Money Laundering Remains Major Concern in Cape Verde

Despite efforts to combat money laundering and terrorist financing (AML/CFT), Cape Verde continues to face significant challenges in implementing effective measures against these threats.

Challenges in Implementing Effective Measures

Cape Verde’s Financial Information Unit (FIU) has been constrained by financial, logistical, and human resource challenges, hindering its ability to effectively monitor cross-border movements of physical cash, precious metals, and other commodities. The lack of progress in implementing recommendations from a 2011 mutual evaluation report is also a major concern.

Shell Companies in Real Estate Sector

The use of “shell companies” in the real estate sector to conceal or disguise the illicit origin of dirty money remains a significant issue. More than 90% of suspicious transaction reports (STRs) filed were from commercial banks, primarily located on the island of San Diego.

Limited Progress and Challenges Ahead

While the FIU received over 100 STRs in 2012, only five were processed and referred to the Attorney General, suggesting limited involvement by non-banking entities in AML/CFT efforts. Furthermore, Cape Verde has yet to adopt a national AML/CFT strategy, and its Inter-Ministerial Committee on AML/CFT has been dormant since 2010.

GIABA’s Sensitization Seminar

To address these challenges, the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) organized a two-day sensitization seminar for journalists in Praia. The seminar aimed to build awareness and promote effective dissemination of AML/CFT issues. Participants from Francophone and Lusophone ECOWAS countries, including Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, Guinea, Guinea-Bissau, Mali, Niger, Senegal, and Togo, were in attendance.

Recommendations for Improvement

The report highlighted the need for further technical assistance to provide the FIU with adequate resources, improve monitoring of cross-border movements, regulate non-financial sectors, and provide continuous training to investigation and prosecution authorities. The GIABA official emphasized that “Cape Verde is a peaceful and stable country, but it remains vulnerable to money laundering and associated criminal activities.” The country must take concrete steps to address these challenges and ensure that its financial system is not exploited by criminals.

Call to Action

In response to the report’s findings, Cape Verde has been urged to provide the FIU with necessary resources, operationalize the Inter-Ministerial Committee on AML/CFT, and adopt a national AML/CFT strategy.