SIERRA LEONE
Summary
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Sanctions

None

FAFT AML Deficient

No

Higher Risk Areas

 

Compliance with FATF 40 + 9 Recommendations

Weakness in Government Legislation to combat Money Laundering

Not on EU White list equivalent jurisdictions

Corruption Index (Transparency International & W.G.I.)

World Governance Indicators (Average Score)

Failed States Index (Political Issues)(Average Score)

Medium Risk Areas

US Dept of State Money Laundering assessment

Weakness in Government Legislation to combat Money Laundering

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Sierra Leone is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Sierra Leone was undertaken by the Financial Action Task Force (FATF) in 2007. According to that Evaluation, Sierra Leone was deemed Compliant for 2 and Largely Compliant for 1 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.

 

Public statement GIABA’s Enhanced Follow-Up Process in respect of Sierra Leone

November 29, 2011 - The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has since 2007 been concerned about the identified significant weaknesses in the anti money laundering/combating the financing of terrorism (AML/CFT) regime of the Republic of Sierra Leone.

At its 16th Technical Commission/Plenary (TC/Plenary) meeting held in Lome, Togo from 14-16 November, 2011, GIABA noted that the passage of the draft AML/CFT Bill of Sierra Leone had been pending since April 2009. Even after the assistance by GIABA, the World Bank and UNODC in the revision of the draft Bill to ensure that the legislation is comprehensive, and that it meets international AML/CFT standards, Sierra Leone is yet to pass the bill into law, and as such, the weaknesses identified persist in the Sierra Leone’s AML/CFT regime. The TC/Plenary noted further that a considerable number of actions required to be taken to rectify the deficiencies are dependent on the enactment of the AML/CFT bill. In addition, Sierra Leone has not operationalised its approved National AML/CFT Strategy designed to facilitate the implementation of the AML/CFT regime in a coordinated and concerted manner. GIABA calls upon Sierra Leone to pass this draft AML/CFT Bill into law before April 30, 2012, and urgently to implement satisfactory and comprehensive AML/CFT regime.

GIABA also calls on the Authority of Heads of State and Government of the Economic Community of West African States (ECOWAS) to prevail on Sierra Leone to address the identified deficiencies in its AML/CFT system as the continued non- compliance poses serious threat to the integrity and soundness of the regional and global financial system. November 29, 2011 - The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) has since 2007 been concerned about the identified significant weaknesses in the anti money laundering/combating the financing of terrorism (AML/CFT) regime of the Republic of Sierra Leone.

 

US Department of State Money Laundering assessment (INCSR)

Sierra Leone was deemed a Jurisdiction of Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Sierra Leone is not a regional financial center. Loose oversight of financial institutions, weak regulations, pervasive corruption, and lack of financial crimes enforcement has made the country vulnerable to money laundering. Due in part to its large seaport, 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. 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 unregulated and vulnerable to money laundering. There is no indication money laundering activity in Sierra Leone is tied to the financing of terrorism. After making limited progress in this area in 2014, Sierra Leone shifted its attention and resources in 2015 almost entirely to ending the Ebola outbreak. As a result, the country’s AML/CFT controls remain underdeveloped and underfunded.

 

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SANCTIONS

There are no international sanctions currently in force against this country.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

30

World Governance Indicator – Control of Corruption

21

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

Sierra Leone is located on the southwest corner of West Africa. It is home to six million people and provides easy access to a market of 30 million via its membership in the Mano River Union (MRU) with Cote d’Ivoire, Guinea, and Liberia, and a market of over 225 million people in Economic Community of West African States (ECOWAS). Sierra Leone provides duty-free access to large markets like the European Union and United States under treaties such as the EU Everything But Arms initiative and U.S. African Growth and Opportunity Act (AGOA).

Sierra Leone’s gross domestic product (GDP) in 2012 is $ 3.8 billion The World Bank estimates gross national income (GNI) per capita for Sierra Leone was $580 in 2012. This translates to over 72 percent of the population living on less than $1 per day, in extreme poverty.

Sierra Leone remains largely dependent on foreign aid even though they have large deposits of iron ore and other minerals.

The United Nations Development Program, Human Development Index for 2012, which incorporates dimensions of health, education, and living standards, ranks Sierra Leone 177 of the 186 nations assessed. Sierra Leone continues to face challenges in improving its investment climate. The World Bank ranked Sierra Leone 140 among 183 countries in its 2013 Doing Business report. Yet, among the subcategories in the report, Sierra Leone ranks 32nd globally in protecting investors, 76th in ease of starting a business, and 83rd in getting credit. The World Bank reported that Sierra Leone requires on average six independent procedures and 12 days starting a business, somewhat above the average in Sub-Saharan Africa.

There is reason for optimism regarding economic growth. Despite tough economic times, the International Monetary Fund (IMF) estimated that the inflation rate has dropped from 18.5% in 2011 to 11.5% in 2012. The IMF report also shows that Sierra Leone’s real GDP grew from 5.3% in 2011 to 35.9% in 2012. The increase in GDP growth in 2012 is due in large part to the production of large scale iron ore export projects that came on line in 2012 which contributed to the higher than normal GDP growth rate.

Support for Foreign Direct Investment (FDI) is a stated priority for the Government. Investment is increasing and the government has demonstrated commitment to reforming trade and investment policies to encourage private sector-led economic revitalization. President Koroma routinely states that the nation’s economic growth “should be, and indeed, will be driven by the private sector rather than solely through public sector activities and development assistance.”

 

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FURTHER REPORTS

Important structural factors continue to hinder competitiveness despite some progress in recent years. Sierra Leone improved its position on the Ease of Doing Business indicators, and its ranking in 2013 advanced by ten places (Figure 9). However, further structural reforms are needed to address key structural factors contributing to high transactions costs in Sierra Leone, including inadequate infrastructure, limited availability of skilled labor force, insufficient energy supply and high transportation and communication costs. Therefore, staff welcomed the authorities’ resolve to accelerate structural reforms to address these impediments to private sector development. It also encouraged them to strengthen the framework for Anti-Money Laundering and Financing of Terrorism (AML/CFT), notably through the setting up of an independent Financial Intelligence Unit in line with recommendations from the Intergovernmental Action Group against Money Laundering in West Africa.

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