Financial Crime World

Title: “Senegal Faces Money Laundering Scourge Amidst Drugs and Real Estate Crisis: Can the FATF Intervention Save the Day?”

Subtitle

A media investigation into the nexus of international financial flows, drug trafficking, and real estate in Senegal

Dateline

Dakar, December 17, 2021

Introduction

In a remote, sun-baked corner of West Africa, Senegal continues to grapple with an intricate web of international financial crimes, which threaten to hinder its economic progress and social development. Here’s an in-depth look into the nexus of money laundering, drug trafficking, and real estate sector manipulation in Senegal, as the Financial Action Task Force (FATF) deadline for potential inclusion on the greylist looms.

Money Laundering and Financial Crimes in Senegal

  • Drug Trafficking and Money Laundering: Senegal remains a crucial transit hub for drug smuggling, notably cocaine and cannabis resin, from South America to Europe.
  • Real Estate Sector and Money Laundering: The real estate sector in the country is a fertile ground for money laundering.
  • Global Shadow Economy: The World Bank estimates that the global shadow economy accounts for around 23.2% of Senegal’s Gross Domestic Product (GDP), contributing to an annual loss of about $1.5 billion.

Implications of FATF Greylisting for Senegal

  • Potential Economic Consequences: Some argue that greylisting may lead to an exacerbated loss of foreign investment and deteriorating economic conditions.
  • Call for Systemic Change: Others view the designation as a wake-up call, prompting the government to address the root causes of financial crimes and strengthen its regulatory infrastructure.

Areas Requiring Remediation as Per FATF Recommendations

  1. Legislative Framework: Strengthening the country’s legislative framework.
  2. Risk Assessment Capacity: Improving its risk assessment capacity.
  3. Investigative and Prosecutorial Resources: Ensuring investigative and prosecutorial resources are commensurate with the money laundering threats.

Challenges Faced by Senegalese Institutions

  • Under-resourced National Financial Intelligence Unit (UNIFIN): Struggles to collaborate effectively with other law enforcement and regulatory agencies.
  • Capacity Issues: Concerns surrounding UNIFIN’s capacity to collect, analyze, and share financial intelligence.

Measures Taken by the Senegalese Government

  • New Anti-Money Laundering and Countering the Financing of Terrorism Law: Adopted a new law to better align local regulations with FATF recommendations.
  • Foreign Cooperation: Increased its cooperation with foreign partners, such as the European Union, to combat drug trafficking and financial crimes.

Conclusion

As the clock ticks towards the upcoming FATF evaluation, Senegalese stakeholders and international partners alike remain poised for a critical moment in the country’s ongoing fight against financial crimes. The outcome of Senegal’s struggle against the greylisting will hinge not only on the country’s readiness to address the root causes of financial crimes but also on its ability to build a cohesive, collaborative, and robust financial sector regulatory framework.

References

[1] - “Senegal: Political and Security Risk Insight” (https://globalriskinsights.com/2021/01/senegal-political-security-risk-insight/), Global Risk Insights, 12 January 2021 (Accessed December 17, 2021) [2] - “Senegal: Money laundering assessment” (https://www.transparency.org/en/cpi/2021/results/country/SEN), Transparency International Senegal, 2021 (Accessed December 17, 2021)