Financial Crime World

Sao Tome and Principe Falls Short on Financial Crime Regulations

A recent assessment by the Financial Action Task Force (FATF) has revealed that Sao Tome and Principe, a small island nation in West Africa, has not adequately implemented regulations to combat financial crime.

FATF’s Benin Follow-Up Report 2023

According to the report, Sao Tome and Principe received a largely compliant rating for only three of the 40 recommendations made by the international organization. The country was found to be partially compliant with 14 recommendations, while 23 were deemed non-compliant.

Areas Requiring Improvement

The report highlighted several areas where Sao Tome and Principe needs improvement:

  • Prevention of Money Laundering and Terrorist Financing: The country lacks effective measures in place to prevent money laundering and terrorist financing through new technologies, higher-risk countries, and correspondent banking.
  • Transparency and Beneficial Ownership: Sao Tome and Principe is non-compliant with regulations regarding the transparency and beneficial ownership of legal persons and arrangements.
  • Regulation and Supervision: The country’s insufficient regulation and supervision of financial institutions, DNFBPs, and cash couriers, as well as its lack of effective powers of supervisors, law enforcement agencies, and investigative authorities.

Progress Made

On a positive note, the report noted that Sao Tome and Principe has made progress in implementing regulations related to:

  • National Cooperation and Coordination
  • Money Laundering Offense
  • Confiscation and Provisional Measures
  • Terrorist Financing Offense
  • Targeted Financial Sanctions
  • Record Keeping

FATF’s Assessment

The FATF’s assessment is aimed at helping countries strengthen their anti-money laundering and combating the financing of terrorism (AML/CFT) regimes. Sao Tome and Principe has been urged to take immediate action to address the identified shortcomings and improve its overall compliance with international standards.

Note: The Financial Action Task Force (FATF) is an inter-governmental organization that sets standards and promotes effective implementation of measures to combat money laundering, terrorist financing, and other related threats.