Sao Tome and Principe Enhances Financial Compliance

Sao Tome and Principe Takes Steps to Enhance Financial Compliance

The island nation of Sao Tome and Principe, located in the Gulf of Guinea off the Western equatorial coast of Central Africa, is poised to reap significant economic benefits from its newly discovered oil reserves. However, this influx of wealth also raises concerns about the country’s vulnerability to money laundering and terrorist financing (ML/TF) risks, particularly through the financial system.

A Need for Improvement

As a result, Sao Tome and Principe has been identified by the Financial Action Task Force (FATF) as a jurisdiction with strategic Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies. The country has been subject to public statements from the FATF since 2008, highlighting its need to improve its AML/CFT regime.

Responding to International Pressure

In response to these concerns, Sao Tome and Principe submitted a preliminary application for membership in the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in May 2008. The country was subsequently granted observer status by GIABA, and has since made efforts to implement robust AML/CFT measures in line with international standards.

Enhancing Financial Compliance

Sao Tome and Principe’s commitment to enhancing financial compliance is a positive step towards mitigating the risks associated with its new oil reserves. As the country continues to develop its oil industry, it is essential that it maintains a strong focus on preventing ML/TF activities through its financial system.

Types of Financial Compliance in Sao Tome and Principe

As Sao Tome and Principe works to enhance its AML/CFT regime, the country has implemented various measures aimed at ensuring compliance with international standards. Some of these measures include:

Mutual Evaluation

This process involves a comprehensive assessment of the country’s AML/CFT framework by an independent team of experts.
The mutual evaluation provides an objective assessment of the country’s strengths and weaknesses in its AML/CFT regime.

Follow-Up

The follow-up process ensures that recommendations made during the mutual evaluation are implemented and effective.
This process helps to ensure that the country’s AML/CFT regime is continually improving and meeting international standards.