FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF MER Recommendations
Offshore Financial Center
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Weakness in Government Legislation to combat Money Laundering
Liberia 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 Liberia was undertaken by the Financial Action Task Force (FATF) in 2011. According to that Evaluation, Liberia was deemed Compliant for 0 and Largely Compliant for 0 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.
US Department of State Money Laundering assessment (INCSR)
Liberia is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
The Government of Liberia has made efforts to strengthen its AML regime, but significant challenges remain.
The Central Bank of Liberia (CBL) does not robustly enforce AML requirements. Interagency coordination has improved, but key stakeholders have not produced actionable financial intelligence, conducted systematic financial investigations, or secured financial crimes convictions. Financial institutions have limited capacity to detect money laundering, and their financial controls remain weak. Liberia’s FIU is under-funded and has experienced recurring budget cuts. The FIU also lacks the equipment and institutional and technical capacity to adequately collect, analyze, and disseminate financial intelligence. Liberia remains a cash-based economy with weak border controls and endemic corruption, leaving the country vulnerable to illicit activities.
The government should enhance CBL oversight authority and consistently provide adequate resources to the FIU. Liberia should continue to work with international partners to ensure its AML laws, regulations, and policies meet international standards.
No – sanctions lifted in 2016.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 28
World Governance Indicator – Control of Corruption 19
Liberia is a low income country that relies heavily on foreign assistance. It is richly endowed with water, mineral resources, forests, and a climate favourable to agriculture. Its principal exports are iron ore, rubber, gold and timber. The government has attempted to revive raw timber extraction and is encouraging oil exploration.
In the 1990s and early 2000s, civil war and government mismanagement destroyed much of Liberia's economy, especially infrastructure in and around the capital. With the conclusion of fighting and the installation of a democratically elected government in 2006, businesses that had fled the country began to return. The country achieved high growth during 2010-13 due to favourable world prices for its commodities. However, in 2014 as the Ebola virus began to spread, the economy declined and many businesses departed, taking capital and expertise with them. The epidemic forced the government to divert scarce resources to combat the spread of the virus, reducing funds available for needed public investment. The cost of addressing the Ebola epidemic will weigh heavily on public finances at the same time decreased economic activity reduces government revenue, although higher donor support will partly offset this loss.
Revitalizing the economy in the future will depend on increasing investment and trade, higher global commodity prices, sustained foreign aid and remittances, development of infrastructure and institutions, and maintaining political stability and security.
Agriculture - products:
rubber, coffee, cocoa, rice, cassava (manioc, tapioca), palm oil, sugarcane, bananas; sheep, goats; timber
mining (iron ore), rubber processing, palm oil processing, timber, diamonds
Exports - commodities:
rubber, timber, iron, diamonds, cocoa, coffee
Exports - partners:
Poland 32.9%, China 20.7%, India 9.3%, US 5.1%, Greece 4.7%, France 4.3% (2015)
Imports - commodities:
fuels, chemicals, machinery, transportation equipment, manufactured goods; foodstuffs
Imports - partners:
Singapore 28.7%, China 16%, South Korea 15.3%, Japan 10.3%, Philippines 6.6% (2015)
Investment Climate - US State Department
Liberia is located in West Africa and has a population of about 4 million people (2008 Census). The Government of Liberia (GOL) continues to prioritize foreign direct investment (FDI) to realize its economic development goals. The GOL is working with its international partners to secure funding that would cover a gap of $812 million to implement the interventions contained within its 2015-2017 Economic Stabilization & Recovery Plan (ESRP. The ESRP focuses on recovering output and growth, increasing resilience and reducing vulnerability, and strengthening public finances and service delivery disrupted by the Ebola crisis.
However, the availability of resources to adequately deliver on the GOL’s development plans remains a challenge. Inflow of FDI is critical given Liberia’s difficult macroeconomic outlook, coupled with the underperformance of its natural resources sector, which has resulted in an estimated revenue loss of $70 million during the financial year (FY) 2015-2016 period. The current administration recognizes that attracting FDI requires an enabling legal and regulatory environment and is open to resolving issues that hinder improvements to the investment climate.
Though Liberia has a limited domestic market, it provides numerous investment opportunities across various sectors including; agriculture, forestry, fisheries, mining, telecommunications, services sector, , manufacturing, and warehousing and storage facilities. The United States, China, Europe, and other African countries are the main export destinations. A cabinet level Inter-Ministerial Concessions Committee (IMCC), chaired by the National Investment Commission (NIC), is responsible for negotiating concession agreements, which are ratified and approved by the national legislature and the president respectively. Currently, the export sector relies heavily on rubber and iron ore, accounting for 71 percent of total exports in 2015 (Central Bank of Liberia, 2015 Report).
Business registration statistics from 2015 indicate that the Liberia Business Registry (LBR) registered 7,110 businesses, of which 6,437 were local businesses and 673 were foreign owned businesses, including locally incorporated and registered businesses owned by non-Liberian citizens. The LBR is a one-stop business registration center that handles all business registration processes within three to four business days. Liberia has several state-owned enterprises (SOEs), some of which perform regulatory functions for their sectors, while others are dysfunctional. The SOE sector is critical to the GOL’s economic development agenda, and their operational management is governed by the Public Financial Management (PFM) Law of 2009.
The followings are the key sectors which have historically attracted significant FDI in Liberia:
Agriculture including forestry
Services including hotels and restaurants
Banking and financial services
The following are the best prospective sectors for U.S. investment in Liberia:
Agribusiness (marketing of agriculture products)
Manufacturing (food processing and packaging)
Transportation, storage, and warehousing facilities
Energy and power generation
Construction and real estate
Telecommunications (especially fast-speed internet services)
Liberia offers investors a business-enabling environment with attributes such as:
A free-floating exchange rate regime and guarantees that investors can transfer profits out of Liberia
Investment laws that protect investors against expropriation and nationalization
Comparatively more public awareness of incidences of corru
ption and government willingness to fight such corruption
Current market challenges include the following:
Difficult and opaque procedures to obtain clear title to property
Lack of protection and awareness regarding intellectual property rights, including artistic works, pharmaceutical products, and computer software.
Lengthy and complex process to register a business or conclude concession agreements, requiring compliance with regulations and procedures of various government agencies.
Weak judicial institutions and judicial sector corruption.
Overall, the government seeks to establish an investment climate that is welcoming to foreign investment as it continues to push forward with business reform programs. As Liberia transitions to a middle income country, the GOL’s determination to improve the investment climate will be critical to overall economic growth.
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