An analysis by The Sentry has found that the Democratic Republic of the Congo’s (DRC) efforts to counter money laundering and terrorist financing are inadequate. What is known as the AML/CFT (anti-money laundering and countering the financing of terrorism) regime lags behind international standards, providing a window for kleptocrats and terrorists to utilize the DRC’s banking system to profit from corruption and launder the proceeds of that corruption. Left unresolved, these deficiencies potentially empower criminals, corrupt officials, and terrorists, and threaten the integrity of the international financial system.
An analysis by The Sentry has found that the Democratic Republic of the Congo’s (DRC) efforts to counter money laundering and terrorist financing are inadequate.
A comparison of the laws and policies in place in the DRC and the recommendations set forth by the Financial Action Task Force (FATF) shows the DRC has taken some positive steps, but that critical gaps remain in the structure of the country’s legal framework, and existing laws are insufficiently implemented.* To address this challenge, and in light of a planned review by the regional FATF affiliate, the DRC government should conduct an AML/CFT risk assessment and address the gaps in its legal framework. The money laundering risk within the DRC—particularly because of the economy’s reliance on cash—should encourage stronger AML policies within the financial sector. To address these risks, the government should pass laws prohibiting banks from opening anonymous accounts and encourage banks to enact stricter controls on accounts managed by politically exposed persons (PEPs). Global correspondent banks should also engage with and, as needed, pressure Congolese banks to improve customer due diligence (CDD) practices. Additionally, the government should work to empower the financial intelligence unit (FIU) to investigate corrupt activities and strengthen law enforcement agencies and the court system to prosecute corrupt actors and companies.
If international standards are not met and effectively implemented, the FATF and its regional affiliates will expose the shortfalls and risks to the international system through the mutual evaluation process, which should incentivize the DRC to alter its conduct. Failure to address the shortfalls and risks could hinder foreign investment and make it more difficult for Congolese banks to operate internationally. Financial institutions, meanwhile, can enact stricter controls and monitoring on accounts, particularly accounts held by PEPs. Finally, the U.S. government should continue to pressure the DRC government through a combination of network-focused sanctions—using both the DRC and Global Magnitsky sanctions programs to target key actors, their business partners, and companies—as well as focused and creative uses of AML measures. The U.S. and other governments should also encourage the DRC government to strengthen its implementation of existing AML laws and pass additional laws to meet FATF recommendations.
Recent actions by the DRC government suggest there is an effort to improve its AML/CFT regime, and this paper is framed to help identify where shortfalls in the regime—in both legal framework and implementation of existing laws—can be found.*