FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF 40 + 9 Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Burkina Faso is on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement - 25 June 2021
In February 2021, Burkina Faso made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. Since the completion of its MER in 2019, Burkina Faso has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including by adopting a national AML/CFT strategy in December 2020. Burkina Faso will work to implement its action plan, including by: (1) adopting and implementing follow-up mechanisms for monitoring actions in the national strategy; (2) seeking MLA and other forms of international cooperation in line with its risk profile; (3) strengthening of resource capacities of all AML/CFT supervisory authorities and implementing risk based supervision of FIs and DNFBPs; (4) maintaining comprehensive and updated basic and beneficial ownership information and strengthening the system of sanctions for violations of transparency obligations; (5) increasing the diversity of STR reporting; (6) enhancing FIU’s human resources through additional hiring, training and budget; (7) conduct training for LEAs, prosecutors and other relevant authorities; (8) demonstrating that authorities are pursuing confiscation as a policy objective; (9) enhancing capacity and support for LEAs and prosecutorial authorities involved in combatting TF, in line with the TF National Strategy; and (10) implementing an effective targeted financial sanctions regime related to terrorist financing and proliferation financing as well as risk-based monitoring and supervision of NPOs.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Burkina Faso was undertaken in 2019. According to that Evaluation, Burkina Faso was deemed Compliant for 9 and Largely Compliant for 19 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.
US Department of State Money Laundering assessment (INCSR)
Burkina Faso was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
Burkina Faso is not a regional financial center. Its economy is primarily cash-based, and most economic activity takes place in the informal sector. Only an estimated 13 percent of the population had bank accounts as of 2015. Burkina Faso lacks the resources necessary to monitor adequately the movement of goods and people across its porous borders. Narcotics trafficking, smuggling, contraband sales, and black market currency transfers occur within the country.
Corruption, a lack of resources, and overburdened and weak judicial and law enforcement systems are major challenges to the government’s ability to counter these activities. Burkina Faso continues to struggle with corruption in its customs service and, to a lesser degree, in the National Police, increasing the country’s vulnerability to smuggling and money laundering.
Following the abrupt resignation of former President Blaise Compaore in October 2014 due to a popular uprising, the country was under a transitional government until elections were held in November 2015. This hampered administrative and judicial functions. It also has increased the country’s susceptibility to illicit activities, including smuggling and money laundering.
While there is no significant domestic market for illicit or smuggled goods in Burkina Faso, there is evidence that goods have been smuggled across the country’s borders and through the airport in Ouagadougou, specifically narcotics, cigarettes, and endangered animal species. Those involved in smuggling are generally not producers, organizers, or financiers; they are generally low-level couriers serving criminal and trafficking networks based in neighboring countries.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 40
World Governance Indicator – Control of Corruption 50
Corruption is a widespread problem in Burkina Faso and presents business operating or planning to invest in the country with very high risks. Corruption is pervasive in all sectors of the economy and government. Burkina Faso belongs to the category of the world's poorest and least developed countries, and is largely dependent on foreign donors for its economic development. The latter factor has thus pushed the government to pass new anti-corruption legislation in 2015, further broadening the anti-corruption legal framework of the country. Active and passive bribery, abuse of office, embezzlement and other forms of corruption are criminalized under the Penal Code. However, weak enforcement of these laws, coupled with poor access to information, a culture of impunity, weak institutions, have made the fight against corruption all the more difficult. Gifts and facilitation payments are forbidden practices in Burkina Faso. For further information - GAN Integrity Business Anti-Corruption Portal
Burkina Faso is a poor, landlocked country that depends on adequate rainfall. About 80% of the population is engaged in subsistence farming and cotton is the main cash crop. The country has few natural resources and a weak industrial base.
Cotton and gold are Burkina Faso’s key exports - gold has accounted for about three-quarters of the country’s total export revenues. Burkina Faso’s economic growth and revenue depends on global prices for the two commodities. The Burkinabe economy experienced high levels of growth over the last few years, and the country has seen an upswing in gold exploration, production, and exports.
Burkina Faso experienced a number of public protests over the high cost of living, corruption, and other socioeconomic issues in 2013, while the fall of the COMPAORE government in 2014 and failed coup in September 2015 disrupted economic activity and strained government finances. A new three-year IMF program was approved in 2013 to focus on improving the quality of public investment and ensuring inclusive growth. Political insecurity in neighboring Mali, unreliable energy supplies, and poor transportation links pose long-term challenges.
Agriculture - products:
cotton, peanuts, shea nuts, sesame, sorghum, millet, corn, rice; livestock
cotton lint, beverages, agricultural processing, soap, cigarettes, textiles, gold
Exports - commodities:
gold, cotton, livestock
Exports - partners:
Switzerland 53.3%, India 14.5% (2015)
Imports - commodities:
capital goods, foodstuffs, petroleum
Imports - partners:
Cote d’Ivoire 23.1%, France 11.1%, Togo 7.5%, China 4.8%, Ghana 4.6% (2015)
Investment Climate - US State Department
Burkina Faso welcomes foreign investment and actively seeks to attract foreign partners to aid in its development. It has partially put in place the legal and regulatory framework necessary to ensure that foreign investors are treated fairly, including by setting up a venue for commercial disputes and streamlining the issuance of permits and company registration documents. More progress is needed on diminishing the influence of state-owned firms in certain sectors and enforcing intellectual property protections. Burkina Faso ranked 76 out of 168 countries in Transparency International’s 2015 Corruption Index.
The gold mining industry has boomed in the last seven years, and the bulk of foreign investment is in the mining sector, mostly from Canadian and U.K. firms. Moroccan, Indian and UAE companies control local subsidiaries in the telecommunications industry, while foreign investors are also active in the agriculture and transport sectors. In June 2015, a new mining code was voted with the intent to standardize contract terms and better regulate the sector. The Government of Burkina Faso (GoBF) offers a range of tax breaks and incentives to lure foreign investors, including exemptions from value-added tax on certain equipment. Effective tax rates as a result are lower than the regional average, though the tax system is complex and compliance can be burdensome. Opportunities for U.S. firms also exist in the energy sector, where the government has an ambitious plan for the installation of new power capacity in both traditional and renewable sources.
Burkina Faso completed a year-long political transition process in December 2015 when President Roch Marc Christian Kabore was sworn into office, the first time a civilian president took power from another civilian president in Burkina Faso. Kabore won the November 2015 election with 53 percent of the vote, which also put his party, the People’s Movement for Progress, in the lead at the National Assembly.
Elections followed a year of political transition and instability as Burkina Faso turned the page on the 27-year rule of former President Blaise Compaore, who resigned after massive popular protests over his bid to amend the constitution and run again for a third consecutive term. Just a few weeks following his resignation, the country had adopted a transitional charter; chosen an interim president, prime minister, and legislative body; and committed to elections in late 2015. The transitional authorities also committed to advancing justice and national reconciliation, though it soon became clear that reform of the security sector was crucial. The [now former] Presidential Security Regiment, uncertain of its future, destabilized the transitional process three times throughout the following year and then attempted a coup d’état in September 2015 on the very eve of the presidential and legislative campaign. With the intervention of the regular military and advocacy of international community, the transitional government was reinstated. Though delayed, elections were peaceful, free, and transparent, as affirmed by numerous local and international observers.
Shortly after the new government took office, on January 15, 2016, Burkina Faso suffered a series of attacks—a terrorist attack on a café and hotel in downtown Ouagadougou, an attack on a gendarmerie convoy in northern Burkina Faso, and the kidnapping of two Australian nationals. The government is struggling to balance security concerns with its economic priorities, and will continue to face the twin challenges of few resources and high public expectations.
Other Useful Links