Financial Crime World

Title: Sierra Leone’s Progress Against Money Laundering and Terrorism Financing: FATF Evaluation and Recommendations

Date: September 20, 2023

Sierra Leone has undergone rigorous evaluations to bolster its efforts against money laundering and the financing of terrorism and proliferation. Following international scrutiny, financial regulators in the West African nation have shown substantial progress, according to the latest Mutual Evaluation Report by the Financial Action Task Force (FATF).

Improvements and Key Findings

  • Better AML/CFT legal framework: In 2016, Sierra Leone revised its Anti-Money Laundering (AML) Act and established the Financial Intelligence Unit (FIU) to enhance the supervisory regime.
  • Customer due diligence measures: The Sierra Leonean financial sector has made strides in implementing measures such as client identification, verification of identity documents, and risk assessments for transactions.
  • FIU staff training: Regular training for FIU staff ensures they can effectively understand and apply the latest trends in money laundering and terrorist financing.

Areas for Improvement

Despite substantial progress, the FATF evaluation revealed the following shortcomings:

  1. Limited use of automated systems: Existing customer due diligence systems could be improved, allowing for more efficient and comprehensive analysis of clients and transactions.
  2. Inadequate resources for FIU: More resources, including increased budgets, staff, and technology, should be allocated to the FIU to enable it to execute its responsibilities effectively.
  3. Implementation of targeted financial sanctions: Sierra Leone’s ability to implement targeted financial sanctions against entities and individuals involved in money laundering, terrorism financing, and proliferation needs improvement.

International Pressure and Collaborative Efforts

The FATF evaluation follows ongoing criticism from international organizations, including the European Union and the United States, regarding weaknesses in Sierra Leone’s AML/CFT framework. To address these concerns, the country has been collaborating with the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (UEMOA) to improve its regulatory framework.

Sierra Leone’s commitment to combating money laundering, terrorism financing, and proliferation is crucial from both a national and international perspective, as it strives to maintain the reputation of the West African financial sector and secure economic collaboration. With the support of international organizations and regional partners, the country is expected to make significant progress in addressing the weaknesses identified in the FATF evaluation.

  1. Improve automated systems for customer due diligence
  2. Allocate more resources to the Financial Intelligence Unit (FIU)
  3. Enhance the implementation of targeted financial sanctions

By implementing these recommendations, Sierra Leone is well-positioned to strengthen its anti-money laundering and countering the financing of terrorism (AML/CFT) framework, enhancing the West African nation’s reputation and ensuring its cooperation on a global level.