Financial Crime World

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Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Efforts in Senegal

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Based on the 2019 Mutual Evaluation Report by the International Cooperation Review Group, this article provides a summary of the key points regarding AML/CFT efforts in Senegal.

Cooperation with Foreign Counterparts

The Financial Intelligence Unit (FIU) of Senegal has made significant strides in cooperating with its foreign counterparts. This cooperation is facilitated through bilateral agreements and membership in the Egmont Group.

  • The FIU maintains a robust network of international relationships, enabling it to share information and best practices with other countries.
  • Bilateral agreements have been signed with several countries to enhance collaboration and information exchange on AML/CFT matters.
  • Membership in the Egmont Group provides Senegal with access to a platform for sharing intelligence and coordinating efforts with other member countries.

Banking Sector Cooperation

The banking sector in Senegal has also made progress in cooperating with regulatory bodies. The UMOA Banking Commission and certain banking supervisory authorities have signed memoranda of understanding on cooperation and exchange of supervisory intelligence on cross-border transactions.

  • These agreements enable the sharing of information and best practices between banks and regulatory bodies, enhancing the overall AML/CFT framework.
  • The exchange of supervisory intelligence helps to identify potential risks and prevent illicit activities.

Risks and General Situation

While Senegal has made progress in identifying ML/TF risks, there are still areas for improvement. The approach adopted in assessing sectoral risk is limited, and the authorities have not sufficiently considered the risk of local fund-raising actions that may be used to finance terrorist activities.

  • The lack of a comprehensive risk assessment framework hinders the effective identification and mitigation of ML/TF risks.
  • Insufficient consideration of local fund-raising actions increases the vulnerability of Senegal’s financial system to terrorism financing.

Overall Level of Effectiveness and Technical Compliance

Senegal has made some progress since the 2007 Mutual Evaluation, with legislative and regulatory reforms. However, major deficiencies have been noted due to non-domestication of Directive No. 02/2015/CM/UEMOA and non-compliance of AML/CFT legislations with new FATF Recommendations.

  • The adoption of the Counter Financing of Terrorism Law is a positive step towards strengthening the AML/CFT framework.
  • However, the failure to domesticate Directive No. 02/2015/CM/UEMOA and comply with new FATF Recommendations hinders the effectiveness of Senegal’s AML/CFT efforts.

Risk Assessment, Coordination, and Policy Definition

Senegal has completed its National Risk Assessment (NRA) in August 2017. The NRA process was coordinated by the CNC-LML/FT, inclusive, and broadly reasonable. However, the level of understanding of ML/TF risks varies from one sector to another.

  • The completion of the NRA is a significant step towards understanding ML/TF risks.
  • However, the variation in risk understanding across sectors highlights the need for further education and training.

Overall, while Senegal has made progress in AML/CFT efforts, there are still areas for improvement, particularly in the prevention and supervision of all reporting entities, including DNFBPs.