FATF Status

Senegal is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement  -  28 June 2024

In February 2021, Senegal made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. At its June 2024 plenary, the FATF made the initial determination that Senegal has substantially completed its action plan and warrant an on-site assessment to verify that the implementation of AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future.

Senegal has made the following key reforms including: (1) demonstrating consistent understanding of ML/TF risks across relevant authorities; (2) seeking international cooperation to facilitate ML/TF investigations and tracing of proceeds of crime located abroad, (3) demonstrating that FIs and DNFBPs are subject to adequate and effective risk-based supervision and sanction measures and that they improve compliance with AML/CFT obligations including by increasing STR reporting and establishing effective internal control mechanisms, (4) maintaining adequate, accurate and up-to-date basic and beneficial ownership information and ensuring its timely access by competent authorities, (5) increasing the capacity of the FIU staff to conduct analysis and increasing the dissemination of financial intelligence, (6) increasing the capacity of law enforcement authorities in the detection and investigation of ML and predicate offences in line with risk and maintaining statistics on cases investigated and prosecuted, (7) establishing policies and procedures for the identification and seizure of proceeds of crime and demonstrating the effective application of seizing and freezing powers of relevant competent authorities, (8) strengthening the law enforcement and prosecutorial authorities’ understanding of TF risks and CFT capacity and demonstrating that TF investigations are in line with Senegal’s risk profile, (9) implementing targeted financial sanction regime, and (10) implementing a risk-based monitoring regime for NPOs at risk of abuse for TF purposes.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Senegal was undertaken in 2022. According to that Evaluation, Senegal was deemed Compliant for 9 and Largely Compliant for 16 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

US Department of State Money Laundering assessment (INCSR)

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

Overview 

Senegal’s strategic coastal location makes it a regional business center for Francophone West Africa.  Illicit proceeds are derived from both domestic and foreign crimes.   

Senegal is exposed to risks from organized crime, drug trafficking, terrorist financing, internet and other fraud, and a large informal, cash-based sector.  Major sources of illicit proceeds include narcotics, human trafficking, illegal trade in wildlife and timber, counterfeiting, and public corruption. 

In February 2021, Senegal made a high-level political commitment to strengthen the effectiveness of its anti-money laundering/combating the financing of terrorism (AML/CFT) regime.  Since 2018, Senegal has made progress in improving technical compliance and effectiveness, including by adopting a national AML/CFT strategy and amending its legal and institutional framework.  However, the provisions of the law have yet to be fully implemented. The Government of Senegal should do so without delay. 

Analysis shows weaknesses in the following areas:  lack of specialization among law enforcement officials, prosecutors, and judges in handling complex financial crime investigations; lack of accurate data on money laundering/terrorist financing (ML/TF) and related risks; weak awareness-raising programs for stakeholders; inefficient implementation of a sanctions regime; lack of information on beneficial ownership; and the need for swift implementation of legislation on the management and disposal of seized property and asset recovery. 

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                          43

World Governance Indicator – Control of Corruption             54

Corruption poses moderate to high risks in most sectors in Senegal, with bribery and petty corruption being particularly common. Senegal's anti-corruption law is primarily contained in the Penal Code (in French), which criminalizes extortion, active and passive bribery, bribing foreign officials and money laundering, as well as private-to-private corruption. The legal status of facilitation payments is unclear, but they are expected when doing business. The legal status and expectations concerning gifts and hospitality is also difficult to determine. Overall, a weak judiciary hinders enforcement of legal provisions. For further information - GAN Integrity Business Anti-Corruption Portal

Senegal’s stable democracy, strong economic growth, and open economy offer attractive opportunities for foreign investment. Senegal’s macroeconomic profile remains generally stable, although aggressive measures to counter the economic impact of COVID-19, spending on public infrastructure projects, and rising commodity costs due to the conflict in Ukraine pushed public debt to 75 percent of GDP, above the debt distress threshold of the Economic Community of West African States (ECOWAS). The currency – the CFA franc used in eight West African countries – is pegged to the Euro and remains stable.

The Government of Senegal (GOS) welcomes foreign investment and has prioritized efforts to improve the business climate, and many companies choose Senegal as a base for operations in Francophone Africa. Since 2012, Senegal has pursued an ambitious development program, the Plan Senegal Emergent (Plan for an Emerging Senegal or “PSE”), to improve infrastructure, achieve economic reforms, increase investment in strategic sectors, and strengthen private sector competitiveness. The GOS expanded the “single window” system to provide services to companies, opening new service centers across the country, harmonizing more than 60 GOS websites, and digitizing dozens of government services and payment mechanisms. The national state-owned digital company, Sénégal Numérique (SENUM), plans to lay 4,500 kilometers of additional fiberoptic cable to increase internet access. Senegal has plans to transition power plants from heavy fuel oil to domestic natural gas after the recent discoveries of two significant oil and gas fields. One is expected to come online in late 2023. A Public-Private Partnership (PPP) law entered into force in November 2021 to modernize finance mechanisms, attract private sector participation, and expand local content requirements in public procurements.

With relatively good air transportation links, a modern airport, expanding seaports, improving ground transportation, and availability of mobile money and other banking technologies, Senegal aims to become a regional hub for passenger and cargo transportation and trade in goods and services. Three Special Economic Zones offer investors tax exemptions and other benefits. Repatriation of capital and income is generally straightforward, although the regional central bank sometimes limits the number offshore bank accounts for companies registered in Senegal and engaged in project finance. Although some companies report problems, Senegal scores favorably on corruption indicators compared to other countries in the region.

Despite Senegal’s many advantages, significant challenges remain. Investors at times cite burdensome and unpredictable tax administration, complex customs procedures, bureaucratic hurdles, opaque public procurement practices, an inefficient judicial system, inadequate access to financing, and a rigid labor market as obstacles. High real estate and energy costs, as well as high costs of inputs for manufacturing also constrain Senegal’s competitiveness. High levels of unemployment and underemployment, especially among the country’s large youth population, represent a long-term social and economic challenge.

A U.S.-Senegal Bilateral Investment Treaty went into effect in 1990. U.S. investment in Senegal has expanded since 2014, including investments in power generation, renewable energy, industry, and offshore oil and gas. The IMF reports that U.S. FDI stock in Senegal was approximately $114 million in 2019 (Table 1; up from $91 million in 2018). Although France is historically Senegal’s largest source of FDI, China overtook France as Senegal’s largest bilateral trade partner in 2019. Turkish economic influence is also rising, particularly in construction. Other important investment partners include Morocco, Saudi Arabia, other Gulf States, and France. Sectors attracting substantial investment include petroleum and natural gas, agribusiness, mining, tourism, manufacturing, and fisheries.

Investors can consult Senegal’s investment promotion agency (APIX) at www.investinsenegal.com  for information on opportunities, incentives, and procedures for foreign investment, including a copy of Senegal’s investment code.

Country Links

National Financial Intelligence Processing Unit (CENTIF)​

Central Bank of West African States (BCEAO)