Financial Crime World

Sierra Leone on High Alert as Terrorist Financing Risks Threaten National Security

Freetown, Sierra Leone - The government of Sierra Leone is taking extra precautions to prevent and combat terrorist financing (TF) in the country, following a recent designation by the US Office of Foreign Assets Control (OFAC).

Vulnerabilities Exposed

The designation highlights the vulnerabilities of Sierra Leone’s anti-money laundering and combating the financing of terrorism (AML/CFT) framework, which experts say makes the country more susceptible to TF threats.

AML/CFT Framework Weaknesses

According to a Mutual Evaluation Report released by the Financial Action Task Force (FATF), Sierra Leone has taken steps to improve its AML/CFT regime since 2007. However, the report identifies several deficiencies in the country’s technical compliance framework, including:

  • Weaknesses in confiscation
  • TF investigation and prosecution
  • Supervision and monitoring of non-bank financial institutions

Recommendations for Improvement

The report notes that while Sierra Leone has made progress in understanding ML/TF risks and national coordination, significant improvements are needed to strengthen its AML/CFT system. The country is also urged to:

  • Enhance collection and maintenance of comprehensive ML/TF-related statistics
  • Better document actions taken and results achieved

National Risk Assessment (NRA) Completed

In a bid to address these weaknesses, Sierra Leone completed its NRA in 2017, which has improved the level of understanding of ML/TF risks across the board. The report praises the Financial Intelligence Unit (FIU) for playing a pivotal role in the NRA process and having a good understanding of risk in the country.

Challenges and Action Plan

Despite these efforts, the government is aware that Sierra Leone remains vulnerable to TF threats due to:

  • Inadequate resources amongst key competent authorities
  • Inconsistencies between the objectives and activities of some competent authorities with identified ML/TF risks

To address these challenges, Sierra Leone has adopted a two-year Action Plan based on the findings of the NRA, which prioritizes key areas of deficiencies. The plan is currently being implemented, but its effectiveness is hindered by inadequate resources.

Government Commitment

The government remains vigilant and committed to preventing and combating TF in the country. In a statement, a senior official said:

“We are taking all necessary measures to strengthen our AML/CFT framework and prevent the misuse of our financial system for terrorist financing activities.”

National Security Implications

As the global fight against terrorism continues, Sierra Leone’s efforts to address these vulnerabilities are crucial in maintaining national security and preventing the risk of TF.