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Assessment Report Summaries

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botswana-small

BotswanaAML tab topic page

 
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Botswana has set up the key fundamental components of an AML regime, through various legislative and regulatory instruments, though there are some inconsistencies between these instruments. Notwithstanding the fact that several of these components fall short of meeting the international standards, the key challenge for Botswana is to implement effectively its current regime. The legal and regulatory instruments encompass in particular criminalization of ML, confiscation of proceeds of crime, preventive measures, and suspicious transaction reporting. However, the AML preventive regime does not cover some of the financial activities set out by FATF, nor any of the Designated Non-Financial Businesses and Professions. Transparency issues relating to legal entities, legal arrangements and non-profit organizations are also of concern.

 

Botswana has ratified the United Nations Convention on the Suppression of the Financing of Terrorism but has not criminalized the financing of terrorism. As such, it lacks a legal framework allowing it to effectively fight against terrorist financing. Botswana should expedite the criminalization of terrorism financing and set up an appropriate legal framework to enable it to comply with its international obligations in respect of terrorist financing. The country also suffers from some restrictions to Mutual Legal Assistance and administrative forms of international cooperation. 

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BF-SmallBurkina Faso
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In Burkina Faso, the implementation of the AML preventive measures by financial institutions remains highly embryonic. The due diligence requirements instituted by Act No. 026-2006 are incomplete and vague. Regarding the obligations to report suspicious transactions to the CENTIF, only banks were aware of their responsibility in this area. Responsibility for supervision of compliance with the AML standards within banks lies with the regional bodies. On-site controls were carried out, but were not detailed enough and must therefore be enhanced; regarding on-site and off-site oversight in other financial sectors (insurance, financial markets, micro-finance), they are still inadequate. Moreover, the application of the AML standards by non-financial professions (lawyers, notaries) is non-existent. Burkina Faso criminalized money laundering by passing Act No. 026-2006/AN of 28 November 2006 (AML Act). However, the country has no Act for combating the financing of terrorism. Besides, the system of freezing, seizure and confiscation for money laundering offences has not been enforced. No money laundering case has resulted in legal proceedings in Burkina Faso.
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cambodia-smallCambodia
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Cambodia faces the legacy of more than two decades of internal conflicts which started in the 1970s and not only depleted the country's reserves of human talent, but also disrupted the continuity of social institutions and formal and informal rules. The legal and judicial systems are still marred by structural shortcomings despite efforts of public authorities undertaken since the second half of the 1990s. Revised civil and criminal laws are expected to be enacted before the end of 2007. Draft laws on counter terrorism and anti-corruption are actively being prepared. Corruption is widely perceived as widespread. Since the 1990s, the country has moved toward a market-based economy and restrictions to foreign exchange transactions have been lifted.

 

A very high degree of informality characterizes the Cambodian economy which often makes it difficult to know on whose behalf activities and transactions are undertaken. US dollar banknotes are the most common means of payment, even for large amount transactions. Worth noting is the existence of informal financial service providers whose activities are difficult to gauge and the lack of a comprehensive framework for real estate transactions. Real estate prices in large cities are booming and can reach hundreds of thousands of US dollars for houses which are commonly settled in cash directly from the seller to the buyer. 

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AML tab topic pageCEMAC
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The CEMAC regulation adopted in 2003 to set up a regional legal framework on Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) constitutes a robust legal basis. The implementing regulation issued by the COBAC for the banking sector is a significant step forward, but the framework still needs further amendments to be in line with the standards and remains largely ignored outside of the banking sector. The predominance of cash-based transactions in the region makes it all the more essential to foster the implementation of AML-CFT obligations outside of the financial sector. More emphasis needs to be placed on the benefits of an effective AML-CFT framework, in terms of good governance, the fight against corruption and the trafficking of natural resources, so as to foster actions at the national level.
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Egypt-smallEgypt
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The Government of Egypt has taken significant steps to set up an AML/CFT regime, compared to 2002, when none existed. The AML/CFT Law criminalizes money laundering in Egypt, the material elements are broadly in line with the Palermo and Vienna Conventions, but participation in some forms of organized crime and adult human trafficking are not criminalized. Terrorism financing is criminalized in the Penal code, but its provisions capture neither the financing of an individual terrorist, nor the collection of funds with the unlawful intention that they should be used or in the knowledge that they are to be used to carry out a terrorist act or acts.

The Egyptian system is structured to ensure that legal entities are not used for unlawful purposes and legal provisions on the establishment, registration and monitoring of non-governmental organizations are strictly enforced. Egypt’s domestic cooperation and coordination has been fairly robust and Egypt has a strong legislative framework for the provision of mutual legal assistance and extradition.

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fiji-smallFiji
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Fiji has committed substantial resources to bringing its AML/CFT system up to international standards. With the entry into force of the Financial Transactions Reporting
Act (FTR Act) in January 2006, Fiji introduced a core element in the development of strong AML/CFT legislative framework. The FTR Act closely reflects the international standard in creating a range of AML/CFT preventive regulatory requirements and extending them to a wide range of financial institutions and non-financial businesses and professions. The Act is recent and implementation is still at an early stage. Fiji has had a functioning FIU since 2003. With some operational challenges, the FIU has a track record of receipt, analysis and dissemination of STRs.The criminalization of money laundering is in line with international standards.

Fiji also enjoys a progressive and comprehensive legislative framework for preserving and recovering the proceeds of crime. The law criminalizes a range of terrorist financing (TF) acts though it falls short of international requirements in some technical respects.
While no TF acts have been detected, enforcing the TF provisions is operationally contingent on the passage of a comprehensive anti-terrorism law, which is still at an early drafting stage. The legislative framework for international cooperation is exemplary. This reflects a general commitment to international cooperation across competent agencies.

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Haiti Haiti
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In 2001, Haiti enacted an AML Law encompassing the fundamental elements of the fight against money laundering, but has not yet adopted a legal framework to counter the financing of terrorism. The AML framework sets out a money laundering offence, seizure and confiscation mechanisms, prevention and detection requirements and the basis for international cooperation (limited to mutual legal assistance and the Financial Intelligence Unit). It presents however several significant weaknesses with regard to the international standard (dealing inter alia with the scope of the predicate offences, the coverage of designated non financial businesses and professions, the transparency of legal entities and of non-profit organizations, the restrictions to the lifting of banking secrecy).

The implementation of the existing regime is insufficient, ineffective and weakly coordinated, and is not up to the money laundering and terrorism financing risks facing the country. The key institutions necessary to the well-functioning of the legislative framework are in place, but have not yet sufficiently used the tools provided for by the 2001 AML Law. No money laundering prosecution has been completed thus far; the number of suspicious transactions reports, which were filed only by the banking sector, remains very small; the compliance by the financial sector with its AML obligations is not properly supervised.

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Honduras-smallHonduras
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Honduras has set up a number of the fundamental components of an AML regime, through various legislative and regulatory instruments and an institutional framework which includes law enforcement, prosecution, and supervisory bodies. While progress has been made, key changes are needed to laws and regulations in order for Honduras to have a more effective ML and TF regime.

There is a lack of strategic direction and coordination among the participants. A focal point and coordination body needs to be established, involving senior representatives of all the entities involved in anti-money laundering and counter-terrorist financing to ensure the most effective and efficient collaboration of the initiative, and to ensure that necessary policy, regulatory and legislative measures can be expeditiously developed, approved and implemented and that initiative wide statistics on workload, performance and results are collected and shared. All entities need more resources to effectively play their role in the ML regime.

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madagascar-smallMadagascar
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The financial system in Madagascar is dominated by commercial banks (Figure 1 and Table 1). All seven registered commercial banks are foreign-owned,1 with three subsidiaries of large French banks (Crédit Lyonnais, Société Générale, and BNP-Paribas) accounting for around 65 percent of banking sector assets. Nonbank financial institutions (NBFIs) account for around 16 percent of financial system assets, and include insurance companies, pension funds, and several other institutions that are involved in microfinance. NBFIs are small and do not pose systemic risks. Access to financial services is still very limited, with only 35 percent of low-income households having access to depository services and 2 percent to credit.
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MalawiMalawi
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The government of Malawi has demonstrated a high level of commitment to establishing a strong AML/CFT framework. This commitment is reflected by the enactment of the Money Laundering Proceeds of Serious Crime and Terrorist Financing Act in August 2006 (ML & TF Act) and the beginnings of an implementation program. This Act addresses key fundamental requirements by imposing AML/CFT obligations on all financial institutions and designated non-financial businesses and professions covered by international standards, except for life insurance companies. DNFBPs are included within the definition of financial institution under the ML & TF Act.

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Mauritania
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A mission from the World Bank (Financial Market Integrity) visited Nouakchott from May 14 to 21, 2005 for purposes of applying a precise methodology for assessing the degree to which the Islamic Republic of Mauritania is in compliance with international standards applicable in the area of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). This mission was carried out in conjunction with the Financial Sector Assessment Program (FSAP) conducted jointly by the World Bank and International Monetary Fund in February 2005.

 

The national legal system has undergone multiple reforms aimed at creating an environment conducive to business growth. This explains why indebtedness law, commercial law, civil procedure, investment law, etc., have been completely rewritten over the past decade or so. However, the regulatory provisions required to implement these laws have not all been adopted, financing has not been lined up for the institutions established, the new laws have neither been disseminated nor been the subject of outreach efforts, and magistrates have been trained only belatedly.

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namibia-smallNamibia
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The Prevention of Organized Crime Act, which criminalizes money laundering, was passed in parliament in December 2004, but has not been put into effect by the Ministry of Justice. The Financial Intelligence Bill that will establish the Financial Intelligence Unit was tabled in parliament in February 2006. Given the absence of an AML/CFT framework, the Bank of Namibia (BoN) has exercised its powers under the Banking Institutions Act (BIA) to issue general anti-money laundering related determinations and circulars to address aspects of money laundering, but with limited success.


Nevertheless, they fall short of compliance with the international standards and are not sufficient to
ensure industry compliance. Meanwhile, all South African owned banks and larger insurance companies have adopted home office AML/CFT policies to some degree.

With respect to combating the financing of terrorism (FT), Namibia has neither criminalized FT nor provided for the legislative, regulatory framework and institutional mechanism for the freezing, seizing and confiscation of terrorism related funds pursuant to the UN Security Council Resolutions 1267 and 1373. 

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Niger-smallNiger 
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The formal financial sector is small in Niger, and dominated by the banks, while the microfinance sector is growing. The informal sector in Niger accounts for a substantial proportion of economic activity in the country, a characteristic it has in common with other West African Economic and Monetary Union member states. The criminal environment is characterized by drugs and arms trafficking, armed robbery, and trafficking in human beings. Corruption, particularly misappropriation of public funds, is recognized as a problem.

Niger is ranked 115th (out of 180) in Transparency International’s 2008 perception of corruption index. Since February 2007, the social situation has deteriorated in the northern desert region of the country, which has been affected by a violent revolt of Tuareg rebels, who feel marginalized and wish to benefit from the uranium mining wealth in the region (which has two of the largest uranium reserves in the world). The government twice declared the north of the country a military zone, in August 2007 and February 2008. The conflict jeopardizes the economy of the region since it acts as a brake on tourism (the tourist season extends from October to March), the main source of income for most households, which depend on arts and crafts.
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Pakistan-smallPakistan
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Pakistan has criminalized money laundering (ML) and terrorism financing (TF). Law enforcement authorities still find it difficult to gather evidence for the ML offence without conviction for the predicate offence. Some key predicate offences are missing. A wide range of terrorism financing acts is criminalized. There is no criminalization of the financing of individual terrorists or terrorist organizations, other than proscribed ones. Pakistan can freeze terrorist assets under UNSCR 1267. To implement UNSCR 1373, Pakistan uses a domestic proscription mechanism under the Anti-Terrorism Act 1997 (ATA). Associated freezing mechanisms do not extend to all types of asset. Domestic proscription is limited to certain types of organizations. Law enforcement and prosecution authorities have powers to prosecute ML and TF. They are currently not using these tools.
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Philippines-smallPhilippines
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The Government of the Philippines has taken some significant steps to address the AML/CFT concerns highlighted in the earlier assessment conducted in 2003. These reforms were no doubt challenging in terms of demands on resources and given the composite range of issues faced by authorities. It should be recognized that the Philippines continues to be an active participant in global AML/CFT efforts, a valid contributor to APG initiatives, and an active member of the Egmont
Group. Key components of an AML/CFT regime are in place, and the amount of progress achieved so far surely deserves to be duly noted. However, several issues remain to be tackled to achieve proper compliance with legal standards, and true effectiveness in implementation.
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rwanda-smallRwanda
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Rwanda's economy has made considerable progress in overcoming the devastating consequences of the 1994 genocide, but economic performance is vulnerable to shocks, in particular a sharp fall in aid flows. The domestic financial sector still faces a poor environment with economic activity concentrated in a few sectors and a weak credit culture. There are serious shortcomings in the accounting and auditing systems and the institutional, legal, and judicial frameworks. The program of recapitalization and privatization started after 1994 has strengthened the short-term resilience of banks but structural weaknesses remain. Banks would have difficulties coping with the second order effects from a prolonged decline in aid flows and are heavily exposed to a few large borrowers. The domestic financial system remains shallow, especially outside the banking sector, and access to credit remains limited apart from a network of savings and loans cooperatives.

 

The National Bank of Rwanda (NBR) has restored all of its basic functions, but faces formidable challenges. As the main regulator and supervisor of the financial sector, NBR's key challenge has to do with the weak environment for effective supervision, instances of regulatory forbearance, and a shortage of human capital that has been compounded by weak internal governance in some financial institutions. Most notably, there is a need to: (i) enhance further NBR's autonomy and supervisory powers; (ii) upgrade the accounting, auditing and payment systems, and the legal framework; (iii) deepen the money and foreign exchange markets; and (iv) develop an AML/CFT framework beginning with the enactment of a comprehensive AML/CFT law.

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sierraleone-smallSierra Leone 
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In spite of Sierra Leone having recently emerged from a civil war, the government has taken several important steps in an attempt to address the threat of ML and FT. These efforts included the promulgation in 2002 of regulations pursuant to the Banking Act (BA) and Other Financial Services Act (OFSA) introducing AML/CFT preventive measures for the financial sector and the enactment in July 2005 of the AntiMoney Laundering Act (AML Act). The AML Act extends preventative measures to designated nonfinancial businesses and professions, and creates the basic framework for Sierra Leone's AML regime. A core feature is the criminalization of ML which is broadly in line with international standards. In respect of the measures to combat FT, Sierra Leone ratified the United Nations International Convention for the Suppression of the Financing of Terrorism (SFT Convention) in September 2003.

 

Despite these efforts, Sierra Leone's AML/CFT regime remains ineffective. The areas of concern include: i) no implementation of the key points of the AML Act, particularly the creation of the FIU? ii) very limited effective supervision by the Bank of Sierra Leone (BSL) of AML/CFT preventive measures for the financial sector? iii) a number of irregularities in the AML Act which have significant consequences for the application of the act? iv) the failure to introduce the provisions of the SFT Convention in domestic law? and v) an absence of a legislative, regulatory or institutional mechanism for the implementation of all the provisions of UNSCR 1267 and 1373. The assessment team believes that addressing these concerns would not require considerable resources, and would significantly advance the country's AML/CFT regime in the short term. 

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Solomon Islands-smallSolomon Islands 
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The Solomon Islands criminalizes money laundering and terrorism financing in a manner closely consistent with the international standards. There has been one successful conviction for money laundering and no incidents of terrorism financing. Lack of financial investigation skills limit the ability of competent authorities to investigate money laundering and trace the proceeds. Law enforcement authorities favor the enforcement of conventional penal code offences at the expense of other more proceed-generating offences such as illegal logging, fishing and mining. Law enforcement authorities have extensive powers to confiscate proceeds and terrorist property and to provide mutual legal assistance. The informal cooperation channels both domestic and international are very well-developed and well-utilized.

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Sudan - smallSudan
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Sudan’s geography and level of development result in long unprotected borders, which could be exploited by criminals. The authorities characterize recent terrorism as domestic, infrequent, of small scale, and typically occurring as a result of conflict amongst different sects. The ease of use of banks for domestic and international money remittances by non-bank clients, with little oversight, pose risks of both terrorist financing and money laundering. In recent years Sudan has shown an increased willingness to join the international effort in combating money laundering and terrorist financing. Nevertheless, it needs to develop a clearer overall strategy, and address the capacity constraints that limit its progress. The authorities involved seem to have emphasized making the Administrative Committee operational, setting up a preventive regulatory framework, and clarifying the relationships between the various relevant authorities involved.
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TajikistanTajikistan
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Tajikistan does not have any AML/CFT regime in place, nor does it have a strategy to prevent, detect, disrupt dismantle money laundering or the financing of terrorism activities, or to investigate, prosecute and confiscate the proceeds of these crimes. Tajikistan does have some of the basic tools necessary to fight money laundering.

Government authorities acknowledged that their law needs to be updated to meet international standards. Tajik authorities regularly investigate terrorists and terrorist organizations of domestic interest. While Tajik authorities are sensitive to terrorist financing issues and have analyzed how the terrorists are using funds, there have been no terrorist financing criminal investigations.
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thailand-smallThailand
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Thailand has introduced a number of measures in recent years to strengthen its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, particularly for CFT. The regime has resulted in a very large number of suspicious transaction reports (STRs), a large amount of assets being seized and contributed to the Thai government's objective of tackling drug crime. These achievements occurred despite outmoded legislation and other shortcomings identified in this assessment against the Financial Action Task Force (FATF) 40+ 9 Recommendations.

 

Thailand is susceptible to money laundering (ML) and terrorist financing (TF) because illicit proceeds are generated from drug trafficking, illegal gambling, theft, prostitution, human trafficking, illegal logging, corruption and from crime in bordering countries and because of a terrorist problem in its southern region. The illegal economy in Thailand has been estimated up to 13 percent of gross domestic product (GDP) and with ML predicate offenses estimated to generate illicit proceeds of up to 5 percent of GDP. In addition, the widespread use of cash and a large informal sector, estimated at up to 53 percent of GDP, provide many avenues for illicit proceeds to be laundered in Thailand. 

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tunisia-smallTunisia
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This report provides a summary of the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) measures in place in Tunisia as the time of the on-site visit or immediately thereafter. The report describes and analyses those measures and provides
recommendations on how certain aspects of the system could be strengthened. It also sets out Tunisia’s levels of compliance with the FATF Recommendations based on the AML/CFT methodology 2004.

The Tunisian authorities consider the risk of money laundering to be low in Tunisia and feel that
exchange controls constitute a decisive factor of risk reduction. They deem the level of criminality low overall, most especially with respect to organized crime, particularly since income inequalities among the general population are small.
 

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UgandaUganda
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There have been some efforts, especially by the Ministry of Finance and the Bank of Uganda to facilitate putting in place an AML/CFT regime, although much more work is required to meet international standards. Uganda has been, and still is, the victim of domestic terrorism. As a result of Uganda's geographic position, it is also susceptible to being used as a transit point for funds and resources that may be used to destabilize central African countries and to perpetuate war in these areas. Arms trafficking involving Somalia, southern Sudan and eastern Democratic Republic of Congo (DRC) is prevalent. Human trafficking (including children) and smuggling (including protected species) are significant components of the cross-border criminal activity, which sometimes use Uganda as a transit stage. Drug trafficking is also emerging as a major problem.
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Report Summaries 1

spacerBotswana 

Burkina Faso 
Cambodia
CEMAC 
Egypt 
Fiji 
Haiti 
Honduras 
Madagascar
Malawi
Mauritania
Namibia
Niger 
Pakistan 
Philippines 
Rwanda
Sierra Leone
Solomon Islands 
Sudan 
Tajikistan 
Thailand 
Tunisia 
Uganda 




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