Financial Crime World

Seychelles’ Paradise under Threat: Unmasking Financial Crimes in the Island Nation

The Seychelles, known for its crystal-clear waters and white sand beaches, is a popular tourist destination. However, beneath its picturesque surface, the island nation faces a different kind of challenge - financial crimes. In this article, we’ll delve into the evolving threats the Seychelles encounter and the measures being taken to combat them.

Historic Challenges: Drugs, Corruption, and Cronyism

The Seychelles has struggled with issues such as drugs and corruption for decades. The country became one of the most heroin-addicted places in the world, and the previous ruling party’s cronyism led to rampant corruption.

  • Drugs and Corruption
    • The Seychelles has grappled with drug addiction for decades.
    • Corruption was rampant under the previous ruling party, leading to cronyism.

New Threats: Fraud, Scams, MS/HT, and Environmental Crime

While many tourists come to the Seychelles for its natural beauty, the affluent are not immune to threats such as fraud and scams. Foreign migrant laborers are also at risk of Modern Slavery and Human Trafficking (MS/HT).

  • Fraud and Scams
  • MS/HT
    • Foreign migrant laborers are at risk of MS/HT.

Poverty and its related issues, including alcohol and drug use, contribute significantly to local crime.

The New Government’s Response

The new Seychellois government, which prioritized fighting drugs and corruption in its change manifesto, offers hope. Escaping an FATF (Financial Action Task Force) listing and removal from the EU Tax Haven listing are critical international objectives.

Measures Being Taken

  • Central Bank Database

    • Establishing a central Bank of Mauritius database

  • Risk Assessments

    • Completing risk assessments before tackling open FATF NC ratings

Addressing the Root Causes

Closing loopholes is essential, but addressing the root causes of financial crimes is just as crucial. New measures include:

  • Addiction Treatment

    • Providing addiction treatment

  • Law Enforcement and Prosecution

    • Pursuing law enforcement and prosecution efforts against former high-profile regime members

The Evolution of Financial Crime

The Seychelles has minimal money laundering convictions and asset recoveries, but virtual currency wallet asset freezes serve as an indication of how financial crime and money laundering might be evolving - not just in the Seychelles.

National Risk Assessments

The 2017 National Risk Assessment (NRA) identified Banks and Money Service Businesses and DNFPBs, including Real Estate and Car Dealers, as the most vulnerable sectors to financial crimes.

  • 2017 NRA
    • Banks and Money Service Businesses identified as the most vulnerable sectors
    • DNFPBs, including Real Estate and Car Dealers, at risk of corruption threats

The updated NRA, expected later this year or next, is likely to include Fraud and Cybercrime, MS/HT, and Environmental Crime. However, the NPO sector will not be designated as a high-risk sector.

For more information on the Seychelles’ Financial Crime Dashboard, please visit: Seychelles FC Dashboard