Sierra Leone Remains Vigilant Amidst Vulnerabilities
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Despite recent improvements in its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, Sierra Leone remains vulnerable to the risks of money laundering and terrorist financing.
FATF Report Highlights Areas for Improvement
According to a recent report by the Financial Action Task Force (FATF), Sierra Leone’s AML/CFT system is moderately effective in some areas, but fundamental improvements are still needed in others. The country’s authorities are aware of these vulnerabilities and are working to address them.
Key Areas for Improvement
- Lack of specific guidelines for international cooperation
- Case management system and dedicated staff
- Strengthening supervision and monitoring of transactions by financial institutions and non-bank financial institutions
Progress Made, but Challenges Remain
Sierra Leone has taken steps to improve its AML/CFT framework since the last evaluation in 2007. The country re-enacted its AML/CFT Act in 2012 and amended it in 2019, and re-enacted its Banking Act in 2019. Regulations have also been issued to reinforce the legislative framework.
However, despite these improvements, Sierra Leone still faces challenges in implementing its AML/CFT system. The country needs to enhance its collection and maintenance of comprehensive statistics on money laundering and terrorist financing to better document its actions and results.
National Risk Assessment (NRA) and Action Plan
Sierra Leone completed its National Risk Assessment (NRA) in 2017, which has improved the level of understanding of money laundering and terrorist financing risks across the board. However, the NRA exercise was limited to Freetown, and some sectors, such as casinos and accountants, were not comprehensively assessed.
The country’s authorities have adopted a two-year Action Plan based on the findings of the NRA, which prioritizes key areas of deficiencies identified in the assessment. Implementation of the plan is ongoing, but inadequate resources among key competent authorities are affecting effective implementation.
Conclusion
Sierra Leone recognizes the importance of addressing these vulnerabilities and is working to strengthen its AML/CFT framework. However, more needs to be done to ensure that Sierra Leone is not exposed to the risks of money laundering and terrorist financing.
Source: Financial Action Task Force (FATF) Report on Sierra Leone’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Framework.