Countries/Jurisdictions of Primary Concern - Chad
Chad’s financial services sector is small and relatively underdeveloped. Chad’s economy is predominately cash-based, with relatively few transactions passing through formal financial institutions. Only five percent of the Chadian population uses formal banking services.
Despite the Government of Chad’s efforts to secure its frontiers, the country’s long, porous borders leave it vulnerable to the smuggling of goods and people across the Sahel. The market for contraband and smuggled goods varies by region. Along Chad’s southern and western borders, including Lake Chad, the contraband goods market consists largely of foodstuffs, cigarettes, oil, gold, and other household items smuggled into the country to avoid import duties. Instability in the Central African Republic (CAR) and the subsequent return of displaced Chadians and CAR refugees resulted in disruption along southern borders, which facilitated trafficking of goods between the two countries. Across Chad’s northern desert and along the Sudan/Chad border in the east, smuggled items include drugs and weapons. Drugs, mainly cannabis and cocaine, are transported via Chad and Sudan to the Arabian Peninsula.
In 2014, the increase in Boko Haram activities contributed to a lack of effective control over western borders and disrupted existing drug trafficking networks; the effect on trafficking routes through Chad is not clear. The closing of the border with Nigeria due to the ebola epidemic reduced the traffic of illegal goods from Nigeria. Chad does not have a significant domestic market for illegal drugs, although there is evidence of demand among Chadian youth for tramol or tramadol, a synthetic opiate. Counterfeit pharmaceuticals enter Chad from Nigeria and are sold by merchants in small quantities in local markets, despite a ban by the government. In April 2014, Chad’s President declared that drug trafficking and religious extremism are causing slow socioeconomic growth and development in Africa and must be addressed in a concerted manner.
Wildlife poaching in Chad and the related illicit trade in ivory and other wildlife products finance transnational criminal networks and armed rebel groups across Africa. By contrast, there is no indication that illegally smuggled household goods are related to narcotics trafficking or other illegal activities. However, the trafficking of weapons, wildlife products, and drugs may be linked to organized criminal groups, some of which have links to terrorist groups. Illicit proceeds do not appear to enter Chad’s formal financial system.
Chad’s banking system is supervised by the Bank of Central African States (BEAC), the central bank that serves six Central African countries. BEAC’s Economic Intervention Service harmonizes the regulation of currency exchanges in the six member states of the Central African Economic and Monetary Community (CEMAC). Within CEMAC, the Banking Commission of Central Africa addresses money laundering.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: http://www.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: List approach
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: Public treasury, banks, microfinance organizations, money exchange and transfer companies, casinos, notaries, real estate and travel agencies, accountants and auditors, and merchants
Number of STRs received and time frame: 5: January 1 - October 31, 2014
Number of CTRs received and time frame: Not applicable
STR covered entities: Public treasury, banks, microfinance organizations, money exchange and transfer companies, casinos, notaries, real estate and travel agencies, accountants and auditors, and merchants
money laundering criminal Prosecutions/convictions:
Prosecutions: 0 in 2014
Convictions: 0 in 2014
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Chad is a member of the Action Group against Money Laundering in Central Africa (GABAC), which is in the process of becoming a FATF-style regional body. Chad has not been subject to a mutual evaluation.
Enforcement and implementation issues and comments:
Chad’s banking sector is underdeveloped. The economy remains cash-based. Limited measures exist to detect the physical cross-border transportation of currency. A mission by the members of the Ministry of Finance and Budget’s Fraud Surveillance Office traveled to Chad’s western border with Sudan and reported that livestock trafficking to Sudan is replacing physical transportation of currency across the border to finance smuggled goods. The Fraud Surveillance Office instituted control mechanisms to track livestock crossing the border to levy export duties.
In 2014, the Government of Chad recruited 500 new rangers for the Chadian Anti-Poaching Brigade. Over one hundred of these rangers received extra training at Zakouma National Park. This training, in conjunction with Chad’s national wildlife protection efforts, has been instrumental in reducing wildlife poaching.
In 2014, Chad’s financial intelligence unit (FIU), the National Financial Investigative Agency (ANIF), joined the Egmont Group of FIUs. ANIF faces serious resource constraints. Financial intelligence reporting and analysis is limited. There are regulations requiring banks to file suspicious transaction reports (STRs) but the practice is not universal. ANIF works in collaboration with Interpol and the Chadian National Police’s drug enforcement agency. Additionally, law enforcement and customs officials require training in financial crimes investigation.
Chad is in the process of becoming a party to the UN Convention against Corruption.