Countries/Jurisdictions of Primary Concern - Guinea-Bissau
Guinea-Bissau turned a significant corner this year after the election of a new National Assembly and of José Mario Vaz as president. Taking office in June 2014, the president appointed a government that includes strong reformers in key roles, including prime minister, ministers of Justice and Finance, Attorney General, and director of the Judicial Police. The Government of Guinea-Bissau has committed itself to a program of security, judicial, and financial reform and has sought and received assistance from international partners. Signaling its seriousness about reforming the military, the government removed and retired the military chief of staff, Antonio Indjai, for whom a U.S. arrest warrant for drug trafficking was issued in 2013. In addition, more than 200 officers and 2,000 enlisted soldiers have been dismissed.
Despite initial efforts on the part of the new Bissau-Guinean government, the conditions that led to the labeling of Guinea-Bissau as a “narco-state” persist. 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 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.
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 on April 12, 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 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. Combined with a police history of seizing only modest quantities of drugs in recent years, the 2013 arrest as well as the outstanding warrant against the then-head of the army underscore the extent of complicity with drug trafficking at the highest levels.
The formal financial sector is undeveloped, poorly supervised, and dwarfed by the size of the informal and cash sectors in addition to the underground 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.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Banks, microfinance institutions, exchange houses, securities broker/dealers and firms, insurance companies, casinos, charities, nongovernmental organizations (NGOs), lawyers, accountants, and notaries
Number of STRs received and time frame: 1: May 2013 - November 2013
Number of CTRs received and time frame: Not available
STR covered entities: Banks; microfinance institutions, exchange houses, securities firms, insurance companies, casinos, brokerages, charities, NGOs, and intermediaries such as lawyers, accountants, notaries, and broker/dealers
money laundering criminal Prosecutions/convictions:
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES
Guinea-Bissau is a member of the Inter Governmental Action Group against Money Laundering in West Africa (GIABA), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.giaba.org/reports/mutual-evaluation/Guine-Bissau.html
Enforcement and implementation issues and comments:
Guinea-Bissau is not in full compliance with international standards and accords against money laundering and terrorism financing because of inadequate resources, weak border controls, under-resourced and understaffed police, competing national priorities, and historically low political will. The formal financial sector in Guinea-Bissau is undeveloped and poorly supervised; and the financial intelligence unit (FIU) is only partially functional, in part owing to the lack of resources, analytical staff, and proper office space. Guinea-Bissau has signaled its intention to adopt regulatory measures to implement the International Convention for the Suppression of the Financing of Terrorism, but has provided no specific timeframe for doing so.
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 customer due diligence 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. There is no record of investigations, prosecutions, or convictions for the offense of money laundering. Although the law establishes asset forfeiture authorities and provides for the sharing of confiscated assets, a lack of coordination mechanisms to seize assets and facilitate requests for cooperation in freezing and confiscation from other countries may hamper cooperation.
Guinea-Bissau lacks a framework for freezing terrorist assets pursuant to UNSCRs 1267 and 1373. In 2013, the Bissau-Guinean Council of Ministers approved a bill, which was before Parliament as 2013 closed, to validate the Portuguese translation of WAEMU Regulation 14 on the freezing of assets; approved a decree to designate the Ministry of Finance as the competent authority for the freezing of assets, although as 2013 closed it was still awaiting presidential signature; and agreed to designate the Ministries of Finance, Justice, the Interior, and Foreign Affairs as the Inter-Ministerial Committee on Asset Freezing. The current status of these proposed actions is unknown.
Guinea-Bissau needs to implement the Anti-Money Laundering Uniform Law. Further, Guinea-Bissau needs to improve the coordination of efforts at the national, sub-regional, regional, and international levels; reform the country’s institutions; and conduct further internal investigations to gain an accurate understanding of the scale of the AML/CFT threat. Guinea-Bissau should continue to work with its bilateral and regional partners to establish and implement an effective AML/CFT regime, including by criminalizing outstanding predicate offenses to ML, criminalizing the provision of funds to an individual terrorist without the commission of a terrorist act, examining the feasibility and usefulness of a currency transaction disclosure system, establishing border controls, and developing a national system for the compilation of comprehensive statistics. Guinea-Bissau also should ensure the sectors covered under the AML law have implementing regulations and competent supervisory authorities. It should implement fully its terrorism financing law, recruit technical staff for its FIU, and ensure the FIU’s operational independence. It should work to improve the training and capacity of its police, prosecutors, and judiciary to combat crimes. Guinea-Bissau also should undertake efforts to eradicate systemic corruption.