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 was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Perceived Risks:

Guinea-Bissau entered its second year of constitutional democratic governance in 2015. After months of simmering political tensions between the president and prime minister, the president dismissed the prime minister in August. The country remained without a government until October, when the president approved a slate of ministers (the majority from the previous government) submitted by the new prime minister. The current Government of Guinea-Bissau has once again committed itself to continue a program of security, judicial, and financial reform and has sought and received assistance from international partners.

Despite these initial efforts on the part of the Bissau-Guinean government, the conditions that led to the labeling of Guinea-Bissau as a “narco-state” persist. The offshore location, lack of government presence, and inability to monitor shipping traffic of the 88 islands that make up the Bijagos Archipelago, combined with a military that is complicit in narcotics trafficking and is largely able to sidestep the authority of the civilian government with impunity, continue to make the country a favorite transshipment center for narcotics. Drug proceeds, often in U.S. dollars, circulate in Guinea-Bissau, albeit outside the formal financial system. 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. The value of the illicit narcotics trade in Guinea-Bissau, one of the poorest countries in the world, is much greater than its legitimate national income. Using threats and bribes, drug traffickers have been able to infiltrate state structures and operate with impunity.

The formal financial sector is undeveloped, poorly supervised, and dwarfed by the size of the unregulated economy. The cohesion and effectiveness of the state itself remain very poor, despite the beginning of the new government’s 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 government generally lacks effective financial management systems.

On May 18, 2012, the UNSC adopted resolution 2048 imposing a travel ban on five Bissau-Guinean military officers in response to their seizure of power from the civilian government in April 2012. On May 31, 2012, the EU followed with a travel ban and freezes on the assets of the military junta members. On April 8, 2010, the United States Department of the Treasury designated two Guinea-Bissau-based individuals, former Bissau-Guinean Navy Chief of Staff José Américo 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. Combined with a police history of seizing only modest quantities of drugs in recent years, the arrest of Na Tchuto and the outstanding arrest warrant issued from United States District Court, Southern District of New York against General Antonio Indjai, then Chief of The Guinea-Bissau Armed Forces, underscore the extent of complicity with drug trafficking at the highest levels of government. The September 2014 dismissal of Indjai by President Vaz was a positive indicator of increasing civilian authority over the military that, as noted above, has engaged in high-level drug trafficking activity with impunity. Camara continues as Air Force Chief of Staff and as a key advisor to President Vaz as member of the Council of State.

 

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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