Financial Crime World

Financial Crimes Thrive in the Shadows of São Tomé and Príncipe’s Beachfront Paradise

San Paulo, Brazil - São Tomé and Príncipe, the tropical island nation in the Gulf of Guinea, is renowned for its pristine beaches, lush rainforests, and rich marine life. However, the OCI (Organized Crime Index) report published by the Global Initiative Against Transnational Organized Crime (GI-TOC) reveals that financial crimes are thriving beneath the country’s picturesque facade.

São Tomé and Príncipe’s Financial Crime Index

  • São Tomé and Príncipe’s financial crime score increased in 2023 compared to the previous year, placing it in the ‘High’ risk category, with a total score of 46.5 out of 100.
  • Despite having legal frameworks to tackle financial crimes, their implementation often falls short.

Major Concerns

  • Money laundering, corruption, and tax evasion are major concerns for São Tomé and Príncipe.
  • The financial sector requires substantial improvements in risk identification, reporting, customer due diligence, and regulatory compliance.
  • The small island nation’s geographical and economic isolation and weak institutional capacity create an environment that promotes financial crimes.

The Informal Sector and Illicit Proceeds

  • The informal sector, largely driven by cash transactions, provides an avenue for illicit proceeds to be laundered.

International Cooperation and Capacity Building

  • The report calls for increased international cooperation, capacity building, and resource allocation to support São Tomé and Príncipe in its efforts to strengthen its financial crime prevention mechanisms.
  • The government is urged to prioritize risk-based supervision, AML (Anti-Money Laundering) and CFT (Combatting the Financing of Terrorism) frameworks, and financial transparency.

Regional Cooperation

  • The OCI encourages regional cooperation, particularly among island nations, to tackle common challenges such as financial crimes, corruption, and tax evasion.

São Tomé and Príncipe’s Efforts

  • The Financial Intelligence Unit (FIU) of São Tomé and Príncipe has confirmed that it is making progress in strengthening the regulatory framework for AML and CFT.
  • Collaboration with international partners like Portugal and the European Union is crucial for enhancing the FIU’s capacity to combat financial crimes.

Implications and Guidance

  • São Tomé and Príncipe’s vulnerabilities to financial crimes serve as a reminder that no place is immune from the reach of organized crime.
  • The OCI provides crucial data to guide policymakers, civil society organizations, and international partners in their efforts to counteract illicit activities.