FATF AML Deficiency List
US Dept of State Money Laundering assessment
Corruption Index (Transparency International & W.G.I.)
Non - Compliance with FATF MER Recommendations
World Governance Indicators (Average Score)
Senegal is on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement re AML Deficiencies - 21 October 2021
Since February 2021, Senegal made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. Senegal should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) ensuring consistent understanding of ML/TF risks (in particular related to the DNFBP sector) across relevant authorities through training and outreach; (2) seeking MLA and other forms of international cooperation in line with its risk profile; (3) ensuring that Financial Institutions and DNFBPs are subject to adequate and effective supervision; (4) updating and maintaining comprehensive beneficial ownership information on legal persons and arrangements and strengthening the system of sanctions for violations of transparency obligations; (5) continuing to enhance the FIU’s human resources to ensure that it maintains effective operational analysis capacities; (6) demonstrating that efforts aimed at strengthening detection mechanisms and reinforcing the capability to conduct ML/predicate offences investigations and prosecutions activities are sustained consistently in line with the Senegal’s risk profile; (7) establishing comprehensive and standardised policies and procedures for identifying, tracing, seizing and confiscating proceeds and instrumentalities of crime in line with its risk profile; (8) strengthening the authorities understanding of TF risks and enhancing capacity and support for LEAs and prosecutorial authorities involved in TF in line with the 2019 TF National Strategy; and (9) 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 Senegal was undertaken in 2018 (published in 2019). According to that Evaluation, Senegal was deemed Compliant for 5 and Largely Compliant for 9 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)
Senegal is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
Senegal’s strategic coastal location makes it a regional business center for Francophone West Africa. Illicit proceeds are derived from both domestic and foreign crimes.
According to the money laundering national risk assessment (NRA), Senegal is exposed to risks from organized crime, drug trafficking, internet and other fraud, and a large informal, cash-based sector. Major sources of illicit proceeds include narcotics, trafficking in persons, illegal trade in wildlife and timber, and public corruption.
Senegal has drafted an AML/CFT strategy and action plan, which address the AML/CFT framework, DNFBP reporting obligations and supervision, procedural and sanctioning mechanisms, international cooperation, and AML/CFT metrics. The government also aims to expand financial inclusion.
Open issues include training for law enforcement, prosecutors, and judges; lack of a nonconviction-based forfeiture law; awareness-raising programs for stakeholders; designation of a DNFBP supervisor; and improved legislation on the management and disposal of seized property.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 45
World Governance Indicator – Control of Corruption 59
Corruption poses moderate to high risks in most sectors in Senegal, with bribery and petty corruption being particularly common. Senegal's anti-corruption law is primarily contained in the Penal Code (in French), which criminalizes extortion, active and passive bribery, bribing foreign officials and money laundering, as well as private-to-private corruption. The legal status of facilitation payments is unclear, but they are expected when doing business. The legal status and expectations concerning gifts and hospitality is also difficult to determine. Overall, a weak judiciary hinders enforcement of legal provisions. For further information - GAN Integrity Business Anti-Corruption Portal
Senegal’s economy is driven by mining, construction, tourism, fisheries and agriculture, which is the primary source of employment in rural areas. The country's key export industries include phosphate mining, fertilizer production, agricultural products and commercial fishing and it is also working on oil exploration projects. Senegal relies heavily on donor assistance, remittances and foreign direct investment. For the first time in the past twelve years, Senegal reached a growth rate of 6.5% in 2015 due in part to a buoyant performance in agriculture because of higher rainfall and productivity in the sector.
President Macky SALL, who was elected in March 2012 under a reformist policy agenda, inherited an economy with high energy costs, a challenging business environment, and a culture of overspending. President SALL unveiled an ambitious economic plan, the Emerging Senegal Plan (ESP), which aims to implement priority economic reforms and investment projects to increase economic growth while preserving macroeconomic stability and debt sustainability. Bureaucratic bottlenecks and a challenging business climate are among the perennial challenges that may slow the implementation of this plan.
Senegal is receiving technical support from the IMF from 2015-2017 under a Policy Support Instrument (PSI) to assist with implementation of the ESP. The PSI implementation continues to be satisfactory as concluded by the IMF’s second review mission in March 2016. Investors have signalled confidence in the country through Senegal’s successful Eurobond issuances in recent years, including in 2014.
The government will focus on 19 projects under the ESP for the 2016 budget to continue the structural transformation of the economy. These 19 projects include the Thies-Touba Highway, including the new airport- Mbour-Thies Highway. Senegal will increase the national family allowances program and the community development emergency program in 2016. Electricity supply is a chief constraint for Senegal’s development. Electricity prices in Senegal are among the highest in the world. Power Africa, a program led by USAID and OPIC, plans to increase the current 500 mW of generating capacity to over 1,000 mW in the next three to five years. Recent gas discoveries on the Senegal-Mauritanian border, as well as just south of Dakar, will help alleviate some of the energy shortages.
Agriculture - products:
peanuts, millet, corn, sorghum, rice, cotton, tomatoes, green vegetables; cattle, poultry, pigs; fish
agricultural and fish processing, phosphate mining, fertilizer production, petroleum refining, zircon, and gold mining, construction materials, ship construction and repair
Exports - commodities:
fish, groundnuts (peanuts), petroleum products, phosphates, cotton
Exports - partners:
Mali 12.8%, Switzerland 9.7%, India 5.9%, Cote d’Ivoire 5.3%, China 5.1%, UAE 4.1%, France 4.1% (2015)
Imports - commodities:
food and beverages, capital goods, fuels
Imports - partners:
France 17.9%, China 10%, Nigeria 8.7%, India 5.6%, Spain 4.9%, Netherlands 4.5% (2015)
Investment Climate - US State Department
Senegal offers a stable political environment, relatively robust infrastructure, strong institutions and a favorable geographic position with growing opportunities for foreign investment. The Government of Senegal welcomes foreign investment and has prioritized efforts to improve its business climate. Senegal has maintained a stable macroeconomic environment, with its regional currency, the CFA franc, pegged to the Euro and easy repatriation of capital and income. Investors cite high factor costs, bureaucratic hurdles, limited access to financing and a rigid labor market as being among the obstacles to investment. The government is making efforts address some of these challenges, streamline bureaucratic procedures and improve Senegal’s competitiveness.
Senegal is pursuing an ambitious development plan, the “Plan Senegal Emergent” (Emerging Senegal Plan or "PSE"), which includes a series of economic reforms and increasing private investment in strategic sectors with the goal of increasing real GDP growth to an average of 7.1% from 2014 to 2018. The growth rate reached 6.5% in 2015, the highest in 12 years. The government is implementing reforms to the energy sector, higher education and the land tenure system, in order to improve Senegal’s attractiveness for foreign investment. Senegal also has ambitions to build on its position as a regional business hub with relatively good transportation links to become a regional center for logistics, services and industry. The Senegalese government is focusing on infrastructure projects to develop port facilities, transportation infrastructure and a Special Economic Zone. Senegal has joined the New Alliance for Food Security and committed to policy reforms to facilitate greater investment in agro-industry. As the government undertakes a range of investment-friendly reforms, capacity constraints and bureaucratic bottlenecks continue to impede the implementation of this agenda.
Senegal’s low ranking (153th out of 189 countries) in the 2016 World Bank Doing Business Report highlighted the bureaucratic challenges that foreign investors can face when pursuing projects in Senegal. After an even lower Doing Business ranking of 178 in 2014, Senegal was cited as a top performer in 2015 and 2016 for improving its business climate to raise its ranking. The Government of Senegal is continuing to implement a multi-year program to streamline procedures and reduce costs involved in setting up a business. The development of a Special Economic Zone is also intended to provide an easier environment for private investment.
While Senegal has a well-developed legal framework for protecting property rights, settlement of commercial disputes can be cumbersome and slow. The government of Senegal has prioritized efforts to fight corruption, increase transparency and improve governance. Senegal compares favorably with most African countries in corruption indicators, but companies report that some corruption may persist, particularly at lower levels. The U.S. and Senegal signed a Bilateral Investment Treaty in 1983 that includes provisions on non-discrimination, free transfer of funds, international legal standards for expropriation and the use of binding third-party arbitration for dispute resolution.
France is historically the largest source of foreign direct investment but the government of Senegal is keen to diversify its sources of investment. U.S. investment in Senegal has expanded since 2014 including several investments in power generation and participation of U.S. companies in offshore oil and gas exploration. Following the announcement of oil and gas discoveries in 2014-2015, energy sector investment is expected to expand during the next decade. Agriculture, agro-industry, mining, infrastructure, tourism and fisheries are among the other sectors that have attracted substantial investment.
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