## 1. Côte d’Ivoire: Level of Effectiveness ## Source details **Canonical URL:** [1. Côte d’Ivoire: Level of Effectiveness](https://www.imf.org/-/media/files/publications/cr/2023/english/1civea2023003.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2023/english/1civea2023003.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2023/english/1civea2023003.pdf.json) --- ### Key findings - Progress since the 2012 mutual evaluation: - Adoption of the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Law in 2016. - Drafting of a national risk assessment (NRA) and a national strategy. - Awareness-raising among various actors regarding AML/CFT issues. - Structural challenges limiting effectiveness: - Prevalence of cash and magnitude of the informal sector. - Cross-border nature of offenses. - Corruption. - Authorities: - Identified high-risk sectors and key domestic ML/TF threats but have not demonstrated a detailed understanding of ML and TF methods used in practice, hampering adoption of a risk-based approach. - Measures responding to certain high risks (e.g., corruption, real estate) are recent and only partially address the risks. - Coordination and institutional capacity: - National coordination exists between the FIU and most AML/CFT actors, but coordination does not extend to supervisory authorities. - FIU financial intelligence has contributed to notable ML convictions and confiscations; however: - Degree of sophistication of disseminations needs improvement. - Absence of TF disseminations constitutes a strategic deficiency. - FIU produces few comprehensive strategic analyses due to limited technical, IT, and human resources. - Investigations, prosecutions, and confiscations: - The Economic and Financial Crimes Tribunal (PPEF) and some investigative authorities effectively use financial intelligence; other investigative authorities make limited use of such intelligence and of information from foreign counterparts. - PPEF’s rapid rise has reinvigorated ML prosecutions, yet ML is not sufficiently prosecuted as an independent offense, limiting financial-focused investigations, especially internationally. - Prosecutions and confiscations are partially aligned with prominent threats; corruption has led to few prosecutions or convictions despite being systemic; environmental crime and tax fraud are insufficiently prosecuted. - Imposed sentences are generally effective, proportionate, and dissuasive. - Judicial authorities issue confiscation orders in the vast majority of ML cases; several complex confiscations have targeted significant amounts and diverse asset types; establishment of the Agency for the Management and Recovery of Criminal Assets (AGRAC) is a positive development. - Significant gaps remain regarding confiscation of assets held abroad and cash confiscation at the border. - Terrorist financing and targeted financial sanctions: - TF investigations remain low; no TF case has been brought to trial to date, and no TF conviction or TF-related confiscation has been made. - Targeted financial sanctions (TFS) under UNSCR 1267 are not implemented by authorities; a “voluntary” implementation by certain FIs is relied upon. Two recent designations under UNSCR 1373 have not been effective. - NPO-related TF threats have not been concretely identified; awareness-raising and TF-targeted supervision of NPOs are nascent; TF supervisory authority for NPOs not yet designated. - With one exception, TFS linked to proliferation financing (PF) are not implemented. - Private sector and DNFBPs: - Informal sector’s significance undermines customer due diligence (CDD) coverage. - FIs have limited understanding of ML risks and even more limited understanding of TF risks. - FIs backed by international and regional groups, and national banks, implement customer identification measures more consistently; implementation is limited in other FI categories. - FIs do not sufficiently identify beneficial owners (BOs) through control other than direct/indirect ownership or voting rights. - Implementation of PEP requirements is limited in effectiveness, particularly for national PEPs. - DNFBPs generally do not fulfill AML/CFT requirements; many lacked a designated supervisory authority or such authorities had not started activity at the time of the on-site visit. - Virtual asset service providers (VASPs) are neither licensed nor regulated or supervised due to a lacking legal framework. - Supervision and information access: - Supervisory authorities have not integrated ML/TF risks or cooperation with other competent authorities into AML/CFT supervisory strategies; risk-based supervision is not adopted across all sectors. - Timely access to basic legal person information is hampered by incomplete and fragmented records; BO information is not subject to verification and cannot be relied upon as accurate and up to date. - Judicial authorities rarely request mutual legal assistance (MLA); proactive use of other forms of cooperation is insufficient considering transnational nature of most proceeds-generating offenses. ### Risks and general situation - Major predicate offenses to ML include: - Corruption (primary). - Environmental crimes. - Drug trafficking. - Counterfeiting. - Trafficking in counterfeit medicine. - Fraud and scams. - Transnational implications: - Environmental crimes, drug and medicine trafficking have international implications; Côte d’Ivoire is a transit country for international drug trafficking. - Significant portion of trafficking proceeds appears laundered in the real estate sector. - Terrorism financing exposure: - Côte d’Ivoire is exposed to a high TF risk and growing terrorist threats, notably in northern border regions. - Recent trends: funds collected in cash via criminal activity (e.g., sale of stolen cattle) and transferred through informal channels. - Possible links between TF and certain predicate offenses (drug trafficking, illicit gold mining) noted by authorities. - Geographic and economic factors increasing ML/TF exposure: - Country’s position, importance in regional economy, and developed/open financial sector. - Significant cross-border commercial and financial flows with regional partners and international financial centers in Europe and Asia. - Role as a financial center for the WAEMU region. - Vulnerability factors: - Porous borders. - Significance of the informal sector and prevalence of large cash transactions, including in real estate. - Non-regulated cash flows that may exacerbate TF vulnerability. ### Findings on compliance and effectiveness H3 A. Assessment of risk, coordination, and policy setting - Authorities identified high-risk sectors and major domestic ML/TF threats but lack detailed understanding of ML/TF methods in practice, particularly regarding: - Role of legal persons. - Financial sector. - DNFBPs. - Cross-border flows (formal and informal). - National Strategy adopted in response to identified risks; some measures under implementation. - PPEF strengthened with encouraging results. - Sensitization of several DNFBP categories improved understanding of AML/CFT obligations. - NRA has not been used to adapt preventive measures required of reporting sectors or to guide supervisory authorities. - Coordination Committee has facilitated strategic coordination and NRA work; operational coordination occurs between FIU and certain authorities/sectors, but: - Authorities do not fully use available mechanisms and information. - Coordination does not extend to all relevant actors, notably supervisory authorities. H3 B. Financial intelligence, ML investigations, prosecutions, and confiscations - FIU capacity limitations impede timely operational and strategic analyses because of: - Inadequate technical resources. - Insufficient human resources. - Major discrepancies in distribution and completeness of STRs. - FIU disseminations have contributed to noteworthy ML convictions and confiscations but are: - Partially aligned with major threats. - Generally not resulting in investigations into complex ML cases. - Absent for TF-related disseminations (strategic deficiency). - Use of intelligence and international cooperation: - PPEF and some investigative authorities make good use of financial intelligence to develop evidence and identify criminal proceeds; other investigative authorities do not sufficiently use financial intelligence for ML, TF, and predicate offense investigations. - Use of information from foreign partners is very low and constitutes a major deficiency given transnational risks. - Since establishment of PPEF: - Dynamic in prosecuting organized crime and ML is strong. - ML offenses are more systematically targeted in predicate offense prosecutions. - Prosecution and conviction rate, compared to investigations initiated, is very high. - Areas for improvement: - Promote parallel financial investigations; current public prosecutor policy is not aimed at starting parallel ML investigations. - Expand prosecution of ML as an autonomous offense beyond cases initiated by FIU reports. - Better exploit international aspects of investigations and seek proceeds located abroad. - Recent statistics and trends: - Corruption cases rarely lead to prosecution or conviction despite systemic nature. - Environmental crime and tax fraud remain insufficiently prosecuted. - Convictions against legal persons: - Criminal prosecutions have been made against legal persons in 46 cases, and four convictions have been made. - Confiscation practice: - Judicial authorities issue confiscation in the vast majority of ML cases. - Several complex confiscation orders have targeted huge amounts and a variety of assets, including assets of legal persons and confiscation of assets of equivalent value. - Government authorities have not prioritized seizure and confiscation in criminal justice policy. - AML/CFT Law overhaul provides for confiscation of instrumentalities of certain predicate offenses corresponding to main threats. - Côte d’Ivoire has practically never filed an MLA request for seizure or confiscation with an international component, negatively impacting effectiveness. - Cash confiscations at the border are not adequately proportionate to risks. H3 C. Terrorism financing and proliferation financing - Strategic and operational gaps: - Côte d’Ivoire lacks a national counter-terrorism strategy that incorporates TF investigations. - A recently implemented coordinated operational approach has allowed integration of TF investigations into investigations related to terrorist attacks and activities, contributing to TF cases for prosecution. - TF investigative and prosecutorial outcomes: - Despite high TF risk profile: - For the most part, TF prosecutions were launched following terrorist attacks; number of TF investigations remains low. - No TF case has been brought to trial to date; no TF conviction; no TF-related confiscation. - TFS under UNSCR 1267 are not implemented by authorities; reliance on “voluntary” FI implementation. - Two recent UNSCR 1373 designations have not been effective. - NPO threat identification and TF-targeted supervision remain nascent; TF supervisory authority for NPOs not designated. - With one exception, TFS linked to proliferation financing (PF) are not implemented. ### Terrorist Financing (TF) investigations and prosecutions - Côte d’Ivoire has initiated nine TF prosecutions. - Prosecuted cases were, for the most part, initiated following terrorist attacks against Côte d’Ivoire. - The number of TF investigations remains low. - To date, no case has been brought to trial; thus, no convictions have been obtained, and no confiscations have been ordered. - The financing of a terrorist organization, for any purpose whatsoever, is not criminalized, limiting the ability to effectively prosecute and sanction TF offenses. - Investigations have identified certain TF cases relating to the sale of cattle and the use of mobile money. - Identification of potential cases involving the financing of terrorist organizations, individuals, or activities outside Côte d’Ivoire does not appear to be a priority. ### Targeted Financial Sanctions (TFS) and designations - The Community-wide legal framework for the implementation of TFS under UNSCR 1267 only applies to banks and financial establishments. - TFS are not implemented by Côte d’Ivoire due to the lack of decisions by the WAEMU Council of Ministers or of a national mechanism to bridge this gap. - The 1267 List is applied by the vast majority of banks – and several other FIs – on a voluntary basis. - DNFBPs do not implement TFS. - The few national designations made under UNSCR 1373 were not implemented without delay and did not prove effective. - Côte d’Ivoire has not yet proposed any designations to the 1267/1989 Committee and has never called upon a third country to give effect to actions taken as part of its own freezing mechanisms. - There has been no freezing of funds or confiscation of assets in the framework of TFS implementation. - With the exception of one entity designated in 2020, TFS related to PF are not implemented due to the absence of Orders aimed at transposing the 1718 and 2231 Lists into national law. - The 1718 and 2231 Lists are applied by the vast majority of banks, and a significant number of other FIs, on a voluntary basis; DNFBPs do not implement TFS in this context. - No independent efforts have been demonstrated for identifying and freezing the assets of targeted persons and entities in the context of TFS relating to PF. ### Non-profit organizations (NPOs) - Authorities have not yet identified the totality of active NPOs in Côte d’Ivoire, nor the nature of threats posed by terrorist entities against NPOs. - Relevant awareness-raising efforts remain nascent. - Some general supervisory activities have been put in place, but those do not specifically target TF. - The TF supervisory authority has not yet been appointed. - Priority action: designate a national authority for maintaining a dedicated NPO register and monitor NPOs for TF risks to apply risk-based measures to NPOs at risk of being abused for TF and undertake appropriate supervision. ### Preventive measures (FIs, DNFBPs, VASPs) - Limitations to preventive framework effectiveness: - Significance of the informal sector, which by definition does not implement due diligence measures, limits the overall effectiveness of preventive measures. - FIs have a limited understanding of ML risks, and an even more limited understanding of TF risks. - ML/TF typologies are not understood; vulnerabilities relating to legal persons and cross-border flows are not recognized. - Gaps in the understanding of ML/TF typologies hamper the fulfillment of AML/CFT obligations based on risks. - Customer due diligence and reporting: - FIs that are part of international or regional groups, as well as national banks, implement customer identification measures; quality of implementation is more variable in other FI categories. - The majority of FIs do not have measures in place for identifying forms of control other than direct or indirect ownership of capital or voting rights; this information is not updated systematically. - Most FIs rely on “commercial” lists for the identification of PEPs, which mainly include foreign PEPs, significantly impacting the effectiveness of anti-corruption measures. - Reporting activity does not reflect major ML/TF risks in Côte d’Ivoire; implementation of suspicious activity reporting varies greatly in the banking sector and is inadequate in other FI types. - FIs are generally late to report suspicions; the number of STRs on attempted transactions is very limited. - DNFBPs and VASPs: - The understanding of ML/TF risks is non-existent among DNFBPs, which do not implement AML/CFT obligations. - There are active VASPs in Côte d’Ivoire; however, they are neither licensed, nor regulated, nor supervised, due to the absence of a relevant legal framework, and as a result they do not implement due diligence measures. ### Supervision - Institutional and operational gaps: - Fit-and-proper checks can be improved. - Supervisory authorities lack effective means for identifying and combating activities conducted without a license, particularly in the foreign exchange and MVTS sectors. - FI supervisory authorities’ understanding of risks across sectors and actors is insufficient. - Risk-based supervision has not yet been adopted in all sectors. - Specific supervisory observations: - The BC has developed supervisory tools and methods, but collected information and data do not allow for a holistic understanding and identification of ML/TF risks. - The intensity and frequency of ML/TF inspections by the BC/GSBC are not fully based on ML/TF risks. - National supervisory authorities have started taking supervisory action in the foreign exchange and small Decentralized Financial System (DFS) sectors; however, this action remains limited relative to the risks. - Sanctions do not reflect the severity of identified shortcomings and do not have the intended impact on compliance levels of FIs. - Self-regulatory bodies (SRBs) were designated for lawyers, notaries, public accountants, judicial officers, and justice commissioners towards the end of the on-site visit but had not commenced operations. - Supervisory authorities for other DNFBPs (real estate agents and brokers, DPMS, casinos and gaming establishments, business agents (agents d’affaires), service providers to corporations and trusts, and auditors) have not been assigned yet. - Efforts to raise awareness among DNFBPs are commendable but still embryonic; business agents are not subject to AML/CFT obligations. ### Transparency and Beneficial Ownership (BO) - Authorities’ understanding of risks associated with legal persons remains quite limited and fragmented despite frequent use of legal persons for concealment of criminal proceeds. - Côte d’Ivoire has not undertaken an assessment of ML/TF risks associated with the various categories of legal persons. - Basic information that is easily accessible and searchable remains fragmentary; the informal sector plays a significant role. - Resources available to the Trade and Personal Property Credit Register (RCCM) do not allow it to perform proper inspections and ensure basic information is accurate and up to date. - The General Tax Directorate (DGI) provides, upon demand and in a timely manner, BO information kept in legal persons registers. - Record-keeping in legal persons is not subject to regular and sufficient audits. - Since 2020, the DGI also collects information on the BO of legal persons at the time of their creation but has not demonstrated to what extent this facilitates access to such information; there is no mechanism ensuring regular updates. - Authorities cannot rely on FIs and DNFBPs in accessing timely, accurate, and updated BO information. - The RCCM is not equipped to sanction any natural or legal person that fails to provide basic information on a legal person or keep such information up to date. - Tax authorities indicated they have imposed ad hoc sanctions against legal persons that failed to fulfill BO requirements, but it could not be established that such sanctions are effective, proportionate, and dissuasive. ### International cooperation - Judicial authorities rarely request MLA despite the great threat posed by transnational crime. - When they receive MLA requests, they do not provide constructive and timely mutual legal assistance. - Beyond MLA, with the exception of the FIU, competent authorities rarely cooperate with foreign counterparts. - Proactive use of international cooperation is insufficient considering the transnational nature of most predicate offenses. - Authorities only rarely exchange BO information with foreign partners. - Priority action: put in place an operational follow-up mechanism for the effective processing and prioritization of MLA requests to provide and request constructive, timely cooperation, and promote the capacity of relevant authorities. ### Priority actions (prioritized recommended actions) - Strengthen the legal framework, particularly regarding preventive measures, the criminalization of TF, TFS in relation to TF, confiscation, and international cooperation. - Deepen the understanding of ML/TF risks by authorities and reporting entities, including risks associated with legal persons; focus on major threats such as corruption and TF, and vulnerabilities in the real estate and non-profit sectors, as well as cross-border flows and the informal economy. - Implement effective supervision for FIs and DNFBPs, in collaboration with supranational authorities where necessary; supervisory strategies, controls, and sanctions must be risk-based. Designate supervisory authorities or SRBs for all DNFBPs. - Take measures to mitigate ML risks emanating from corruption, including effective BO identification and risk management measures for PEPs. Make better use of financial intelligence and foreign-obtained information in judicial investigations. - Update the FIU’s IT system and provide adequate human resources and analytical tools to allow it to produce more operational and strategic analyses of higher sophistication and number. - Issue guidelines, typologies, and targeted red flags to improve reporting by covered entities, particularly in high-risk sectors; the FIU should provide feedback to reporting entities. - Develop an overall criminal justice policy prioritizing ML and confiscation as main tools for countering all forms of serious crime and promote international criminal investigations and recovery of assets held abroad. - Ensure timely access by authorities to up to date and accurate information on legal persons and their beneficial owners to promote complex ML investigations linked to major threats. - Integrate CFT into the counter-terrorism policy; significantly increase the number of TF investigations, prosecutions, and convictions by building the capacities of investigative authorities. - Implement TFS under UNSCR 1267 without delay and consider imposing TFS at the national level. - Designate a national authority for maintaining a dedicated NPO register and monitor NPOs for TF risks; apply risk-based measures and undertake appropriate supervision. - Reinforce efforts in relation to the collection of statistics, particularly through the establishment of the national AML/CFT/CPF statistics service. ### Effectiveness and compliance ratings (as presented) - Effectiveness level ratings (high, substantial, moderate, or low): - IO.1 – Risk, policy, and coordination: Moderate - IO.2 – International cooperation: Low - IO.3 – Supervision: Low - IO.4 – Preventive measures: Low - IO.5 – Legal persons and arrangements: Low - IO.6 – Financial intelligence: Low - IO.7 – ML investigation and prosecution: Moderate - IO.8 – Confiscation: Moderate - IO.9 – TF investigation and prosecution: Low - IO.10 – TF preventive measures and financial sanctions: Low - IO.11 – PF financial sanctions: Low - Level of Technical Compliance (C—Compliant, LC—Largely Compliant, PC—Partially Compliant, NC—Non-Compliant): - R.1 – Assessing risks and applying and risk-based approach: PC - R.2 – National cooperation and coordination: PC - R.3 – Money laundering offense: LC - R.4 – Confiscation and provisional measures: PC - R.5 – Terrorist financing offense: PC - R.6 – Targeted financial sanctions related to terrorism & terrorist financing: NC - R.7 – Targeted financial sanctions related to proliferation: NC - R.8 – Non-profit organizations: NC - R.9 – Financial institution secrecy laws: LC - R.10 – Customer due diligence: PC - R.11 – Record-keeping: PC - R.12 – Politically exposed persons: PC - R.13 – Correspondent banking: LC - R.14 – Money or value transfer services: PC - R.15 – New technologies: NC - R.16 – Wire transfers: PC - R.17 – Reliance on third parties: NC - R.18 – Internal controls and foreign branches and subsidiaries: PC - R.19 – Higher-risk countries: PC - R.20 – Reporting of suspicious transactions: PC - R.21 – Tipping-off and confidentiality: LC - R.22 – DNFBPs: customer due diligence: PC - R.23 – DNFBPs: other measures: PC - R.24 – Transparency and beneficial ownership of legal persons: PC - R.25 – Transparency and beneficial ownership of legal arrangements: PC - R.26 – Regulation and supervision of financial institutions: PC - R.27 – Powers of supervisors: PC - R.28 – Regulation and supervision of DNFBPs: PC - R.29 – Financial intelligence units: NC - R.30 – Responsibilities of law enforcement and investigative authorities: PC - R.31 – Powers of law enforcement and investigative authorities: PC - R.32 – Cash couriers: LC - R.33 – Statistics: PC - R.34 – Guidance and feedback: PC - R.35 – Sanctions: PC - R.36 – International instruments: PC - R.37 – Mutual legal assistance: LC - R.38 – Mutual legal assistance: freezing and confiscation: PC - R.39 – Extradition: LC - R.40 – Other forms of international cooperation: PC *Source: 1civea2023003 - 1. Côte d’Ivoire: Level of Effectiveness* ### 1. Côte d’Ivoire: Level of Effectiveness ___________________________________________________________ 14 ### 1. Côte d’Ivoire: Level of Effectiveness ### Key findings - Côte d’Ivoire has achieved progress in countering money laundering and terrorist financing (ML/TF) since the 2012 mutual evaluation, notably: - Adoption of the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Law in 2016. - Drafting of a national risk assessment (NRA) and a national strategy. - Awareness-raising among various actors regarding AML/CFT issues. - Structural challenges that continue to limit effectiveness: - Prevalence of cash and magnitude of the informal sector. - Cross-border nature of offenses. - Corruption. - Authorities identified high-risk sectors and key domestic ML/TF threats but have not demonstrated a detailed understanding of ML and TF methods used in practice, hampering adoption of a risk-based approach. - Measures taken in response to certain high risks (e.g., corruption, real estate) are recent and only partially address the risks. - National coordination exists between the FIU and most AML/CFT actors, but coordination does not extend to supervisory authorities. - Financial intelligence from the FIU has contributed to notable ML convictions and confiscations, but: - Degree of sophistication of disseminations needs improvement. - Absence of TF disseminations constitutes a strategic deficiency. - FIU produces few comprehensive strategic analyses due to limited technical, IT, and human resources. - The Economic and Financial Crimes Tribunal (PPEF) and some investigative authorities effectively use financial intelligence; other investigative authorities make limited use of such intelligence and of information from foreign counterparts. - The PPEF’s rapid rise has reinvigorated ML prosecutions, yet ML is not sufficiently prosecuted as an independent offense, limiting financial-focused investigations, especially internationally. - Prosecutions and confiscations are partially aligned with prominent threats; corruption has led to few prosecutions or convictions despite being systemic; environmental crime and tax fraud are insufficiently prosecuted. - Imposed sentences are generally effective, proportionate, and dissuasive. - Judicial authorities issue confiscation orders in the vast majority of ML cases; several complex confiscations have targeted significant amounts and diverse asset types; establishment of the Agency for the Management and Recovery of Criminal Assets (AGRAC) is a positive development. - Significant gaps remain regarding confiscation of assets held abroad and cash confiscation at the border. - TF investigations remain low; no TF case has been brought to trial to date, and no TF conviction or TF-related confiscation has been made. - Targeted financial sanctions (TFS) under UNSCR 1267 are not implemented by authorities; a “voluntary” implementation by certain FIs is relied upon. Two recent designations under UNSCR 1373 have not been effective. - NPO-related TF threats have not been concretely identified; awareness-raising and TF-targeted supervision of NPOs are nascent; TF supervisory authority for NPOs not yet designated. - With one exception, TFS linked to proliferation financing (PF) are not implemented. - The informal sector’s significance undermines customer due diligence (CDD) coverage; FIs have limited understanding of ML risks and even more limited understanding of TF risks. - FIs backed by international and regional groups, and national banks, implement customer identification measures more consistently; implementation is limited in other FI categories. - FIs do not sufficiently identify beneficial owners (BOs) through control other than direct/indirect ownership or voting rights. - Implementation of PEP requirements is limited in effectiveness, particularly for national PEPs. - DNFBPs generally do not fulfill AML/CFT requirements; many lacked a designated supervisory authority or such authorities had not started activity at the time of the on-site visit. - Virtual asset service providers (VASPs) are neither licensed nor regulated or supervised due to a lacking legal framework. - Supervisory authorities have not integrated ML/TF risks or cooperation with other competent authorities into AML/CFT supervisory strategies; risk-based supervision is not adopted across all sectors. - Timely access to basic legal person information is hampered by incomplete and fragmented records; BO information is not subject to verification and cannot be relied upon as accurate and up to date. - Judicial authorities rarely request mutual legal assistance (MLA); proactive use of other forms of cooperation is insufficient considering transnational nature of most proceeds-generating offenses. ### Risks and general situation - Major predicate offenses to ML include: - Corruption (primary). - Environmental crimes. - Drug trafficking. - Counterfeiting. - Trafficking in counterfeit medicine. - Fraud and scams. - Several offenses (environmental crimes, drug and medicine trafficking) have international implications; Côte d’Ivoire is a transit country for international drug trafficking. - Significant portion of trafficking proceeds appears laundered in the real estate sector. - Côte d’Ivoire is exposed to a high TF risk and growing terrorist threats, notably in northern border regions. - Recent trends: funds collected in cash via criminal activity (e.g., sale of stolen cattle) and transferred through informal channels. - Possible links between TF and certain predicate offenses (drug trafficking, illicit gold mining) noted by authorities. - Geographic and economic factors increasing ML/TF exposure: - Country’s position, importance in regional economy, and developed/open financial sector. - Significant cross-border commercial and financial flows with regional partners and international financial centers in Europe and Asia. - Role as a financial center for the WAEMU region. - Vulnerability factors: - Porous borders. - Significance of the informal sector and prevalence of large cash transactions, including in real estate. - Non-regulated cash flows that may exacerbate TF vulnerability. ### Findings on compliance and effectiveness A. Assessment of risk, coordination, and policy setting - Authorities identified high-risk sectors and major domestic ML/TF threats but lack detailed understanding of ML/TF methods in practice, particularly regarding: - Role of legal persons. - Financial sector. - DNFBPs. - Cross-border flows (formal and informal). - National Strategy adopted in response to identified risks; some measures under implementation. - PPEF strengthened with encouraging results. - Sensitization of several DNFBP categories improved understanding of AML/CFT obligations. - NRA has not been used to adapt preventive measures required of reporting sectors or to guide supervisory authorities. - Coordination Committee has facilitated strategic coordination and NRA work; operational coordination occurs between FIU and certain authorities/sectors, but: - Authorities do not fully use available mechanisms and information. - Coordination does not extend to all relevant actors, notably supervisory authorities. B. Financial intelligence, ML investigations, prosecutions, and confiscations - FIU capacity is low to produce timely operational and strategic analyses because of: - Inadequate technical resources. - Insufficient human resources. - Major discrepancies in distribution and completeness of STRs. - FIU disseminations have contributed to noteworthy ML convictions and confiscations but are: - Partially aligned with major threats. - Generally not resulting in investigations into complex ML cases. - Absent for TF-related disseminations (strategic deficiency). - PPEF and some investigative authorities make good use of financial intelligence to develop evidence and identify criminal proceeds; other investigative authorities do not sufficiently use financial intelligence for ML, TF, and predicate offense investigations. - Use of information from foreign partners is very low and constitutes a major deficiency given transnational risks. - Since establishment of PPEF: - Dynamic in prosecuting organized crime and ML is strong. - ML offenses are more systematically targeted in predicate offense prosecutions. - Prosecution and conviction rate, compared to investigations initiated, is very high. - Areas for improvement: - Promote parallel financial investigations; current public prosecutor policy is not aimed at starting parallel ML investigations. - Expand prosecution of ML as an autonomous offense beyond cases initiated by FIU reports. - Better exploit international aspects of investigations and seek proceeds located abroad. - Recent statistics show progress in types of prosecuted offenses, but: - Corruption cases rarely lead to prosecution or conviction despite systemic nature. - Environmental crime and tax fraud remain insufficiently prosecuted. - Convictions against legal persons: - Criminal prosecutions have been made against legal persons in 46 cases, and four convictions have been made. - Confiscation practice: - Judicial authorities issue confiscation in the vast majority of ML cases. - Several complex confiscation orders have targeted huge amounts and a variety of assets, including assets of legal persons and confiscation of assets of equivalent value. - Government authorities have not prioritized seizure and confiscation in criminal justice policy. - AML/CFT Law overhaul provides for confiscation of instrumentalities of certain predicate offenses corresponding to main threats. - Côte d’Ivoire has practically never filed an MLA request for seizure or confiscation with an international component, negatively impacting effectiveness. - Cash confiscations at the border are not adequately proportionate to risks. C. Terrorism financing and proliferation financing - Côte d’Ivoire lacks a national counter-terrorism strategy that incorporates TF investigations. - A recently implemented coordinated operational approach has allowed integration of TF investigations into investigations related to terrorist attacks and activities, contributing to TF cases for prosecution. - Despite high TF risk profile: - For the most part, TF prosecutions were launched following terrorist attacks; number of TF investigations remains low. - No TF case has been brought to trial to date; no TF conviction; no TF-related confiscation. - TFS under UNSCR 1267 are not implemented by authorities; reliance on “voluntary” FI implementation. - Two recent UNSCR 1373 designations have not been effective. - NPO threat identification and TF-targeted supervision remain nascent; TF supervisory authority for NPOs not designated. - With one exception, TFS linked to proliferation financing (PF) are not implemented. *Source: 1civea2023003 - 1. Côte d’Ivoire: Level of Effectiveness* ### 19. Côte d’Ivoire has initiated nine TF prosecutions. Prosecuted cases were, for the most part, ### 19. Côte d’Ivoire has initiated nine TF prosecutions. Prosecuted cases were, for the most part, ### Terrorist Financing (TF) investigations and prosecutions - Côte d’Ivoire has initiated nine TF prosecutions. - Prosecuted cases were, for the most part, initiated following terrorist attacks against Côte d’Ivoire. - The number of TF investigations remains low. - To date, no case has been brought to trial; thus, no convictions have been obtained, and no confiscations have been ordered. - The financing of a terrorist organization, for any purpose whatsoever, is not criminalized, limiting the ability to effectively prosecute and sanction TF offenses. - Investigations have identified certain TF cases relating to the sale of cattle and the use of mobile money. - Identification of potential cases involving the financing of terrorist organizations, individuals, or activities outside Côte d’Ivoire does not appear to be a priority. ### Targeted Financial Sanctions (TFS) and designations - The Community-wide legal framework for the implementation of TFS under UNSCR 1267 only applies to banks and financial establishments. - TFS are not implemented by Côte d’Ivoire due to the lack of decisions by the WAEMU Council of Ministers or of a national mechanism to bridge this gap. - The 1267 List is applied by the vast majority of banks – and several other FIs – on a voluntary basis. - DNFBPs do not implement TFS. - The few national designations made under UNSCR 1373 were not implemented without delay and did not prove effective. - Côte d’Ivoire has not yet proposed any designations to the 1267/1989 Committee and has never called upon a third country to give effect to actions taken as part of its own freezing mechanisms. - There has been no freezing of funds or confiscation of assets in the framework of TFS implementation. - With the exception of one entity designated in 2020, TFS related to PF are not implemented due to the absence of Orders aimed at transposing the 1718 and 2231 Lists into national law. - The 1718 and 2231 Lists are applied by the vast majority of banks, and a significant number of other FIs, on a voluntary basis; DNFBPs do not implement TFS in this context. - No independent efforts have been demonstrated for identifying and freezing the assets of targeted persons and entities in the context of TFS relating to PF. ### Non-profit organizations (NPOs) - Authorities have not yet identified the totality of active NPOs in Côte d’Ivoire, nor the nature of threats posed by terrorist entities against NPOs. - Relevant awareness-raising efforts remain nascent. - Some general supervisory activities have been put in place, but those do not specifically target TF. - The TF supervisory authority has not yet been appointed. - A national authority should be designated for maintaining a dedicated NPO register and monitor the latter with regards to TF issues in order to apply risk-based measures to NPOs at risk of being abused for TF and undertake appropriate supervision in this regard (priority action). ### Preventive measures (FIs, DNFBPs, VASPs) - The significance of the informal sector, which by definition does not implement due diligence measures, limits the overall effectiveness of preventive measures. - FIs have a limited understanding of ML risks, and an even more limited understanding of TF risks. - ML/TF typologies are not understood; vulnerabilities relating to legal persons and cross-border flows are not recognized. - Gaps in the understanding of ML/TF typologies hamper the fulfillment of AML/CFT obligations based on risks. - FIs that are part of international or regional groups, as well as national banks, implement customer identification measures; quality of implementation is more variable in other FI categories. - The majority of FIs do not have measures in place for identifying forms of control other than direct or indirect ownership of capital or voting rights; this information is not updated systematically. - Most FIs rely on “commercial” lists for the identification of PEPs, which mainly include foreign PEPs, significantly impacting the effectiveness of anti-corruption measures. - Reporting activity does not reflect major ML/TF risks in Côte d’Ivoire; implementation of suspicious activity reporting varies greatly in the banking sector and is inadequate in other FI types. - FIs are generally late to report suspicions; the number of STRs on attempted transactions is very limited. - The understanding of ML/TF risks is non-existent among DNFBPs, which do not implement AML/CFT obligations. - There are active VASPs in Côte d’Ivoire; however, they are neither licensed, nor regulated, nor supervised, due to the absence of a relevant legal framework, and as a result they do not implement due diligence measures. ### Supervision - Fit-and-proper checks can be improved. - Supervisory authorities lack effective means for identifying and combating activities conducted without a license, particularly in the foreign exchange and MVTS sectors. - FI supervisory authorities’ understanding of risks across sectors and actors is insufficient. - Risk-based supervision has not yet been adopted in all sectors. - The BC has developed supervisory tools and methods, but collected information and data do not allow for a holistic understanding and identification of ML/TF risks. - The intensity and frequency of ML/TF inspections by the BC/GSBC are not fully based on ML/TF risks. - National supervisory authorities have started taking supervisory action in the foreign exchange and small Decentralized Financial System (DFS) sectors; however, this action remains limited relative to the risks. - Sanctions do not reflect the severity of identified shortcomings and do not have the intended impact on compliance levels of FIs. - Self-regulatory bodies (SRBs) were designated for lawyers, notaries, public accountants, judicial officers, and justice commissioners towards the end of the on-site visit but had not commenced operations. - Supervisory authorities for other DNFBPs (real estate agents and brokers, DPMS, casinos and gaming establishments, business agents (agents d’affaires), service providers to corporations and trusts, and auditors) have not been assigned yet. - Efforts to raise awareness among DNFBPs are commendable but still embryonic; business agents are not subject to AML/CFT obligations. ### Transparency and Beneficial Ownership (BO) - Authorities’ understanding of risks associated with legal persons remains quite limited and fragmented despite frequent use of legal persons for concealment of criminal proceeds. - Côte d’Ivoire has not undertaken an assessment of ML/TF risks associated with the various categories of legal persons. - Basic information that is easily accessible and searchable remains fragmentary; the informal sector plays a significant role. - Resources available to the Trade and Personal Property Credit Register (RCCM) do not allow it to perform proper inspections and ensure basic information is accurate and up to date. - The General Tax Directorate (DGI) provides, upon demand and in a timely manner, BO information kept in legal persons registers. - Record-keeping in legal persons is not subject to regular and sufficient audits. - Since 2020, the DGI also collects information on the BO of legal persons at the time of their creation but has not demonstrated to what extent this facilitates access to such information; there is no mechanism ensuring regular updates. - Authorities cannot rely on FIs and DNFBPs in accessing timely, accurate, and updated BO information. - The RCCM is not equipped to sanction any natural or legal person that fails to provide basic information on a legal person or keep such information up to date. - Tax authorities indicated they have imposed ad hoc sanctions against legal persons that failed to fulfill BO requirements, but it could not be established that such sanctions are effective, proportionate, and dissuasive. ### International cooperation - Judicial authorities rarely request MLA despite the great threat posed by transnational crime. - When they receive MLA requests, they do not provide constructive and timely mutual legal assistance. - Beyond MLA, with the exception of the FIU, competent authorities rarely cooperate with foreign counterparts. - Proactive use of international cooperation is insufficient considering the transnational nature of most predicate offenses. - Authorities only rarely exchange BO information with foreign partners. - Priority action: put in place an operational follow-up mechanism for the effective processing and prioritization of MLA requests to provide and request constructive, timely cooperation, and promote the capacity of relevant authorities. ### Priority actions (prioritized recommended actions) - Strengthen the legal framework, particularly regarding preventive measures, the criminalization of TF, TFS in relation to TF, confiscation, and international cooperation. - Deepen the understanding of ML/TF risks by authorities and reporting entities, including risks associated with legal persons; focus on major threats such as corruption and TF, and vulnerabilities in the real estate and non-profit sectors, as well as cross-border flows and the informal economy. - Implement effective supervision for FIs and DNFBPs, in collaboration with supranational authorities where necessary; supervisory strategies, controls, and sanctions must be risk-based. Designate supervisory authorities or SRBs for all DNFBPs. - Take measures to mitigate ML risks emanating from corruption, including effective BO identification and risk management measures for PEPs. Make better use of financial intelligence and foreign-obtained information in judicial investigations. - Update the FIU’s IT system and provide adequate human resources and analytical tools to allow it to produce more operational and strategic analyses of higher sophistication and number. - Issue guidelines, typologies, and targeted red flags to improve reporting by covered entities, particularly in high-risk sectors; the FIU should provide feedback to reporting entities. - Develop an overall criminal justice policy prioritizing ML and confiscation as main tools for countering all forms of serious crime and promote international criminal investigations and recovery of assets held abroad. - Ensure timely access by authorities to up to date and accurate information on legal persons and their beneficial owners to promote complex ML investigations linked to major threats. - Integrate CFT into the counter-terrorism policy; significantly increase the number of TF investigations, prosecutions, and convictions by building the capacities of investigative authorities. - Implement TFS under UNSCR 1267 without delay and consider imposing TFS at the national level. - Designate a national authority for maintaining a dedicated NPO register and monitor NPOs for TF risks; apply risk-based measures and undertake appropriate supervision. - Reinforce efforts in relation to the collection of statistics, particularly through the establishment of the national AML/CFT/CPF statistics service. ### Effectiveness and compliance ratings (as presented) - Effectiveness level ratings (high, substantial, moderate, or low): - IO.1 – Risk, policy, and coordination: Moderate - IO.2 – International cooperation: Low - IO.3 – Supervision: Low - IO.4 – Preventive measures: Low - IO.5 – Legal persons and arrangements: Low - IO.6 – Financial intelligence: Low - IO.7 – ML investigation and prosecution: Moderate - IO.8 – Confiscation: Moderate - IO.9 – TF investigation and prosecution: Low - IO.10 – TF preventive measures and financial sanctions: Low - IO.11 – PF financial sanctions: Low - Level of Technical Compliance (C—Compliant, LC—Largely Compliant, PC—Partially Compliant, NC—Non-Compliant): - R.1 – Assessing risks and applying and risk-based approach: PC - R.2 – National cooperation and coordination: PC - R.3 – Money laundering offense: LC - R.4 – Confiscation and provisional measures: PC - R.5 – Terrorist financing offense: PC - R.6 – Targeted financial sanctions related to terrorism & terrorist financing: NC - R.7 – Targeted financial sanctions related to proliferation: NC - R.8 – Non-profit organizations: NC - R.9 – Financial institution secrecy laws: LC - R.10 – Customer due diligence: PC - R.11 – Record-keeping: PC - R.12 – Politically exposed persons: PC - R.13 – Correspondent banking: LC - R.14 – Money or value transfer services: PC - R.15 – New technologies: NC - R.16 – Wire transfers: PC - R.17 – Reliance on third parties: NC - R.18 – Internal controls and foreign branches and subsidiaries: PC - R.19 – Higher-risk countries: PC - R.20 – Reporting of suspicious transactions: PC - R.21 – Tipping-off and confidentiality: LC - R.22 – DNFBPs: customer due diligence: PC - R.23 – DNFBPs: other measures: PC - R.24 – Transparency and beneficial ownership of legal persons: PC - R.25 – Transparency and beneficial ownership of legal arrangements: PC - R.26 – Regulation and supervision of financial institutions: PC - R.27 – Powers of supervisors: PC - R.28 – Regulation and supervision of DNFBPs: PC - R.29 – Financial intelligence units: NC - R.30 – Responsibilities of law enforcement and investigative authorities: PC - R.31 – Powers of law enforcement and investigative authorities: PC - R.32 – Cash couriers: LC - R.33 – Statistics: PC - R.34 – Guidance and feedback: PC - R.35 – Sanctions: PC - R.36 – International instruments: PC - R.37 – Mutual legal assistance: LC - R.38 – Mutual legal assistance: freezing and confiscation: PC - R.39 – Extradition: LC - R.40 – Other forms of international cooperation: PC *Source: IMF country assessment content unit 1civea2023003 (extracted chapter text).* --- _Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1civea2023003.pdf_