Demand-Based Technical Assistance by the EU Funded AML-CFT ESCAY Project

As reported in our last newsletter, the AML-CFT ESCAY Project has over the last three months provided limited technical assistance (TA) to five countries, namely the Democratic Republic of the Congo, Kenya, Madagascar, Mozambique, and South Sudan. Our criteria in selecting these countries was guided by whether a country was currently under the Financial Action Task Force (FATF) International Cooperation Review Group (ICRG) process; or whether a country was highly likely to fall to the ICRG process; or whether a country lacked the basic capacity to operationalise its Financial Intelligence Unit (FIU) to receive, analyse and disseminate reports and finally, whether a country had submitted an official request for assistance in good time after the launching of the Project in January 2023.

Here’s a summary of the actions undertaken by the Project in the five selected countries:

THE DEMOCRATIC REPUBLIC OF THE CONGO (DRC)

The DRC is currently under FATF/ICRG review (commonly known as “grey list”) for its deficiencies in its anti-money laundering (AML), counter financing of terrorism (CFT) and counter proliferation financing (CPF) identified during its mutual evaluation.

The D R Congo, in collaboration with its partners, established a working group to coordinate technical support in all the Immediate Outcomes where the country scored low during its mutual evaluation.
Consequently, this coordinating committee requested the AML-CFT ESCAY Project to support the reinforcement of D R Congo stakeholders’ capacity in Immediate Outcome 7, 8 and 9. Requests included designing training modules and organizing a series of trainings that improve technical
capacities of the different institutions mandated with investigation, prosecution and conviction of ML/TF offenses as well as in asset recovery and confiscation.

In response, the Project organised two inter-related and mutually reinforcing training courses on financial investigation, and asset recovery and confiscation with two rounds of training programmes for each course. The objective of the training was to strengthen the DRC’s AML/CFT/CPF system and contribute to the technical and effectiveness compliance on the areas of ML/TF investigation and prosecution, as well as asset recovery and the corresponding Recommendations. At the end of this technical assistance, the DRC will have more trained personnel who are capable of investigating and prosecuting ML/TF and recovering assets acquired from proceeds of crime.

By the end of the second round of training in December, above 180 Congolese officials have been trained in financial investigation and asset recovery who are equipped with the knowledge and skills to better investigate and prosecute ML/TF cases and identify, recover and confiscate proceeds of crime.  During the second round, selected trainees and trainers with the mentorship of the trainers have identified and designed a high priority training courses to be organised and delivered across the DRC to enhance a sustainable national capacity of the country.

KENYA

In the 2022 mutual evaluation report (MER), Kenya is rated non-compliant in 11 and partially compliant in 26 FATF Recommendations respectively, and low in 9 Immediate Outcomes. Kenya is under FATF observation and is likely to relapse to the ICRG process. To address this, Kenya has attempted to address the Key Strategic Actions and has been preparing its Post Observation Period Report POPR). Kenya requested the AML/CFT ESCAY Project to provide technical assistance on multiple action areas. The AML/CFT ESCAY Project, within its limited finances, agreed to provide Technical Assistance on strengthening risk-based supervision of the real estate sector and support the preparation of POPR in the period between September and December 2023.

The objective of our assistance in Kenya was to identify and apply focused interventions on the key recommendations of the MER, to help Kenya prepare a comprehensive POPR that clearly demonstrates progresses made and to strengthen risk-based supervision of the real estate sector so that the nation improves its AML/CFT regime and compliance with the FATF requirements and standards.

Accordingly, we assisted Kenya to develop a portfolio of evidence (performance indicators) on information requirements to demonstrate progress made for each Recommended Action and trained multiple stakeholders in the preparation a POPR. The Project also supported Kenya in developing/reviewing a road map of activities to be implemented, risk mapping model anda risk-based supervision manual for the real estate sector, from which the Financial Reporting Centre of Kenya carried out inspections and finalised a draft POPR.

MADAGASCAR

Madagascar’s 2018 Mutual Evaluation Report revealed that it has multiple deficiencies in its AML/CFT regime and sooner or later, may fall to the FATF/ICRG review for its deficiencies. Madagascar faces significant Money Laundering risks related to underlying offenses such as corruption, tax and customs offenses.

Madagascar has however been actively engaged in building its AML/CFT capacity, spearheaded by its Financial Intelligence Unit, including effectively participating in the various activities implemented by the AML/CFT ESCAY Project. Madagascar’s Financial Intelligence Unit, SAMIFIN, formally requested the Project to provide training and mentoring on areas covering Immediate Outcomes 3, 5, 6, 7, 8 and 9 and corresponding Recommendations.

The scope of our Technical Assistance has involved detailed training on FATF standards, requirements and good practices to relevant agencies on the specific areas stated above. We have also provided mentoring on ways of implementing the standards which will strengthen the nation’s AML/CFT effectiveness. The primary objective of our technical assistance has been to strengthen Madagascar’s AML/CFT/CPF system and contribute to the technical and effectiveness compliance on the prioritized areas. At the end of the technical assistance, Madagascar will have more trained personnel, and be better prepared for the upcoming mutual evaluation, contributing to improved compliance with the FATF standards.

So far, more than 200 Malagasy officials have been trained in two rounds of face-to-face training in Antananarivo. The training also included a mentoring support to Malagasy officials through a joint exercise to identify existing gaps in the AML/CFT system and sharing expert suggestions on how to bridge the gaps supported by good practices on how and what to do to comply with the FATF standards.

MOZAMBIQUE

Mozambique is under FATF/ICRG process or under the grey list for her strategic AML/CFT deficiencies. To address the deficiencies, Mozambique has established a Technical Assistance Coordination Committee (TACC), chaired by the Prime Minister and supported by a national Multi-Sectoral Technical Group (GTM).

The AML/CFT ESCAY Project has been providing limited technical assistance to strengthen Mozambique’s AML/CFT/CPF system and comply with FATF standards and to thereby exit from the grey list.

The scope of our technical assistance has been on preventive measures and risk-based supervision of the DNFBPs, particularly focusing on the real estate sector. The objective of our technical assistance is to strengthen the capacity of Mozambican authorities responsible for the supervision of the Real Estate sector to effectively supervise the sector through a risk-based approach which is not only missing but also categorised as a high-risk sector. Our technical assistance has been carried out in close collaboration with the World Bank. The WB has been covering the wider DNFBPs sector.

Under this Technical Assistance, AML/CFT ESCAY Project has;

i) successfully organised three rounds of training workshops for DNFBPs supervisors on risk-based AML/CFT supervision, for DNFBPs on AML/CFT risks in the sector and preventive measures and their obligations, training for financial and n0n-financial supervisors including a session on training of trainers where trainees were drawn from supervisory agencies and the various DNFBPs;

ii) Developed a sectoral risk assessment of the real estate sector that informs authorities to apply risk-based measures;

iii) Developed a roadmap of activities and requirements to be implemented in response to the Key Recommended Activities based on MER findings and FATF/ICRG action plan; and iv) Developed manuals for supervisory agencies on Internal Supervisory Procedures and on off-site supervision; handbooks on supervision obliged entities, guidelines for the sector on how to comply with the AML/CFT/CPF standards, as well as an on-site supervision planning for 2024 that are adopted by FIU Mozambique.

The outcome of our project’s assistance, along with other different initiatives, is expected to enable Mozambique to enhance its AML/CFT system and comply with FATF standards and thereby exit from the grey list.

SOUTH SUDAN

South Sudan is under the grey list for multiple strategic deficiencies. South Sudan enacted an AML/CFT law in 2012 followed by the establishment of an FIU. However, there was no operational FIU until recently. The FIU recently recruited a good number of analysts who needed training to carry out analysis and dispatch financial intelligence reports, for which the FIU requested technical support from the AML/CFT ESCAY Project.

To this end, the Project trained 43 officials drawn from more than 10 relevant agencies including the FIU, law enforcement, public prosecution, revenue authority, anti-corruption, the central bank, and others on financial intelligence analysis. The training equipped the analysts with the necessary knowledge and skills. With this training, the South Sudan FIU is expected to be fully operationalised to receive STRs/SARs, undertake analysis and disseminate reports to competent authorities as well as exercise its supervisory mandates.