Financial Crime World

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Senegal’s Financial Crime Definition: A Growing Concern in West Africa

Senegal’s financial sector has been plagued by money laundering and terrorist financing risks, prompting the Financial Action Task Force (FATF) to place the country on its grey list of countries that do not fully comply with international anti-money laundering standards. The West African nation’s real estate and construction sectors have emerged as major hotspots for illicit financial flows.

Real Estate Sector: A Favorite for Money Laundering

  • Drug trafficking is a significant threat to Senegal’s financial system, generating an estimated $360 million annually.
  • Criminals use various methods to launder their proceeds, including real estate and construction projects.
  • The flexibility of the real estate sector makes it an attractive option for money laundering, as it allows criminals to conceal the origin of their funds and their identities.

Construction Sector: Another Concern

  • Large projects suspected of being financed by illicit funds have raised concerns about the potential for money laundering.
  • The Akon City project, a mega-development launched by American-Senegalese singer Akon, has raised eyebrows due to concerns that it may facilitate money laundering.
  • Senegal’s legal and institutional framework to combat financial crime has been strengthened in recent years, but the country still faces significant challenges.
  • The lack of technical means to train employees from financial businesses, as well as the widespread use of cash and the importance of the informal sector, hinders the state’s ability to effectively respond to financial crimes.

Public Policy: A Role in Nurturing Illicit Financial Flows

  • Experts argue that Senegal’s dependence on foreign currencies, particularly the Euro, has created a vicious cycle that enables illegal financial activities.
  • The country’s public policy may inadvertently nurture illicit financial flows by not addressing these underlying issues.

Countering Money Laundering: A Solution

  • Experts are advocating for greater fiscal independence for Senegal, which would give its banks more flexibility to provide loans to individuals and companies.
  • This could help shift the country’s dependence on ill-gotten gains and create an environment that encourages legitimate business practices.