GUINEA BISSAU
Summary
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Sanctions

EU

FAFT AML Deficient

No

Higher Risk Areas

 

Compliance with FATF 40 + 9 Recommendations

US Dept of State Money Laundering assessment

Weakness in Government Legislation to combat Money Laundering

Not on EU White list equivalent jurisdictions

Corruption Index (Transparency International & W.G.I.)

World Governance Indicators (Average Score)

Failed States Index (Political Issues)(Average Score)

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Guinea Bissau is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Guinea Bissau was undertaken by the Financial Action Task Force (FATF) in 2010. According to that Evaluation, Guinea Bissau was deemed Compliant for 0 and Largely Compliant for 0 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

 

US Department of State Money Laundering assessment (INCSR)

Guinea-Bissau is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

OVERVIEW

 

With five separate Bissau-Guinean governments in 15 months, the country made little headway to mitigate the conditions that led to the labeling of Guinea-Bissau as a “narco-state”. Moreover, the suspension of directed budget support by multilateral institutions has reduced government revenues by almost half, leading to further cutbacks in already deprived and inadequate law enforcement and judicial systems.

 

The 88 islands that make up the Bijagos Archipelago, combined with a military still able to sidestep the authority of the civilian government with impunity, continue to make the country a favorite transshipment center for drugs. Drug barons from Latin America and their collaborators from the region and elsewhere have taken advantage of Guinea-Bissau’s extreme poverty, unemployment, history of political instability, lack of effective customs and law enforcement, and general insecurity to transship drugs destined for consumer markets, mainly in Europe. Using threats and bribes, drug traffickers have been able to infiltrate state structures and operate with impunity.

 

On April 8, 2010, the United States Department of the Treasury (Treasury) designated two Guinea-Bissau-based individuals, former Bissau-Guinean Navy Chief of Staff Admiral Jose Americo Bubo Na Tchuto and Air Force Chief of Staff Ibraima Papa Camara, as drug kingpins, thereby prohibiting U.S. persons from conducting financial or commercial transactions with those individuals and freezing any assets they may have under U.S. jurisdiction. The U.S. Drug Enforcement Administration arrested Na Tchuto in 2013. In October 2016, a New York court sentenced Na Tchuto to four years for drug trafficking, which includes the more than three years already served in detention. He was released in November 2016, and returned to Guinea-Bissau, where then Prime Minister Baciro Dja welcomed him as a “hero of the revolution.” The 2013 arrest of Na Tchuto and the outstanding arrest warrant against then Armed Forces Chief General Antonio Indjai, for drug trafficking and terrorism offenses, as well as the fact that Air Force Chief of Staff Ibraima Papa Camara remains in his position despite Treasury’s “kingpin” designation indicate that senior government officials continue to be involved in the drug trade and underscore the extent of complicity with drug trafficking at the highest levels.

 

VULNERABILITIES AND EXPECTED TYPOLOGIES

 

The cohesion and effectiveness of the state itself remain very poor, despite modest efforts to initiate reforms. Corruption is a major concern and the judiciary has reportedly demonstrated a lack of integrity on a number of occasions. Many government offices, including the justice ministry, lack the basic resources, such as electricity, they require to function.

 

The major sources of illicit funds are drug trafficking, illegal logging, and corruption. Real estate and investment in legitimate businesses serve as the most common forms of laundering. There is no record of investigations, prosecutions, or convictions for the offense of money laundering, and corruption within the government points to internal obstacles to the fight against drug trafficking and money laundering.

 

KEY AML LAWS AND REGULATIONS

 

The Anti-Money Laundering Uniform Law, a legislative requirement for members of the West African Economic and Monetary Union (WAEMU), has been adopted by Guinea-Bissau, but its publication has been pending for several years; thus, the law is not yet in force. Guinea-Bissau has yet to criminalize most of the designated predicate offenses and lacks adequate legal provisions for the conduct of CDD procedures. Article 26 of National Assembly Resolution No. 4 of 2004 stipulates that if a bank suspects money laundering it must obtain a declaration of all properties and assets from the subject and notify the Attorney General, who must then appoint a judge to investigate. The bank’s solicitation of an asset list from its client could amount to informing the subject of an investigation. In addition, banks are reluctant to file STRs for fear of alerting the subject because of allegedly indiscrete authorities. No STR regulations are under negotiation.

 

Guinea-Bissau is a member of the GIABA, a FATF-style regional body.

 

AML DEFICIENCIES

 

Guinea-Bissau is not in full compliance with international standards and accords against money laundering because of inadequate resources, weak border controls, under-resourced and understaffed police, competing national priorities, and historically low political will. The jurisdiction is currently considering ways to address deficiencies, but the instability of the government has hindered any progress.

 

The formal financial sector in Guinea-Bissau is undeveloped and poorly supervised; and the FIU is only partially functional, owing in part to the lack of resources, analytical staff, and technical equipment, among many other issues.

 

ENFORCEMENT/IMPLEMENTATION ISSUES AND COMMENTS

 

The woefully inadequate police and judicial systems make serious enforcement difficult. No money laundering-related prosecutions and convictions have occurred in recent years.

 

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SANCTIONS

In 2012 the European Union imposed restrictive measures, including asset freezes, directed against certain persons threatening the peace, security or stability of the Republic of Guinea-Bissau. This concerns in particular those who played a leading role in the mutiny of 1 April 2010 and the coup d’etat of 12 April 2012, and whose actions continue to be aimed at undermining the rule of law and the primacy of civilian power, and furthering instability in the country.

The UN has imposed a travel ban against certain persons threatening the peace, security or stability of the Republic of Guinea-Bissau

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

16

World Governance Indicator – Control of Corruption

3

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

Guinea-Bissau's legal economy is based on farming and fishing, but trafficking in narcotics is probably the most lucrative economic activity. The combination of limited economic prospects, a weak and faction-ridden government, and favourable geography have made this West African country a way station for drugs bound for Europe. Cashew nuts are the main source of income for rural communities and the country's main export crop. Cashew sector performance helps to determine the overall macroeconomic situation of the country and food security status of rural areas. In 2013 cashew production and exports were disrupted as a result of the March 2012 coup. Guinea-Bissau is heavily reliant on foreign aid, which has not recovered to pre-coup levels.

 

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FURTHER REPORTS

Guinea-Bissau : Extract from First and Second Reviews Under the Extended Credit Facility Arrangement (January 2017)

Combat Corruption and Rent Seeking

The government will build on its current efforts to address corruption and rent seeking. We will give sufficient autonomy and adequate resources to the Financial Intelligent Unit (CENTIF) to conduct its mandate as well as ensure adequate verification of asset declarations of high-ranking public officials. We will also strengthen and effectively mobilize the Anti-Money Laundering/Combating of the Financing of Terrorism (AML/CFT) framework to assist in detecting, prosecuting, and deterring corruption-related offences and smuggling within the framework of the WAEMU AML/CFT law. To this end, our AML/CFT national strategy plan was approved by the Council of Ministers and submitted to parliament for approval. This strategy plan will bring our framework in line with the 2012 FATF standard. Further, we will enforce the public procurement laws and procedures strictly, and prosecute violators swiftly to deter and root out rent seeking in the public and private sectors. Following an IMF diagnostic TA mission, the government will take appropriate actions to mitigate risk of money laundering in areas identified by the mission.

https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Guinea-Bissau-First-and-Second-Reviews-Under-the-Extended-Credit-Facility-Arrangement-44476