Countries/Jurisdictions of Primary Concern - Guinea-Bissau
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.
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: Not available
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, 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/Guinea-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, owing in part to the lack of resources, analytical staff, and technical equipment, among many other issues.
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 has established an inter-ministerial committee to review administrative freezing decisions. Guinea-Bissau has a legal framework for freezing terrorist assets pursuant to UNSCRs 1267 and 1373, but there appear to be unnecessary delays in the notification and freezing process that should be eliminated.
Guinea-Bissau should domesticate and implement the Anti-Money Laundering Uniform Law, a legislative requirement for members of the West African Economic and Monetary Union (WAEMU) which was adopted in July 2015. Further, Guinea-Bissau should continue 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 money laundering/terrorist financing 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 money laundering, criminalizing the provision of funds to an individual terrorist for any purpose, examining the feasibility and usefulness of a currency transaction disclosure system, implementing its regulations on the cross-border movement of cash and bearer negotiable instruments, 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.