FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MER Recommendations
Offshore Finance Center
Corruption Index (Transparency International & W.G.I.)
Cabo Verde 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 Cabo Verde (Cape Verde) was undertaken in 2019. According to that Evaluation, Cabo Verde was deemed Compliant for 9 and Largely Compliant for 15 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Cabo Verde is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
Cabo Verde’s mid-Atlantic location and its land-to-water ratio make it vulnerable to narcotics trafficking between West Africa, the Americas, and Europe. Its financial system is primarily composed of the banking sector.
Although Cabo Verde’s AML regime has flaws, the government has revised its laws, policies, and regulations to create the tools to curb illicit financial activities. The AML framework, established in 2009, led to improved shipping container monitoring and information sharing. Cabo Verde receives international support to fight drug trafficking, money laundering, and other crimes.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 58
World Governance Indicator – Control of Corruption 80
Cabo Verde’s economy is vulnerable to external shocks and depends on development aid, foreign investment, remittances, and tourism. The economy is service-oriented with commerce, transport, tourism, and public services accounting for about three-fourths of GDP. Tourism is the mainstay of the economy and depends on conditions in the euro-zone countries. Cabo Verde annually runs a high trade deficit financed by foreign aid and remittances from its large pool of emigrants; remittances as a share of GDP are one of the highest in Sub-Saharan Africa.
Although about 40% of the population lives in rural areas, the share of food production in GDP is low. The island economy suffers from a poor natural resource base, including serious water shortages, exacerbated by cycles of long-term drought, and poor soil for growing food on several of the islands, requiring it to import most of what it consumes. The fishing potential, mostly lobster and tuna, is not fully exploited.
Economic reforms are aimed at developing the private sector and attracting foreign investment to diversify the economy and mitigate high unemployment. The government’s elevated debt levels have limited its capacity to finance any shortfalls.
Agriculture - products:
bananas, corn, beans, sweet potatoes, sugarcane, coffee, peanuts; fish
food and beverages, fish processing, shoes and garments, salt mining, ship repair
Exports - commodities:
fuel (re-exports), shoes, garments, fish, hides
Exports - partners:
Australia 83%, Spain 8.6% (2015)
Imports - commodities:
foodstuffs, industrial products, transport equipment, fuels
Imports - partners:
Portugal 29.9%, Australia 26.4%, Netherlands 11.2%, Spain 5.6%, China 5.6% (2015).
Investment Climate - US State Department
The Republic of Cabo Verde is an archipelago located in the North Atlantic Ocean 300 miles west of Senegal, off Africa's west coast. This small African nation has a population of approximately 500,000 people spread over nine inhabited islands with limited natural resources. The country's climate is extremely arid, and prolonged drought frequently affects its economy. Cabo Verde's geography, low proportion of arable land, scant rainfall, and lack of natural resources, territorial discontinuity and small population make it a high-cost economy lacking economies of scale. The economy is service-oriented, with tourism, transport, commerce, and public services accounting for more than 60 percent of GDP. Cabo Verde enjoys political stability and has a history of parliamentary democracy and economic freedom that is unusual in the region. 2016 elections were free and fair, and all governments in Cabo Verde have generally respected the human rights of its citizens. In 2008, four years after the United Nations recommendations, Cabo Verde graduated from a Least Developed Country to a Lower Middle Income Country. In May of the same year, five months after the World Trade Organization (WTO) approved the GOCV application; Cabo Verde’s National Assembly unanimously ratified the agreement and formally acceded to the WTO.
There are few regulatory barriers to foreign investment in Cabo Verde, and foreign investors receive national treatment regarding taxes, license approvals and registration, and access to foreign exchange. Foreign investment in Cabo Verde is concentrated in tourism and light manufacturing. In terms of transportation, Cabo Verde’s strategic and geographic location places the country in a position to become a regional and international shipping hub for both passengers and cargo. Nevertheless, the country remains underserved, with insufficient and inefficient maritime transportation, especially for passengers. The energy sector in Cabo Verde is undergoing important regulatory changes and attracting investment which may result in a clearer framework to promote investment opportunities in the sector.
Starting in the mid-1990s, the GOCV implemented a series of reforms that have transformed a centrally-planned economy into a market-oriented economy. The number of publicly-owned enterprises has decreased from forty in the 1990s to six as of 2015.
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