FATF AML Deficiency List
Non - Compliance with FATF 40 + 9 Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Weakness in Government Legislation to combat Money Laundering
Gabon 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 Gabon was undertaken in 2013. According to that Evaluation, Gabon was deemed Compliant for 0 and Largely Compliant for 4 of the FATF 40 + 9 Recommendations.
US Department of State Money Laundering assessment (INCSR)
Gabon 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: -
Gabon is not a regional financial center. Gabon suffers from porous borders and smuggling, facilitated by organized criminal groups. Despite fiscal management reform efforts, systemic corruption persists. The embezzlement of state funds, including by politically exposed persons (PEPs), reportedly gives rise to money laundering. There is a large expatriate community in Gabon engaged in the oil and gas sector, the timber industry, construction, and general trade.
Money or value transfer services, such as hawala, are often used by those expatriates, particularly the large Lebanese community, to avoid strict controls on the repatriation of corporate profits.
The Bank of Central African States (BEAC), based in Cameroon, is a regional central bank that serves six Central African countries and supervises Gabon’s banking system. BEAC’s Economic Intervention Service harmonizes the regulation of currency exchanges in the member states of the Central African Economic and Monetary Community.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 30
World Governance Indicator – Control of Corruption 18
Corruption in Gabon presents an obstacle for companies operating or planning to invest in the country. President Ali Bongo's government has engaged in curbing corruption, and breaking with patterns of patronage, clientelism and systemic corruption, which flourished under the former regime of Omar Bongo. Some successes have been recorded; nonetheless, some corruption investigations have been politically motivated. Corruption is still rampant in several sector of the economy, particularly with public procurement in the extractive industries. The Gabonese government has set up a strong anti-corruption legal framework, which mainly consists of the Penal Code (in French), under which passive and active bribery, gifts, embezzlement and other corruption offences are criminalized in the public sector. Enforcement has been moderate and bribery is a widespread practice. For further information - GAN Integrity Business Anti-Corruption Portal
Gabon enjoys a per capita income four times that of most sub-Saharan African nations, but because of high income inequality, a large proportion of the population remains poor. Gabon relied on timber and manganese exports until oil was discovered offshore in the early 1970s. From 2010 to 2014, oil accounted for approximately 80% of Gabon’s exports, 45% of its GDP, and 60% of its state budget revenues.
Gabon faces fluctuating prices for its oil, timber, and manganese exports. A rebound of oil prices from 2001 to 2013 helped growth, but declining production, as some fields passed their peak production, has hampered Gabon from fully realizing potential gains. GDP grew nearly 6% per year over the 2010-14 period, but slowed significantly in 2015 as oil prices declined. Low oil prices also weakened government revenue and negatively affected the trade and current account balances.
Despite an abundance of natural wealth, poor fiscal management and over-reliance on oil has stifled the economy. There are frequent power cuts and water shortages. However, President BONGO has made efforts to increase transparency and is taking steps to make Gabon a more attractive investment destination to diversify the economy. BONGO has attempted to boost growth by increasing government investment in human resources and infrastructure.
Agriculture - products:
cocoa, coffee, sugar, palm oil, rubber; cattle; okoume (a tropical softwood); fish
petroleum extraction and refining; manganese, gold; chemicals, ship repair, food and beverages, textiles, lumbering and plywood, cement
Exports - commodities:
crude oil, timber, manganese, uranium
Exports - partners:
China 15.5%, Italy 7.3%, Trinidad and Tobago 7.2%, Australia 7%, Spain 6.3%, South Korea 5.4%, Netherlands 5%, US 4.7% (2015)
Imports - commodities:
machinery and equipment, foodstuffs, chemicals, construction materials
Imports - partners:
China 21.4%, France 19.6%, US 6.6%, Benin 4.7%, Netherlands 4% (2015)
Investment Climate - US State department
Gabon is a historically stable country located in a volatile region of the world and has significant economic advantages: a small population (roughly 1.8 million) with many well-educated elites, an abundance of natural resources, and a strategic location along the Gulf of Guinea. After taking office in 2009, President Ali Bongo Ondimba introduced reforms to diversify Gabon’s economy away from oil and from traditional investment partners (mainly France), and to position Gabon as an emerging economy. In his Emergent Gabon strategic plan, he laid out a vision for sustainable development by 2025 through creating domestic industrial capacity to process primary materials and by becoming a regional leader in service industries including financial services, ICT, education, and healthcare. Gabon is also promoting foreign investment across a range of sectors, particularly in the oil and gas, infrastructure, timber, ecotourism, and mining sectors. Despite these efforts, Gabon’s economy remains dependent on revenue generated by the exportation of hydrocarbons. Gabon’s commercial ties with France remain very strong, but the government continues to seek to diversify its sources by courting investors from the rest of the world.
Although Gabon is taking steps towards making the country a more attractive destination for foreign investment, it remains a difficult place to do business. Foreign firms are active in the country, particularly in the extractive industries, but the difficulty involved in establishing a new business and the time it takes many new entrants to finalize deals are impediments to increased U.S. private sector investment. Although the Gabonese government is taking a more active role to ensure transparency in extractive industries, investors are still waiting for key reforms to be established in law and in practice. Gabon finalized new hydrocarbon and mining codes in 2014 and 2015. A Special Economic Zone located at Nkok began operations in September 2014. Gabon is making progress towards rejoining the Extractive Industries Transparency Initiative (EITI) after it failed to submit reports required to continue along the path to membership in 2013. In 2015, Gabon approved an action plan to renew its membership and appointed a president of the group that will implement the plan. Increased investment is constrained due to limited bureaucratic capacity, unclear lines of decision-making authority, a lack of a clearly-established and consistent process for companies to enter the market, lengthy bureaucratic delays, high production costs, a small domestic market, rigid labor laws, limited and poor infrastructure, a cumbersome judicial system, and inconsistent application of customs regulations.
Economic conditions in Gabon weakened throughout 2015 and into 2016 as the government adjusted its budget to account for the steep drop in oil prices. Many international companies, including U.S. firms, continue to have difficulties collecting timely payments from the Gabonese government and some companies in the oil sector are closing down operations. Since January 2016 an estimated 900 jobs have been lost in the oil and gas sector. While opportunities exist, the investment climate in Gabon will remain difficult until after the presidential election in August 2016 and the government resolves its budgetary problems.
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