Financial Crime World

Central African Republic Fails to Effectively Combat Money Laundering

A new report has highlighted significant shortcomings in the Central African Republic’s (CAR) efforts to combat money laundering (ML) and terrorist financing (TF). The country’s lack of a criminal policy on anti-money laundering (AML)/counter-terrorist financing (CFT) has led to inadequate identification and prosecution of ML cases.

Inadequate Efforts to Combat Money Laundering

The report reveals that predicate offences prosecuted in CAR do not adequately match the country’s threat and risk profile, making it difficult to assess the consistency between prosecuted crimes and national security concerns. Furthermore, investigative and prosecuting authorities lack expertise in AML/CFT, leading to ineffective investigations and prosecutions.

Economic Instability and Security Challenges

CAR is facing significant economic instability and security challenges, including periods of political instability and armed conflict. The country’s fragile security situation remains a major concern, with various conflicts having a devastating impact on economic and social development.

In an effort to revitalize its economy, CAR passed a law governing transactions linked to cryptocurrencies in April 2022, establishing bitcoin as an official currency. However, this move has raised concerns about the potential for increased ML/TF risks.

Money Laundering/Terrorist Financing Risks

CAR is exposed to a range of ML/TF risks, including:

  • Misappropriation of public funds
  • Illicit trafficking in precious stones and metals
  • Drug trafficking
  • Corruption
  • Human trafficking

The country’s TF threat is characterized by the existence of armed groups on its territory, which poses a significant risk to national security.

Recommendations

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To address the identified shortcomings, the report recommends:

  • Developing a comprehensive criminal policy on AML/CFT.
  • Improving investigative and prosecuting authorities’ expertise in AML/CFT.
  • Enhancing international cooperation through mutual legal assistance and extradition requests.
  • Implementing effective sanctions for non-compliance with AML/CFT obligations.
  • Strengthening the country’s AML/CFT framework to effectively combat ML/TF risks.

Conclusion

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The report’s findings highlight the need for CAR to take concrete steps to strengthen its AML/CFT framework and address the significant ML/TF risks facing the country.