Money laundering and financing of terrorism: Burkina Faso remains on the FATF “grey list”

• The country has been placed under reinforced surveillance since 2021

• The government engaged in the fight

• A new report on targeted financial sanctions

Ln November 13, 2024, at the end of the Council of Ministers, the Minister of Economy and Finance explained, at the RTB microphone, that the Council had adopted a report relating to targeted financial sanctions as part of the fight against money laundering and terrorist financing in Burkina Faso. A non-trivial outing, where Aboubakar Nacanabo recalled that a lot of efforts had been made to remove the country from the gray list of the Financial Action Task Force (FATF). A gentle way of reminding that despite efforts, Burkina Faso remains on the FATF gray list, the category of countries under enhanced surveillance, in the terms of the FATF.

The information had gone almost unnoticed. On October 25, 2024, the FATF published a press release in which it updated the list of jurisdictions under enhanced surveillance, the famous “gray list”. In this list, new entries: Algeria, Angola, Ivory Coast and Lebanon are now subject to increased surveillance; and an exit. Senegal is no longer subject to increased surveillance by the FATF. Burkina Faso remains in this new updated list. It has been there since 2021.

Countries under reinforced surveillance…

For the Minister of the Economy, the adoption of the new report relating to targeted financial sanctions as part of the fight against money laundering and the financing of terrorism in Burkina Faso will “enable the legal system to be strengthened. In this sense, we will identify the sanctions to be applied in the event of failure to comply with the provisions. Actions that could take the country out of jurisdictions classified in the FATF gray list.

Since February 2021, the country has been placed under reinforced surveillance. An alert which pushed Faso to actively work with the FATF. The Country is politically committed at the highest level to collaborate with the FATF and GIABA to strengthen the effectiveness of its regime in the fight against money laundering and the financing of terrorism (AML/CFT), the country has undertaken actions aimed at improving its AML/CFT regime. This includes strengthening the supervision of financial institutions and designated non-financial businesses and professions, establishing a system for competent authorities to access accurate and up-to-date beneficial ownership information, and implementation of a framework for monitoring the activities of non-profit organizations (NPOs) exposed to the risks of terrorist financing abuse.

The principle for the FATF of putting a country on the gray list consists of supporting the country in upgrading its “strategic failings” in the fight against money laundering and the financing of terrorism. Which means that Burkina Faso, included on the gray list, is committed to quickly closing the legislative and regulatory loopholes identified, within deadlines agreed with the FATF, in concert with the ORTG (FATF-type regional bodies) .
Progress recorded in correcting deficiencies is reported to the FATF over time. And to push them to implement their action plan within the agreed deadlines, the FATF does not go so far as to “apply enhanced vigilance measures” to the countries concerned, but encourages them to take their observations into account within the framework. of their risk analysis.

In June 2023, the FATF published a report summarizing the progress made by Burkina Faso. The country had 12 recommendations rated ‘Non-Compliant’ (NC) or ‘Partially Compliant’ (PC). For this, Burkina remained subject to the reinforced monitoring regime and will have to report in May 2024 to inform GIABA of the progress made in improving the implementation of its measures to combat money laundering and financing of terrorism. The verdict fell in October 2024. The country remains on the FATF gray list. Will the new report adopted by the Council of Ministers make it possible to remedy strategic failures? See you in 2025.

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FATF business card

CCreated in 1989, the Financial Action Task Force (FATF) is an intergovernmental body whose mission is to define international standards and promote the implementation of legislative, regulatory and operational provisions with the aim of combating money laundering. money, terrorist financing and other risks threatening the international financial system. The FATF and the Global Forum

were entrusted by the G20 with the mission of ensuring the convergence of their technical work in terms of effective beneficiaries. The FATF Recommendations, adopted in 2012, are implemented by more than 200 countries through an international network of regional bodies affiliated with the FATF. Structure which, with its regional branches, regularly carries out mutual evaluations to ensure the implementation of its recommendations, some of which relate to transparency and availability of information on the beneficial owners of legal entities and other legal arrangements.

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Some of the FATF recommendationsL

e Burkina Faso should continue its work to implement its action plan to remedy its strategic shortcomings, in particular:

– by updating its understanding of ML/TF risks, including by revising the national risk assessment according to the sectoral priorities identified as part of the national strategy;

– by requesting mutual legal assistance (MLA) and other forms of international cooperation according to its risk profile;

– by strengthening the resource capacities of all AML/CFT supervisory authorities and exercising risk-based supervision of FIs and DNFBPs;

– by maintaining complete and up-to-date information concerning basic information and on beneficial owners and by strengthening the system of sanctions applied in the event of breaches of transparency obligations;

– by increasing the diversity of suspicious transaction reports;

by improving the human resources of the FIU, through new hires, training and an additional budget;

– by providing training for criminal prosecution authorities, prosecutors and other competent authorities;

– by demonstrating that the authorities maintain confiscation as the objective of their policy;

– by strengthening the capacity and support offered to criminal prosecution authorities and prosecuting authorities engaged in the fight against FT, based on the national CFT strategy;

– by implementing an effective regime of targeted financial sanctions linked to FT and FP, as well as risk-based monitoring and control of NPOs.