Financial Crime World

Cape Verde Struggles to Combat Money Laundering and Terrorism Financing

Praia, Cape Verde - A Recent Assessment Reveals Gaps in Combating Financial Crimes

Despite efforts to combat money laundering (ML) and terrorism financing (TF), Cape Verde’s legal system falls short of international standards. According to a recent assessment by [insert organization], the country needs to strengthen its anti-money laundering (AML)/counter-terrorism financing (CFT) regime.

Shortcomings in Combating Money Laundering

  • Cape Verde criminalized ML in 1993, but the range of predicate offenses under existing legislation does not meet international standards.
  • There have been no convictions for ML offenses so far.

Limited Effectiveness of Financial Intelligence Unit (FIU)

  • The FIU lacks operational independence and autonomy to decide what information can be disseminated.
  • The FIU receives suspicious transaction reports (STRs) but performs limited analysis and informs the Public Ministry (PM).
  • The Judiciary Police (JP) has general powers to obtain information during investigations, but it does not have resources or expertise to adequately perform its investigative functions related to ML offenses.

Insufficient Measures Against Higher-Risk Customers

  • Existing arrangements do not adequately address risks posed by higher-risk customers, such as lawyers, notaries, accountants, and trust and company service providers.
  • These professionals are not covered by the legal framework.

Weaknesses in Transaction Monitoring and Reporting

  • The country’s regime for preventive measures does not adequately address the obligation to monitor transactions, which impacts on the obligation to report suspicious transactions.
  • Institutions appear unaware of the requirements of the money laundering law regarding record retention policies.

Lack of Training and Supervision in AML/CFT

  • The Bank of Cape Verde (BCV) lacks a systematic and focused program of training in AML supervision for its staff.
  • The auditor general of capital markets (AGMVM) has not clearly defined an AML/CFT supervisory strategy.

Conclusion

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While Cape Verde has made efforts to combat ML and TF, its legal system falls short of international standards. To strengthen its AML/CFT regime, the country needs:

  • Increase transparency and accountability in the financial sector.
  • Improve the regulation of designated non-financial businesses and professions.
  • Enhance international cooperation.

By addressing these gaps, Cape Verde can improve its ability to combat money laundering and terrorism financing, ultimately protecting its financial system and economy.