Financial Crime World

Cameroon’s Grey Listing: A Wake-Up Call for Strengthening AML/CFT Framework

YAOUNDE - The Republic of Cameroon has been under scrutiny in recent years due to its grey listing by the Financial Action Task Force (FATF). To strengthen its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, Cameroon must take concrete steps to address identified vulnerabilities.

Vulnerabilities in AML Obligations

  • 113 of the CEMAC AML Regulation provides that administrative sanctions be taken against banks that disregard their AML obligations. However, despite this provision, no administrative sanction has been pronounced against a bank or bank official for breaches of AML obligations.
  • The Cameroonian Banking Authority (COBAC) has not conducted thematic missions on AML/CFT and its controls are not based on a risk-based approach within the meaning of the FATF Recommendations.

Sanctions and Enforcement

  • There is a low level of implementation of sanctions on reporting entities for non-compliance with their AML/CFT obligations.
  • Financial institutions did not mention any sanctions they had suffered following a failure in their AML/CFT system.

Recommendations for Improvement

Strengthening Sanctions and Enforcement

  • COBAC must embark on an aggressive scrutiny of the AML framework of banks in Cameroon and mete out decisive sanctions to send a clear message.
  • The country’s authorities must set up mechanisms for evaluating the action of regulatory authorities.

Establishment of Institutional Framework

  • Cameroon has not presented a national list based on United Nations Security Council Resolutions 1267 and 1373, also known as sanctioned lists.
  • There is no mechanism for the prompt dissemination of sanctions lists to reporting entities.

Mitigating Risks

  • Cameroonian authorities must set up a mechanism for the immediate creation and dissemination of a local sanctions list to those entitled to receive it.
  • This list can be used by banks to filter details of cross-border transactions to detect, prevent, and report attempted terrorism financing as well as freezing of funds.

Plan d’Action Prioritaire (PAP) 2021-2024

The plan aims to strengthen controls and address identified deficiencies through four action thrusts:

Action Thrusts

  • Strengthening the legal and institutional framework
  • Developing a national coordination framework
  • Stepping up control and supervision systems for prevention actors
  • Improving the efficiency of investigation and prosecution authorities

Concerns about Implementation

Delays in implementing some of these plans have raised concerns about the level of seriousness with which the state of Cameroon is approaching this exercise.

Call to Action

To avoid being listed as a high-risk country by FATF, Cameroon must adopt ethical practices and effectively address its AML/CFT deficiencies. As a certified anti-money laundering specialist, Cletus Azah emphasizes that effective clean-up of identified deficiencies is obligatory for FATF to review positively the status of Cameroon and delist the country from the grey list come 2025.