However, there are some areas where improvement is needed.

National Cooperation and Coordination

One key area of concern is national cooperation and coordination, which was rated as largely compliant (LC). The report noted that while Djibouti has established a number of anti-money laundering agencies and institutions, there is still a need for greater coordination and communication between them.

Confiscation and Provisional Measures

Another area of concern is the confiscation and provisional measures required to prevent money laundering. While Djibouti has made some progress in this area, it was rated as partially compliant (PC), indicating that further improvements are needed.

Terrorist Financing

The report also highlighted concerns about terrorist financing, with Djibouti rated as partially compliant (PC) for its efforts to combat the financing of terrorism. The country’s lack of effective measures to target financial sanctions related to terrorism and terrorist financing was a particular area of concern.

Non-Profit Organisations

In addition, Djibouti’s rating on non-profit organisations was classified as non-compliant (NC), with the report noting that the country’s laws and regulations do not adequately regulate these entities.

Areas for Improvement

The FATF report also identified several areas where Djibouti needs to improve its compliance. These include:

• Customer due diligence
• Record keeping
• Internal controls
• Foreign branches and subsidiaries

Progress Made

Despite these challenges, Djibouti has made some progress in implementing anti-money laundering measures. The country’s financial intelligence unit was rated as compliant (C), and the report noted that law enforcement and investigative authorities have powers to investigate money laundering offenses.

Conclusion

While Djibouti has made some progress in combating money laundering, there are still significant challenges to be addressed. The country needs to improve its national cooperation and coordination, confiscation and provisional measures, and efforts to combat terrorist financing. By doing so, Djibouti can strengthen its anti-money laundering regime and reduce the risk of financial crime.