2024-10-25 16:55:00
The International Financial Action Task Force (FATF), a financial crime watchdog, said this Friday that Senegal had been removed from its list of most scrutinized countries and that Algeria, Angola, Ivory Coast and Lebanon had been added to it.
Senegal has made significant progress in implementing policies against money laundering and “terrorist financing”, the watchdog said in a statement.
Angola was included in the FATF gray list, due to critical failures in implementing effective mechanisms to combat money laundering and terrorist financing.
Inclusion on this list means that Angola will be subject to stricter surveillance, and will have a direct impact on its global financial relations and access to international markets.
This situation is the result of a number of structural deficiencies identified by the FATF, including the inability of Angolan institutions to effectively enforce anti-corruption laws, a lack of coordination between the financial and judicial sectors, and a paucity of convictions in money laundering cases.
Although the government has adopted important legislative reforms, such as new laws to prevent money laundering, the implementation of these standards was considered insufficient.
The reasons why Angola is on the list
Angola faces several gaps in its financial crime prevention policies, which contributed to its entry on the FATF gray list:
1. Weak institutions: The country has failed to provide its institutions with resources and capabilities to investigate and prosecute money laundering crimes. The judicial system and financial oversight agencies lack the resources to effectively implement reforms.
2. Corruption and bad governance: Systemic corruption continues to undermine the country’s anti-corruption efforts. Even with adequate laws, a lack of effective prosecution and conviction leaves Angola vulnerable to the flow of illicit money.
3. Inadequacy of financial controls: The financial sector has failed to implement adequate controls on suspicious transactions, and banking supervisory authorities have failed to effectively monitor financial activities, which contributes to the risk environment.
Consequences for the Financial Market and the Company
Angola’s entry into the gray list will have immediate and long-term consequences for the country’s economy and social welfare:
1. Losing Access to Foreign Exchange and Credit: The country would have difficulties accessing international currency, which would limit its ability to import essential products and increase the costs of financial transactions. International banks may cut ties with Angolan institutions, further damaging the financial sector.
2. Reduction in Foreign Investments: The “high risk” status associated with the gray list will increase the cost of raising funds abroad and may drive away investors seeking stable markets. This would generate a reduction in foreign direct investment, which is vital to Angola’s economic diversification.
3. Deterioration of Social Conditions: The impact on the economic sector would inevitably affect society as a whole, making it more difficult for the government to fund necessary social programs. Some of the more immediate social consequences would be a slowing economy and worsening poverty.
It is worth noting that the IMF warned this morning about the need for oil producing countries, including Angola, to launch economic reforms to boost economic growth. According to the IMF, Angola’s growth rate in 2024 will be 2.4% below the 3.6% average for Sub-Saharan Africa.
What can the Government do
To overcome the current situation, Angola should invest more in the implementation of the reforms recommended by the FATF.
This includes:
• Institutional strengthening: Ensure that financial and judicial authorities have the necessary resources and independence to effectively investigate and prosecute cases of money laundering and terrorist financing.
• Effective enforcement of anti-corruption laws: The government should prioritize creating a culture of integrity and accountability, removing barriers that enable systemic corruption.
• Transparency and International Cooperation: By increasing transparency in financial activities and by cooperating more closely with international authorities, Angola’s position could be strengthened in terms of complying with the FATF guidelines.
Future Challenges
Due to the inclusion of Angola on the gray list, the country will have a long period of vigilance and efforts to implement the necessary reforms, which could take up to three years to resolve. During this period, the government will need to act quickly to strengthen its institutions, strictly enforce laws and demonstrate to the international community that it is committed to fighting financial crime effectively.
The inclusion of Angola on the gray list highlights the importance of strong and sustainable policies to guarantee economic stability and the integrity of the country’s financial market, which will have a direct impact on the lives of the population.
By: Henda Go
For the Angola Portal
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