Financial Crime World

Seychelles’ Battle Against Financial Crimes: A New Government’s Tackle on Drugs, Corruption, and Virtual Currencies

The beautiful Seychelles Islands are renowned for their tranquil waters and pristine beaches, attracting tourists as a paradise on earth. However, beneath the serene facade, the country faces significant challenges from financial crimes that have long plagued its society. The latest 25-page Financial Crime Assessment and 2-page Financial Crime Dashboard provide insights into the evolving threat and the government’s initiatives.

Pervasive Financial Crimes

For years, Seychelles has been confronting two pervasive financial crimes: drugs and corruption. The previous long-standing government led to cronyism, resulting in a societal transformation that made the Seychelles one of the most heroin-addicted nations globally. Furthermore, the affluent residents are increasingly targeted by fraud and scams, while foreign migrant labor faces risks associated with Money Service and Human Trafficking (MS/HT). Poverty, alcohol, and drugs have perpetuated a vicious cycle of crime within the local population.

A New Government’s Hope

The newly elected government, which has made fighting drugs and corruption a priority in its manifesto for change, offers some hope. The international community keenly watches the government’s efforts to remove Seychelles from the EU’s tax haven listing and FATF (Financial Action Task Force) listing.

Strides Against Financial Crimes

The government is taking significant steps to tackle financial crimes:

  1. Establishing a central Bank of Mauritius database
  2. Completing risk assessments to address open FATF Non-Compliant and Other High-Risk Jurisdiction (NC) ratings on NPOs and New Technologies (Virtual Currencies)
  3. Addressing loopholes, treating addiction to drugs, and prosecuting high-profile corrupt and money laundering cases from the previous regime

The Seychelles’ progress in addressing drugs and corruption on a broader scale will significantly shape its future, influencing its reputation and financial and professional services sector.

Evolving Threats

Minimal money laundering convictions and asset recoveries in Seychelles do not diminish the evolving threat of virtual currencies, highlighted by recent virtual currency wallet asset freezes not only in the Seychelles but worldwide.

National Risk Assessments

The 2017 National Risk Assessment identified Banks and Money Service Businesses as the most vulnerable sectors. The updated National Risk Assessment, expected later this year or in 2023, aims to include Fraud and Cybercrime, MS/HT, Environmental Crime, and possibly the Virtual Currency sector.

In conclusion, the Seychelles faces a complex web of financial crimes. While progress against drugs and corruption is being made, continued adaptations to emerging threats, such as virtual currencies, are essential for safeguarding its reputation and financial services sector. For the 2-page Financial Crime Dashboard, visit Seychelles FC Dashboard.