Countries/Jurisdictions of Primary Concern - Sierra Leone
Sierra Leone is not a regional financial center. Loose oversight of financial institutions, weak regulations, a large seaport, pervasive corruption, and porous borders are conducive to money laundering. Sierra Leone is an attractive trans-sea shipment point for illegal drugs and other forms of illegal commerce. Smuggling of pharmaceuticals, foodstuffs, gold, and diamonds occurs across porous land borders. To date, there is little evidence drug smuggling is a significant source of laundered money. The small-scale artisanal diamond mining industry is exploited by domestic groups and individuals rather than by transnational cartels. The trade in stolen automobiles, many originating in the United States, continues to be a concern. Most financial transactions, including currency exchanges and remittances, are informal and vulnerable to money laundering. There is no indication money laundering activity in Sierra Leone is tied to the financing of terrorism.
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: NO Domestic: NO
KYC covered entities: Banks; financial leasing firms; money and currency exchanges; credit card, traveler’s check, and other financial instrument dealers; investment companies; insurance, merchant, and investment banks; and securities and commodities dealers
Number of STRs received and time frame: 7 in 2014
Number of CTRs received and time frame: 85,471 in 2014
STR covered entities: Banks; financial leasing firms; money and currency exchanges; credit card, traveler’s check, and other financial instrument dealers; investment companies; insurance, merchant, and investment banks; and securities and commodities dealers
money laundering criminal Prosecutions/convictions:
Prosecutions: 3: May - October 2013
Convictions: Not available
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Sierra Leone 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/Sierra%20Leone.html
Enforcement and implementation issues and comments:
In 2012, Sierra Leone’s Parliament enacted the Anti-Money Laundering and Combating of Financing of Terrorism Act (AMLCFTA). The AMLCFTA provides a basic legal framework for countering illicit finance in Sierra Leone, but full implementation remains a challenge because of the government’s limited resources. The Government of Sierra Leone has made progress, but needs to take further action to ensure its AML/CFT regime complies with international standards and is effectively implemented.
As part of its ongoing implementation efforts, in 2013 the Government of Sierra Leone published in the national gazette a Regulation on Terrorism Prevention (Freezing of International Terrorists’ Funds and other Related Measures). It is believed this legislation is still before Parliament.
There is a low rate of compliance throughout the financial sector, particularly among the commercial banks headquartered in Nigeria. The Bank of Sierra Leone is seeking to improve its ability to use financial intelligence to identify and monitor politically exposed persons (PEPs) and other “sensitive” people and to assist in determining suspicious transactions. The financial intelligence unit (FIU) attempts to be proactive in its efforts to ensure financial institutions are in compliance with AML/CFT laws. The FIU has the ability to impose fines, suspensions, and other actions when financial institutions are not compliant.
Inadequate resources and lack of training hamper law enforcement efforts in all arenas, including prosecutions. The Transnational Organized Crime Unit is authorized to undertake complete investigations and effect arrests, but general policing capacity and understanding of the use of financial investigations and intelligence are low. The Sierra Leone Police, National Revenue Authority, and Anti-Corruption Commission have very limited abilities to investigate money laundering crimes. The Attorney General’s Office has limited investigative and arrest powers. The lack of expertise also impedes the investigation of possible abuses related to informal finance, such as hawala networks, and possible ties between money laundering in Sierra Leone and Lebanese traders. Corruption is a related concern.
Sierra Leone became a party to the UN Convention against Transnational Organized Crime on August 12, 2014.
Sierra Leone should continue to work toward full and consistent implementation of the AMLCFTA. It should bolster its efforts to counter smuggling, tighten border controls, and adequately supervise those sectors most vulnerable to money laundering. It should fully operationalize its FIU; provide training for FIU staff; institute effective supervision of both designated non-financial businesses and professions and non-profit organizations; work to ensure foreign exchange dealers implement customer due diligence measures and comply with record-keeping requirements; criminalize the financing of terrorism for any purpose, i.e., regardless of a link to the planning or commission of a terrorist act; and establish procedures and mechanisms to implement UNSCRs 1267 and 1373.