The latest IMF Governance Diagnostic Report highlights, among other things, progress but also shortcomings in the fight against money laundering and the financing of terrorism in Benin. It illustrates the way to go to overcome the weaknesses of governance in this area.
While prosecutions for economic crimes and terrorism have increased in Benin since the establishment of the Criet, the number of proceedings for the fight against money laundering and the financing of terrorism (Lbc-Ft) remains low compared to the number of underlying offences. According to the Mutual Evaluation Report (Rem) of the Intergovernmental Action Group against Money Laundering in West Africa (Giaba, May 2021), the shortcomings relate, among others, to the lack of risk-based supervision for designated non-financial professions, insufficient use of financial information, ineffective confiscation mechanisms and limited international cooperation.
To correct these shortcomings, Benin adopted an action plan to mobilize the Lbc-Ft toolbox in broader efforts to fight corruption, identified as one of the most significant offenses in terms of generating criminal income. The other main underlying offenses are smuggling, tax evasion, cybercrime, human or drug trafficking.
Rem notes that banks face significant challenges in terms of collecting information on beneficial owners and identifying politically exposed persons (Ppe). Non-banking financial institutions, for their part, are in an even more precarious position with regard to the implementation of controls.
In the February 2023 Governance Diagnostic Technical Report on Benin, the International Monetary Fund (IMF) believes that national authorities should improve cooperation with regional supervisors and explore avenues for joint action to improve evidence-based supervision. the risks. To this end, the National Financial Information Processing Unit (Centif) is called upon to regularly prepare guidelines relating to preventive obligations in order to help reporting entities better apply Lbc-FT controls and improve the reporting of suspicious transactions.
In terms of compliance with Lbc-Ft obligations by Designated Non-Financial Establishments and Professions (DNFBPs), the establishment of ad hoc supervision should help fill the gaps. Decree 2022-350 of June 22, 2022 designates the National Lbc-Ft Activities Coordination Committee (Cnca) as sector supervisor for all DNFBPs, with the exception of the gaming and casino sector and the real estate sector. It is expected that the Cnca will begin its risk-based supervision during the first quarter of 2023.
Real estate
In the real estate sector, vulnerabilities are high due to the weight of informal transactions and the absence of supervision. Measures such as the digitalization of the cadastre and the obligation to use notaries for all real estate transactions are undertaken in order to reduce informality. The new “e-notary” database of the National Domain and Land Agency (Andf) allows notaries to check information on land ownership online during real estate transactions. The information on the owners contained in the database is also accessible to the Centif and to the other competent authorities on request. In addition, the Centif is coordinating a risk assessment in the real estate sector, the results of which may help to improve the understanding of Lbc-Ft risks.
For the IMF, efforts must still be made, despite the progress noted, to strengthen the number and competence of Andf staff in risk-based supervision as of this year. Andf could expand its database to include beneficial ownership information for entities holding real estate in Benin. This database could be extended to beneficial ownership information for entities holding real estate properties, and fully accessible to competent authorities. In the medium term, the Agency must move towards greater publication of data relating to land and real estate ownership (legal owners and beneficial owners), recommends the IMF.
As ministerial officers, notaries should, in any event, play a greater role in combating the risks of money laundering, in particular through better cooperation with Andf and Centif. A first step could be the establishment of a legal basis for the collection of information on the beneficial owners during land transactions involving legal persons and transmission to the Andf for inclusion in its database. . Pending the creation of a complete database, the mobilization of data on beneficial owners obtained through public procurement or the Agency would allow progress in the short term.
In addition, there is talk of improving cooperation between the Economic and Financial Brigade (Bef) and the other criminal prosecution entities: the Court for the Suppression of Economic Offenses and Terrorism (Criet), the High Commission for the Prevention of Corruption (Hcpc), the Specialized Court of Land Affairs, to ensure that systematic procedures in terms of Lbc-Ft are conducted when there is an underlying offense, and also to establish mechanisms for the management seized assets.
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