Financial Crime World

TANZANIA, UNITED REPUBLIC OF: FATF Follow-Up Report Reveals Mixed Performance on Anti-Money Laundering and Combating the Financing of Terrorism Efforts

A recent report by the Financial Action Task Force (FATF) has evaluated Tanzania’s progress in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. While the country has made some progress, it still faces significant challenges.

Progress and Challenges

The FATF Follow-Up Report 2022 highlights several areas where Tanzania has implemented the technical requirements of the FATF Recommendations:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Regulation and supervision of financial institutions (R.26)

However, the report also identifies several areas where Tanzania is non-compliant or partially compliant with the FATF Recommendations:

  • Money laundering offence (R.3)
  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Transparency and beneficial ownership of legal persons (R.24)

Key Challenges

The report highlights several key challenges that Tanzania needs to address:

  • Lack of effective laws and regulations to prevent the use of shell companies and other legal arrangements for money laundering and terrorist financing
  • Limited capabilities and resources of the financial intelligence unit
  • Failure to establish a comprehensive system for reporting suspicious transactions
  • Inadequate measures to prevent the misuse of new technologies, such as cryptocurrencies

Efforts to Strengthen AML/CFT Framework

Despite these challenges, Tanzania has made efforts to strengthen its AML/CFT framework:

  • Establishment of a national anti-money laundering committee
  • Development of guidelines for financial institutions

Call to Action

The FATF has called on Tanzania to address the remaining gaps in its AML/CFT regime and provide more information on its progress in implementing the technical requirements of the FATF Recommendations. The country’s next follow-up report is due in 2025.

Conclusion

While Tanzania has made some progress in implementing AML/CFT measures, it still faces significant challenges in addressing money laundering and terrorist financing. The country must continue to strengthen its AML/CFT regime to protect its financial system and prevent the misuse of its financial institutions by criminals and terrorists.