Financial Crime World

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Sierra Leone Struggles to Comply with Financial Sanctions Requirements

A recent report by the Financial Action Task Force (FATF) has highlighted Sierra Leone’s difficulties in implementing key requirements for combating money laundering and terrorist financing.

Technical Compliance

The West African country received a largely compliant rating for its technical compliance, but fell short in several areas. The report found that Sierra Leone was non-compliant with regard to the requirement for transparency and beneficial ownership of legal persons and arrangements. Additionally, it struggled to implement measures to regulate and supervise designated non-financial businesses and professions (DNFBPs).

Areas of Improvement

  • Confiscation and provisional measures: partially compliant
  • Targeted financial sanctions related to proliferation and terrorist financing: partially compliant
  • Internal controls and foreign branches and subsidiaries: needs improvement
  • Record keeping and customer due diligence practices: needs improvement
  • Transparency in reporting suspicious transactions: lacks transparency
  • Effective measures to prevent tipping-off and maintain confidentiality: absent

National Cooperation and Coordination Mechanisms

Despite these challenges, Sierra Leone’s national cooperation and coordination mechanisms were found to be largely effective. Good communication between the various authorities responsible for combating money laundering and terrorist financing was noted.

Progress Made

The FATF report also highlighted Sierra Leone’s progress in implementing key anti-money laundering and combating the financing of terrorism (AML/CFT) requirements. The country’s financial intelligence unit is considered effective, and it has established powers for supervisors and law enforcement agencies.

Conclusion

The FATF report provides a detailed assessment of Sierra Leone’s AML/CFT framework, highlighting areas where the country needs to improve its technical compliance with international standards. The findings are expected to inform the government’s efforts to strengthen its financial sanctions regime and prevent the misuse of its financial system.