BENIN MAY 2010 - GIABA
BENIN MAY 2010 - GIABA
BENIN MAY 2010 - GIABA
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INTER-GOVERNMENTAL ACTION GROUP AGAINST<br />
MONEY LAUNDERING IN WEST AFRICA<br />
Mutual Evaluation Report<br />
Anti-Money Laundering and Combating<br />
the Financing of Terrorism<br />
<strong>BENIN</strong><br />
<strong>MAY</strong> <strong>2010</strong><br />
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Benin is a member of the <strong>GIABA</strong>. This evaluation was conducted by <strong>GIABA</strong> and was then<br />
discussed before adopted by its Plenary in May 4, <strong>2010</strong>.<br />
2
© <strong>2010</strong> <strong>GIABA</strong>. All rights reserved.<br />
No reproduction or translation of this publication may be made without prior written permission.<br />
Requests for permission to further disseminate, reproduce or translate all or part of this publication should<br />
be obtained from <strong>GIABA</strong>, Complexe Sicap Point E Av Chiekh A. Diop, X Canal IV 1er Etage Immeuble A,<br />
BP 32400, Ponty Dakar (Senegal). E-mail: secretariat@giaba.org<br />
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TABLE OF CONTENTS<br />
INTRODUCTION .......................................................................................................................... 10<br />
GENERAL INFORMATION ........................................................................................................ 19<br />
1.1 GENERAL INFORMATION ON THE COUNTRY AND ITS ECONOMY ..................... 19<br />
1.2 GENERAL SITUATION REGARDING MONEY LAUNDERING AND FINANCING<br />
OF TERRORISM ........................................................................................................................... 25<br />
1.3 OVERVIEW OF THE FINANCIAL SECTOR .................................................................. 26<br />
1.4 OVERVIEW OF THE DESIGNATED NON-FINANCIAL BUSINESSES AND<br />
PROFESSIONS (DNFBP) SECTOR ............................................................................................. 34<br />
1.5 OVERVIEW OF COMMERCIAL LAWS AND MECHANISMS APPPLICABLE TO<br />
LEGAL PERSONS AND ARRANGEMENTS ............................................................................. 35<br />
1.6 OVERVIEW OF THE STRATEGY TO PREVENT MONEY LAUNDERING AND THE<br />
FINANCING OF TERRORISM .................................................................................................... 36<br />
2. LEGAL SYSTEM AND RELATED INSTITUTIONAL MEASURES ..................................... 48<br />
2.1 CRIMINALIZATION OF MONEY LAUNDERING (R.1 & 2) ......................................... 48<br />
2.2 CRIMINALIZATION OF THE FINANCING OF TERRORISM (SR.II) .......................... 59<br />
2.3 CONFISCATION, FREEZING AND SEIZURE OF THE PROCEEDS OF CRIME ......... 60<br />
2.4 FREEZING ASSETS USED TO FINANCE TERRORISM (SR.III) .................................. 65<br />
2.5 THE FINANCIAL INTELLIGENCE UNIT AND ITS FUNCTIONS (R.26, 30 & 32) ..... 68<br />
2.6 AUTHORITIES CHARGÉD WITH INVESTIFGATIONS, CRIMINAL PROSECUTION<br />
AUTHORITIES AND OTHER COMPETENT AUTHORITIES – FRAMEWORK FOR THE<br />
INVESTIGATION AND PROSECUTION OF THE OFFENCE AND THAT OF<br />
CONFISCATION AND FREEZING (R.27, 28, 30 & 32) ............................................................ 77<br />
2.7 DECLARATION OR DISCLOSURE OF CROSS-BORDER TRANSACTIONS (SR.IX)82<br />
3. PREVENTIVE MEASURES – FINANCIAL INSTITUTIONS (DUTY OF CUSTOMER DUE<br />
DILIGENCE AND KEEPING OF DOCUMENTS) ...................................................................... 86<br />
3.1 RISK OF MONEY LAUNDERING OR FINANCING OF TERRORISM ......................... 86<br />
3.2 OBLIGATION OF CUSTOMER DUE DILIGENCE, INCLUDING ENHANCED OR<br />
REDUCED IDENTIFICATION MEASURES (R.5 TO 8) ........................................................... 87<br />
3.3 RELIANCE ON THIRD PARTIES AND OTHER INTERMEDIARIES (- R.9) ............. 103<br />
3.4 PROFESSIONAL SECRECY OR CONFIDENTIALITY OF FINANCIAL<br />
INSTITUTIONS (R.4) ................................................................................................................. 105<br />
3.5 RECORD KEEPING AND RULES APPLICABLE TO ELECTRONIC FUNDS<br />
TRANSFERS (R.10 & SR.VII) ................................................................................................... 107<br />
3.6 MONITORING OF TRANSACTIONS AND RELATIONSHIPS (R.11 & 21) ............... 112<br />
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3.7 SUSPICIOUS TRANSACTION REPORTS AND OTHER REPORTING (R.13-14, 19, 25<br />
& SR.IV) .................................................................................................................................... 115<br />
3.8 INTERNAL CONTROLS, COMPLIANCE AND FOREIGN BRANCHES (R.15 & 22) 124<br />
3.9 SHELL BANKS (R.18) ..................................................................................................... 129<br />
3.10 THE SUPERVISORY AND OVERSIGHT SYSTEM - COMPETENT AUTHORITIES<br />
AND SROS, ROLES, FUNCTIONS, DUTIES, POWERS (INCLUDING SANCTIONS) (R.17,<br />
23, 25, 29, 30 &32) ...................................................................................................................... 130<br />
3.11 MONEY OR VALUE TRANSFER SERVICES (RS.VI) .................................................. 149<br />
4. PREVENTIVE MEASURES – DESIGNATED NON-FINANCIAL BUSINESSES AND<br />
PROFESSIONS ............................................................................................................................ 151<br />
4.1 CUSTOMER DUE DILIGENCE AND RECORD KEEPING (R.12) (APPLYING R.5, 6,<br />
AND 8 TO 11) .............................................................................................................................. 151<br />
4.2 MONITORING SUSPICIOUS TRANSACTION REPORTING AND OTHER ISSUES<br />
(R.16) (APPLYING R.13-15, 17 & 21) ....................................................................................... 156<br />
4.3 REGULATION, SUPERVISION AND MONITORING (R.24-25) .................................. 158<br />
4.4 OTHER NON-FINANCIAL BUSINESSES AND PROFESSIONS - MODERN SECURE<br />
TRANSACTION TECHNIQUES (R.20) .................................................................................... 166<br />
5. LEGAL PERSONS AND ARRANGEMENTS & NON-PROFIT ORGANIZATIONS .... 168<br />
5.1 LEGAL PERSONS – ACCESS TO BENEFICIAL OWNERSHIP AND CONTROL (R.33)<br />
.................................................................................................................................... 168<br />
5.2 – LEGAL ARRANGEMENTS – ACCESS TO INFORMATION ON BENEFICIAL<br />
OWNERSHIP AND CONTROL INFORMATION (R.34) ......................................................... 173<br />
5.3 NON-PROFIT ORGANIZATIONS (SR.VIII) ................................................................... 174<br />
6. NATIONAL AND INTERNATIONAL COOPERATION ................................................ 175<br />
6.1 NATIONAL COOPERATION ........................................................................................... 175<br />
6.2 UNITED NATIONS CONVENTIONS AND SPECIAL RESOLUTIONS (R.35 & SR.I) .....<br />
.................................................................................................................................... 177<br />
6.3 MUTUAL LEGAL ASSISTANCE (R.32, 36-38, SR.V) ................................................... 179<br />
6.4 EXTRADITION (R. 37 & 39, & RS.V) ............................................................................. 184<br />
6.5 OTHER FORMS OF INTERNATIONAL COOPERATION (R. 40, RS.V &<br />
R.32) .................................................................................................................................... 186<br />
LEGAL FRAMEWORK .............................................................................................................. 186<br />
7. OTHER ISSUES ....................................................................................................................... 189<br />
7. 1 RESOURCES AND STATISTICS ....................................................................................... 189<br />
7.2 OTHER RELEVANT AML/CFT MEASURES .................................................................... 190<br />
TABLE 1. RATINGS OF COMPLIANCE WITH FATF RECOMMENDSATIONS ................. 191<br />
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TABLE 2: RECOMMENDED ACTION PLAN FOR IMPROVING THE AML/CFT SYSTEM .....<br />
.......................................................................................................................................... 200<br />
ANNEX 1: LIST OF AUTHORITIES AND ORGANIZATIONS MET ..................................... 210<br />
ANNEX 2 : LIST OF LEGAL INSTRUMENTS AND OTHER DOCUMENTS REVIEWED BY<br />
EVALUATION TEAM SUPRA-NATIONAL INSTRUMENTS ............................................... 212<br />
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LIST OF ABBREVIATIONS AND ACRONYMS<br />
€ Euro<br />
ACAB Association of Insurance Brokers of Benin<br />
AML/FT Anti-Money Laundering and Financing of Terrorism<br />
APBEF Professional Association of Banks and Financial Institutions<br />
ASA-Bénin Association of Insurance Companies of Benin<br />
ASSB Association of Insurance Companies of Benin<br />
AU African Union<br />
BC Banking Commission<br />
BCEAO Central Bank of West African States<br />
BRVM Regional Stock Market<br />
C Compliant<br />
CENTIF National Financial Information Processing Unit<br />
CIMA Inter-African Conference of Insurance Markets<br />
CRCA Regional Insurance Supervision Commission<br />
CREPMF Regional Council on Public Savings and Financial Markets<br />
CSDFS Control and Surveillance Unit for Decentralized Financial Systems<br />
DC/BR Central Depository/Settlement Bank<br />
DMC Directorate of Money and Credit<br />
DMFA Directorate of Monetary and Financial Affairs<br />
DNFBP Designated Non-Financial Businesses and Professions<br />
RSO Reporting of Suspicious Operations<br />
ECOWAS Economic Community of West African States<br />
FATF Financial Action Task Force<br />
FIU Financial Intelligence Unit<br />
FTRO FATF-Type Regional Organization<br />
FZ Franc Zone<br />
<strong>GIABA</strong> Inter-Governmental Action Group against Money Laundering in West Africa<br />
IDCC Inter-ministerial Drug Control Committee<br />
IFI International Financial Institutions<br />
IOIC International Organization of Insurance Controllers<br />
LC Largely Compliant<br />
MEQ Mutual Evaluation Questionnaire<br />
MER Mutual Evaluation Report<br />
NA Not Applicable<br />
NC Non Compliant<br />
NCCT Non-Cooperative Countries and Territories<br />
OCRTIS Central Bureau for Repression of Illicit Drug Trafficking<br />
OHADA Organization for Harmonization of Business Law in Africa<br />
OICV International Organization of Securities Controllers<br />
ONECCA National Order of Chartered Accountants and Authorized Public Accountants<br />
UNODC United Nations Office on Drug and Crime<br />
PC Partially Compliant<br />
PEP Politically Exposed Persons<br />
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R Recommendation<br />
SR Special Recommendation<br />
UNO United Nations Organization<br />
USD United States Dollar<br />
WAEMU West African Economic and Monetary Union<br />
WAMU West African Monetary Union<br />
ZF Franc Zone<br />
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Map of Benin<br />
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INTRODUCTION<br />
GENERAL INFORMATION AND METHODOLOGY USED FOR THE EVALUATION OF<br />
<strong>BENIN</strong><br />
1. The evaluation of the Anti-money Laundering and Financing of Terrorism (AML/FT) system of<br />
Benin was based on the Forty Recommendations of 2003 and the Nine Special Recommendations of 2001<br />
on Terrorism Financing as well as the 2004 Methodology developed by the Financial Action Group<br />
(FATF).<br />
2. The evaluation was based in particular on legal texts from international, community and national<br />
sources made available to the Team of Evaluators by the Secretariat of the Inter-Governmental Action<br />
Group against Money Laundering in West Africa (<strong>GIABA</strong>), the authorities and other private national<br />
actors of the AML/FT system.<br />
3. The data collected during the onsite visit conducted from 15 to 30 June 2009 to Cotonou and<br />
Porto Novo among officials and representatives of the competent government agencies and the private<br />
sector concerned, and who feature on the list attached as an annex to this report, were also used in the<br />
evaluation.<br />
4. The evaluation was conducted by a team of experts commissioned by <strong>GIABA</strong>, who are nationals<br />
of member-States and all of whom received from it prior training as evaluator.<br />
5. Those who participated in this evaluation included Mrs Fatoumata KONE, Secretary General of<br />
CENTIF of Côte d’Ivoire, (Financial Expert), Mrs Aminata SEMDE OUEDRAOGO, Head of Money and<br />
Loans Department at the Ministry of Finance of Burkina (Financial Expert), Mr Biyao IDRISSOU<br />
KOLOU MOUSTAFA, Research Officer at the Office of the Minister of Justice of Togo (Legal Expert),<br />
Mr Modibo SYLLA, President of CENTIF of Mali (Operations Expert), Mr Mamadou THIANDOUM,<br />
Director of the Judicial police at the Ministry of Interior of Senegal (Operations Expert), Mr Elpidio<br />
FREITAS, Legal Expert at <strong>GIABA</strong> (Coordinator of the mission) and Ms Mariame TOURE, Officer in<br />
charge of Evaluation, Research and Documentation at <strong>GIABA</strong>.<br />
6. The report proposes a synthesis of AML/FT measures in force in Benin as at the time of the onsite<br />
visit or immediately after. It describes and analyses them, and makes Recommendations on actions to be<br />
taken to strengthen certain aspects of the system (Cf. Table 2). It also indicates the level of compliance of<br />
Benin with 40+9 Recommendations of FATF (Cf. Table 1).<br />
7. In accordance with the Methodology for evaluating compliance with the 40 Recommendations<br />
and the 9 Special Recommendations of FATF3, the community Regulations and national laws were<br />
considered as “laws and regulations”, the Instructions of BCEAO and CREPMF as “other constraining<br />
means” and the community Guidelines as non-constraining, during the rating of compliance with the<br />
different Recommendations of FATF.<br />
8. It should be noted that Benin has been evaluated in the framework of the African Peer Review<br />
Mechanism (APRM) of the African Union to which it has subscribed. Despite the request to the<br />
authorities, the mission could not have access to the report prepared at the end of this evaluation on good<br />
governance, which, in any case, contains no component on AML/FT.<br />
Consequently, this mutual evaluation is the very first of its kind in Benin.<br />
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EXECUTIVE SUMMARY<br />
General Information<br />
9. This report presents a synthesis of measures taken in the area of AML/FT by the Republic of<br />
Benin, as at the time of the field visit, conducted from 15 to 30 June 2009, and shortly after. It describes<br />
and analyzes these measures and makes recommendations on how certain aspects of the AML/FT could be<br />
strengthened. It also indicates the level of Benin’s compliance with the 40 + 9 Recommendations of<br />
GAFI.<br />
10. Covering an area of about 114.763 km², Benin is situated in West Africa and extends from the<br />
Atlantic Ocean to River Niger. It has an estimated population of 8,400,000 inhabitants. Its capital is Porto<br />
Novo.<br />
11. Benin is ranked 161st (out of 181 countries) on the Human Development Index (HDI), according<br />
to the 2009 Report of the United Nations Development Programme (UNDP).<br />
12. Since its accession to national sovereignty, on 1 st August 1960, the Republic of Benin has<br />
experienced successive changes of regimes and governments. With the adoption, by Referendum on 2<br />
December 1990, of the Constitution, promulgated by Act 90-32 of 11 December 1990, the people opted<br />
for a Rule of Law and multi-party democracy.<br />
13. According to the Constitution, the President of the Republic, Head of State and Head of<br />
Government is elected for a period of 5 years, renewable once. He is the holder of the Executive power.<br />
He determines and conducts the policy of the Nation and exercises the regulatory power.<br />
14. Parliament is constituted by a single Chamber called the National Assembly, composed of 83 MPs<br />
elected for 4 years and eligible for re-election. It exercises the legislative power and controls the action of<br />
the Government.<br />
The Judicial Power is exercised by the Supreme Court, the Courts and Tribunals.<br />
15. The territorial administrative division of Benin comprises 12 Departments, 77 Communes, and<br />
546 Districts.<br />
16. Benin is considered in the sub-region as a country where child trafficking is prospering (reception,<br />
appeal, transit). These movements of people are often illicit and carried out in disregard of the legal<br />
provisions in force, especially the obligation to obtain permission to leave the national territory for minors<br />
under (18) years. There is, however, a general awareness (public authorities and civil society) about<br />
combating child trafficking in general and that of young girls in particular.<br />
17. Besides, Benin is a transit country for drug trafficking, especially cocaine, like most countries in<br />
the sub-region, with the related risk of laundering the proceeds from drug trafficking.<br />
18. With the creation of the Central Bureau for Repression of Illicit Drug Trafficking (OCRTIS),<br />
actions were undertaken by the Beninese Government, which resulted in the seizure of large quantities of<br />
drugs (423,245 grams of cocaine seized in 2007).<br />
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19. Corruption is also perceived at a high level in the country. According to some authorities met,<br />
corruption is the main source of money laundering in Benin.<br />
20. The business environment seems to harbour all money laundering acts, backed by the existence of<br />
a dynamic informal sector, though the real impact could not be assessed and the widespread use of cash as<br />
means of payment. Benin is, in fact, the main destination of the re-export trade, particularly vehicles to<br />
other States of the sub-region.<br />
Legal system and related institutional measures<br />
21. The legal system governing Anti-Money Laundering and Financing of Terrorism (AML/FT) was<br />
established in Benin on the basis of legal norms adopted at the community (Guidelines, Regulations and<br />
Decisions and Instructions of bodies of WAEMU and CIMA, in particular) and national (Law, Decrees,<br />
Orders and other derived texts) levels.<br />
22. Criminalization and sanctioning of money laundering were introduced into the Beninese Criminal<br />
Law by Article 102 of Act 97-025 of 18 July 1997 on Control of Drugs and Precursors. But, this<br />
provision, which covered the material elements of conversion, transfer, concealment, disguise, acquisition,<br />
possession and use, only targeted laundering of money from drug trafficking.<br />
23. It was Act 2006-14 of 31 October 2006 on anti-money laundering, referred to hereinafter as the<br />
AML Act, adopted in transposition of Guideline 07/2002/CM/UEMOA of 19 September 2002 on antimoney<br />
laundering in WAEMU member-States, which completed the provision by harmonizing it with the<br />
prescriptions of the Vienna and Palermo Conventions, particularly extending widely the scope of offence<br />
to cover any crime or offence.<br />
24. However, the annexed to this law on modalities of client identification in case of distance<br />
financial operations does not seem to have been formally adopted by the legislator. This situation must be<br />
corrected.<br />
25. The AML Act specifies, on the one hand, a preventive and operational framework, particularly<br />
that of the Financial Information Unit (CENTIF), as well as the legal framework of international<br />
cooperation (legal mutual assistance and extradition) and, on the other, sanctions applicable to both<br />
individual and moral entities, guilty of money laundering. It also provides for measures for freezing,<br />
seizure as well as confiscation of the proceeds of the offence and means used to commit it.<br />
26. This legal provision, however, contains some weaknesses. Hence, it makes no provision for<br />
terrorism financing as a predicate money laundering offence and does not criminalize this offence or stock<br />
market offences, such as insider trading and market manipulation. Besides, the legal basis of prosecution<br />
for money laundering of the author of the predicate offence (self-laundering) does not appear clearly.<br />
Authorities should criminalize the above-mentioned offences as recommended by GAFI.<br />
27. The efficiency of the AML Act has not been assessed ever since it came into force and no case of<br />
money laundering has been brought before the courts.<br />
28. There are no statistics or mechanisms for regular assessment of the efficiency of the AML Act.<br />
Necessary measures should be taken to render effective the application of the law, particularly through<br />
wider dissemination among the authorities that are supposed to enforce it, accompanied by appropriate<br />
training.<br />
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29. Concerning freezing, seizure and confiscation of the proceeds of crime, particularly in the<br />
framework of Combating the Financing of Terrorism (CFT), community Regulation<br />
14/2002/CM/UEMOA institutes a mechanism for freezing funds and other financial resources in<br />
application of Resolutions 1267 (1999) and 1373 (2001) of the United Nations Security Council. This<br />
Regulation, which is directly applicable in States of the zone, is quite incomplete and does not authorize<br />
the freezing of all funds and other property belonging to individuals and entities designated by the<br />
Sanctions Committee. Furthermore, it does not target the lists established by the Security Council and<br />
does not institute decision procedures on autonomous lists or those submitted by third-party States. Hence,<br />
it does not enforce Resolution 1373 (2001) of the Security Council.<br />
30. The WAEMU Council of Ministers adopted a guideline on 4 July 2007, fixing the outline of a<br />
mechanism for preventing and punishing terrorism financing to be incorporated into the domestic law.<br />
However, since Benin has not yet adopted the ad hoc transposition law, there seems to be a legal vacuum<br />
in that respect.<br />
31. Furthermore, there is no specific provision on confiscation of property of equivalent value.<br />
32. The authorities should adopt the necessary measures, particularly for including in the legislation,<br />
the provisions on property of equivalent value, to facilitate the freezing, seizure and confiscation of<br />
property associated with the financing of terrorism, by criminalizing this offence into the domestic law, to<br />
prepare and maintain adequate statistics.<br />
33. Benin established the National Financial Information Processing Unit (CENTIF), in application of<br />
Article 16 of the AML Act. CENTIF, which is a central administrative structure mainly in charge of<br />
receiving and treating reported suspicious money laundering acts, became operational on 20 June 2008,<br />
the date of the swearing in of its members appointed by decree on 7 May 2008. However, the attributions<br />
of CENTIF do not cover Terrorism Financing, as its correspondents in the administrations have not yet<br />
been formally appointed. Moreover, the suspicious reporting model fixed by ministerial decree has not<br />
been disseminated in all the institutions subject to it, while the financial and human resources of CENTIF<br />
seem inadequate to ensure its real autonomy. The subscription of CENTIF to the Egmont Group is not yet<br />
effective, which constitutes for it an obstacle in the area of international cooperation.<br />
34. The attributions of CENTIF should be extended to terrorism financing. The dissemination of the<br />
suspicion reporting model fixed by ministerial decree must be extended to all institutions subject to the<br />
act. The subscription to the Egmont Group should be effective in order to facilitate the action of CENTIF<br />
in the area of international cooperation.<br />
35. The investigation and criminal proceedings authorities in the area of AML/FT are the same as<br />
those competent in common law. There is no specialization of AML/FT in the police, customs or justice<br />
departments. Generally, money laundering offence is not clearly apprehended. There are no specific<br />
provisions that allow the competent investigation authorities to defer or abstain from arresting people or<br />
seizing funds in the context of AML.<br />
36. The resources and training of the investigation and criminal prosecution authorities are<br />
inadequate.<br />
37. Specialized structures should be created at the level of the jurisdictions, particularly for the<br />
instruction of AML/FT cases. The entire resources of the investigation and criminal proceedings<br />
authorities in the area of AML/FT should be significantly strengthened. A specific and pertinent training<br />
in anti-money laundering and financing of terrorism should be organized for these authorities, while<br />
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including topics covering, in particular, the scope of predicate offences, typologies of money-laundering,<br />
investigation techniques that should help identify financial channels.<br />
38. Furthermore, Benin has not yet instituted a specific system for reporting or communicating<br />
information in the context of AML/FT, as required by GAFI. There is no computerized database for<br />
monitoring cross-border transportation of money and negotiable securities and a mechanism for automatic<br />
transmission of the relevant information to CENTIF.<br />
Preventive measures – Financial institutions<br />
39. The draft of a national AML/FT strategy seems to have been initiated by the Beninese authorities<br />
and the development of an action plan at the national level is ongoing.<br />
40. The identification of the risks and vulnerabilities to ML/FT should be envisaged by Benin in order<br />
to define an action plan for their reduction.<br />
41. The legislation in force effectively imposes on subjected financial institutions due diligence<br />
obligation, even if these obligations do not cover all financial institutions. GAFI’s requirement relating to<br />
the imposition of certain relative obligations, particularly with regard to due client diligence duty by legal<br />
instruments equivalent to the “law or regulation” is not always respected.<br />
42. The legislation in force does not formally and specifically ban the keeping of anonymous or<br />
numbered accounts or accounts under fictitious names. The obligations on identification of the effective<br />
beneficiary are not clear and there is no constant due diligence obligation towards the clients or vigilance<br />
of existing clients. Moreover, the total removal of the due diligence obligation in favour of certain<br />
subjected institutions, due to their domiciliation in the WAEMU space does not conform to the relevant<br />
recommendations.<br />
43. The legislation makes no provision for due diligence towards politically exposed persons and<br />
bank correspondent relations.<br />
44. Generally, the financial sector seems as the best impregnated with AML measures, as some AML<br />
obligations are now being applied, even if there are some weaknesses in the practice.<br />
45. Micro-finance institutions have not adopted significant measures to ensure the application of the<br />
legislation on AML, even if the risk of money laundering seems low in this sector because of the<br />
smallness of the amounts deposited in individual savings accounts,<br />
46. Although endowed with a more complete regulation, national actors operating in the insurance<br />
sector do not seem to have knowledge, less still clear awareness of the AML/FT obligations imposed on<br />
them.<br />
47. There are no policies for ensuring the effective implementation of the measures required on the<br />
one hand and for preventing the abusive use of the new technologies and on the other, for controlling<br />
specific risks associated with business relations or transactions that involve the physical presence of the<br />
parties, in the framework of AML/FT.<br />
48. The use of third parties and intermediaries is frequent but there are no clear and complete<br />
requirements concerning this type of relations as far as AML/FT is concerned.<br />
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49. The nature and availability for the competent authorities of documents to be kept by financial<br />
institutions are not specified.<br />
50. The activities of transfer of funds through banks have developed rapidly over the past years. Even<br />
if they meet a higher expectation on the part of economic operators, their rapid growth is creating<br />
concerns with regard to risks of money laundering. Many local banks have indeed delegated to sub-agents<br />
like Western Union or MoneyGram but also to other less well structured intermediaries for that purpose<br />
(travel agencies, micro-finance institutions, etc.), the reception/transmission of fund transfers. Yet, neither<br />
the delegated banks, nor their supervisors seem to exercise appropriate controls in the framework of<br />
AML/FT on these delegated institutions, despite the existing potentially high risk of money laundering.<br />
51. The Beninese authorities should adopt measures to regulate the “delegation” of authorization for<br />
the transfer of funds and securities by authorized intermediaries, particularly by requesting for prior<br />
authorization to operate (or an authorization) by the competent authorities (BCEAO, Ministry of Economy<br />
and Finance), request banks and their supervisors to put in place a mechanism for controlling the activities<br />
of these entities with particular emphasis on the obligations relating to AML.<br />
52. The actors operating informally in the sector should be identified and eventually invited to<br />
regularize their situation or to put an end to their activities, on pain of the sanctions provided for by the<br />
legislation.<br />
53. The Mandatory Declaration of Suspicion (RSO) is limited to money laundering and does not seem<br />
to extend to other crimes and offences.<br />
54. There is no obligation to declare operations associated with FT, except in the case where they<br />
concern money laundering operations.<br />
55. Attempted offences are not subjected to a RSO.<br />
56. Apart from credit institutions, the other financial institutions subjected to the AML act are<br />
unaware of their RSO duties.<br />
57. There is lack of effectiveness, since the number of RSOs received is limited and no RSO has yet<br />
been fully treated.<br />
58. There is no visibility study and usefulness of the implementation of a system of declaration of<br />
cash transactions of a certain ceiling to the national central agency equipped with a computerized<br />
database.<br />
59. The existing guidelines are incomplete while certain financial institutions do not have them. The<br />
feedback conditions are not in conformity with the requirements.<br />
60. The internal programmes and provisions on AML are only being implemented in Banks. Even in<br />
these cases, problems of resources and autonomy seem to exist.<br />
61. Virtually all financial institutions have not implemented continuing staff training programmes on<br />
AML/FT.<br />
62. Financial institutions are under no obligations to ensure that their branches and subsidiaries<br />
abroad comply with the AML/FT measures and inform the supervisory authorities when a branch or<br />
subsidiary abroad is incapable of complying with the AML/FT measures.<br />
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63. There is no specific ban on the establishment of fictitious banks or the pursuit of their activities to<br />
establish or pursue bank correspondent relations with fictitious banks.<br />
64. Concerning the control of banks and other financial institutions, the supervisory authorities have<br />
been appointed and have extended powers, including sanctions for accomplishing their AML/FT missions.<br />
65. But the actual exercise of these powers does not seem satisfactory, particularly in terms of on the<br />
spot controls which are inadequate in both number and quality. The AML component is not even taken<br />
into account by these controls, particularly in the stock market, micro-finance and insurance sectors.<br />
66. Moreover, no sanction for violation of the AML act has been applied by the supervisory<br />
authorities since the coming into force of the act, whether for administrative or disciplinary reasons.<br />
67. The supervisory agencies need to intensify their controls and their resources particularly by<br />
organizing adequate and in-depth training on AML/FT for their staff. The prescribed sanctions must be<br />
applied if an offence is committed.<br />
Preventive measures – Designated non-financial enterprises and professions<br />
68. The AML Act specifically, but without limitation, subjects to obligations of prevention and<br />
detection of ML a series of Designated Non-Financial Enterprises and Professions (EPNFD) the list of<br />
which extends beyond the list kept by GAFI, even if Chartered Accountants are not specifically mentioned<br />
(the law mentions Auditors).<br />
69. But, apart from the fact that some of them are neither regulated nor controlled, these EPNFD are<br />
aware of the AML Act and therefore their obligations resulting from it.<br />
70. The weaknesses mentioned at the level of the financial sector are also valid for the EPNFD<br />
(limited due diligence obligations, lack of guidelines, lack of money laundering control programmes, lack<br />
of implementation, non application of the laid down sanctions).<br />
71. The Beninese authorities should ensure vast dissemination of the AML Act and establish<br />
guidelines to assist EPNFD to apply and respect their obligations in the area of money laundering.<br />
72. The competent authorities should ensure the respect of the obligations in the area of money<br />
laundering and financing of terrorism by casinos and other categories of designated non-financial<br />
businesses and professions.<br />
Moral persons and legal arrangements<br />
73. The OHADA law and provisions of the domestic law established a complete legal framework for<br />
the constitution, functioning and control of commercial companies.<br />
74. However, the lack of control of the respect of the obligations of the OHADA law and the lack of<br />
reliability of the information contained in the RCCM whose data are not regularly updated, make it<br />
impossible to know, particularly the real holders of the capital or the effective beneficiaries.<br />
75. There seems to be no legal arrangement of the trust type in Benin.<br />
16
76. The legislation in force does not seem to avoid dishonest use of moral entities that issue bearer<br />
shares to launder money.<br />
77. These authorities should adopt measures to implement all the provisions of the OHADA text,<br />
notably in the area of updating the data featuring in the RCCM.<br />
78. Bearer actions should be particularly monitored in order to avoid a situation where moral entities<br />
that issue bearer shares are used to launder money or finance terrorism.<br />
Non-Profit Organizations (NPOs)<br />
79. By virtue of the legislative and regulatory provisions in force in Benin, non-profit institutions are<br />
obliged, for the exercise of their activities, to be registered either at the Ministry of Interior or in the<br />
prefectures or the City Halls and publish them in the Gazette.<br />
80. The AML Act subjects Non-Governmental Organizations (NGOs) to the obligations contained in<br />
it, notably those related to vigilance, conservation and communication of documents.<br />
81. But the NPOs are not aware of the AML Act and the obligations contained in it. No sensitization<br />
campaign has been conducted for them.<br />
82. There is no adequate surveillance and control of NPOs, in the framework of AML. Only financial<br />
controls of a fiscal nature are carried out, when an NPO, benefits from public funds or tax exemptions.<br />
83. Due to the legal vacuum in the area of the control of terrorism financing, legal action cannot be<br />
taken in case they are used to finance terrorism.<br />
84. The authorities should conduct a specific study to assess the vulnerability of the NPO sector to<br />
risks of AML/FT and transpose as early as possible into the domestic law, the UEMOA Guideline on FT<br />
control, particularly to fix the provisions in the area of control and regulation of NGOs and dissuade their<br />
abusive use for financing terrorism in the framework of their activities.<br />
85. Sensitization actions should be conducted among NPOs in the area of AML/FT.<br />
86. Adequate surveillance of NPOs should be exercised to ensure the respect of the AML obligations<br />
fixed by law.<br />
Internal and International Cooperation<br />
87. There are no formal mechanisms for cooperation and coordination at the national level, the<br />
sharing of information and cooperation between departments seems weak or even non-existent.<br />
88. The competent authorities should formally institute efficient mechanisms for cooperation and<br />
coordination of the activities of the departments at the national level in the area of AML/FT and regularly<br />
assess the effectiveness of these mechanisms.<br />
89. At the international level, Benin has ratified the Vienna and Palermo Conventions and the<br />
International Convention for the Repression of Terrorism Financing. But the implementation of these<br />
Conventions is either incomplete or non-existent (Convention on the Financing of Terrorism).<br />
17
90. Resolution 1267 (1999) has been partially implemented whereas Resolutions 1373 (2001) has not<br />
yet been implemented.<br />
91. The necessary provisions should be adopted to ensure the implementation of the above-mentioned<br />
Conventions and Resolutions.<br />
92. In accordance with the pertinent provisions of International Agreements and Conventions on the<br />
one hand and domestic texts, particularly the AML Act and the Decree on creation of CENTIF on the<br />
other hand, the competent Beninese authorities can grant to their foreign counterparts, the widest possible<br />
international cooperation in the area of legal mutual assistance on condition that a request is made by these<br />
countries subject to reciprocity.<br />
93. The lack of criminalization of FT, however, constitutes a real obstacle to the other forms of<br />
international cooperation.<br />
94. Furthermore, the lack of a system for data collection and lack of statistics on international<br />
cooperation in the area of AML/FT do not make it possible to assess the effectiveness and efficiency of<br />
this international cooperation.<br />
95. The law on transposition of the WAEMU Guideline on the fight against FT should be quickly<br />
adopted and statistics on legal mutual assistance and extradition, kept.<br />
Other Subjects<br />
96. The lack of resources often appeared as a major concern for the actors of the AML/FT system.<br />
97. In this regard, it would be necessary to increase the financial and human resources allocated to<br />
CENTIF and the investigation and legal proceedings authorities to enable them to adequately accomplish<br />
their missions.<br />
98. Besides, the training of these authorities as well as the control and supervisory bodies should also<br />
be strengthened in a significant manner.<br />
99. The general lack of statistics on AML/FT observed at all the levels makes it difficult to assess the<br />
efficiency of the ad hoc system put in place.<br />
100. In this regard, the Beninese authorities should put in place mechanisms for collection, processing<br />
and dissemination of quantified data and ensure that statistics on ML/FT are kept.<br />
18
GENERAL INFORMATION<br />
1.1 GENERAL INFORMATION ON THE COUNTRY AND ITS ECONOMY<br />
101. Covering an area of about 114,763 km², Benin is situated in West Africa and stretches from the<br />
Atlantic Ocean to River Niger. Its population is estimated at 8,400,000 inhabitants in 2009. Its capital is<br />
Porto Novo.<br />
102. Benin is limited in the North by River Niger, which separates it from the Republic of Niger, in the<br />
North-West by Burkina-Faso, in the West by Togo, in the East by Nigeria and in the South by the Atlantic<br />
Ocean.<br />
103. Benin is ranked 161st (out of 181 countries) on the Human Development Index (HDI), according<br />
to the 2009 Report of the United Nations Development Programme (UNDP).<br />
104. At the economic level, the primary sector is dominated by Agriculture, which represents more<br />
than 71% of its value added. Thanks to the extension efforts of rural intervention agencies, new techniques<br />
and new forms of organization of farming activities have been introduced in the campaigns, which have<br />
brought about qualitative transformations in traditional living conditions. An important limestone mine<br />
situated at Onigbolo constitutes the only mining resource currently exploited.<br />
105. Cottage industry service is particularly booming in the big towns and large villages. Better<br />
equipped, it transforms imported raw materials and carries out various repairs in make-shift workshops<br />
established along the roads. The cottage industry sector is, however, facing many problems, the most<br />
important being the operation, production and marketing.<br />
106. The secondary sector is characterized by the predominance of light industries and the quasiabsence<br />
of heavy industries. Its development is thwarted by many obstacles, namely:<br />
� Location of the industries, their supply in raw materials and the choice of basic technologies;<br />
� Relatively high production costs and the non-renewal of materials used;<br />
� Training of the technical managers and retraining of staff currently in place;<br />
� Narrowness of the domestic market and the problem of commercial outlets;<br />
� Lack of capital and absence of national initiatives.<br />
107. The tertiary sector is characterized by:<br />
� A domestic trade dominated by a traditional channel for local agricultural produce mainly sold on<br />
the market, and a modern channel for imported and local manufactured products. Hawkers ensure<br />
the coordination between the two channels;<br />
� An external trade, which is characterized by inexpensive and untransformed agricultural raw<br />
materials, and acquisition of capital goods, manufactured products and food products at high<br />
prices.<br />
Benin’s economy thus appears to be an extraverted economy.<br />
19
Political and Administrative Organization<br />
Political Organization<br />
108. Dahomey, proclaimed a Republic on 04 December 1958, became the People’s Republic of Benin<br />
on 30 November 1975. Following the National Conference of the Civil Society, held in Cotonou from 19<br />
to 28 February 1990, the country was renamed the Republic of Benin.<br />
109. Since its accession to national sovereignty, on 1 st August 1960, the Republic of Benin has<br />
experienced successive changes of regimes and governments. With the adoption, by Referendum on 2<br />
December 1990, of the Constitution, promulgated by Act 90-32 of 11 December 1990, the people opted<br />
for a Rule of Law and multi-party democracy, in which basic human rights, public liberties, the dignity of<br />
the human person and justice are guaranteed.<br />
110. By virtue of the 1990 Constitution, the President of the Republic is the Head of State. He is the<br />
elected leader of the Nation and embodies the national unity. He is the guarantor of the national<br />
independence, the territorial integrity and the respect of the Constitution, international treaties and<br />
agreements. He is elected for a 5-year mandate, renewable once. The President of the Republic is the<br />
holder of the Executive Power. He is the Head of Government, and in that capacity, he determines and<br />
conducts the policy of the Nation. He exercises regulatory power.<br />
111. He appoints, after advisory opinion from the Bureau of the National Assembly, members of the<br />
Government, sets forth their attributions and terminates their appointment. The members of the<br />
Government report to him.<br />
112. The Parliament is constituted by a single Chamber called National Assembly, whose members<br />
carry the title of MP. Its exercises Legislative Power and controls government action. MPs are elected for<br />
4 years and may be re-elected. The National Assembly is currently composed of 83 members.<br />
Judicial Power is exercised by the Supreme Court, Courts and Tribunals.<br />
113. The Constitutional Court is the highest jurisdiction of the State in constitutional matters. It<br />
rules on the constitutionality of the law and guarantees fundamental human rights and liberties. It is the<br />
regulatory body for the functioning of the institutions and activity of public authorities. The Court is<br />
composed of seven (07) members, four (04) of whom are appointed by the National Assembly and three<br />
(03) by the Head of State, for a mandate of 5 years renewable once.<br />
114. The Supreme Court is the highest jurisdiction of the State in administrative, judiciary<br />
matters and accounts of the State. It has jurisdiction over litigation surrounding local elections. The<br />
decisions of the Supreme Court are final. They are binding on the Executive Power, the Legislative Power,<br />
as well as all the jurisdictions.<br />
115. The High Court of Justice has jurisdiction to try the President of the Republic and members of<br />
the Government for acts described as high treason, offences committed in the performance or on the<br />
occasion of the performance of their duties, as well as their accomplices in case of a plot against state<br />
security.<br />
20
Territorial administrative organization<br />
116. The table below presents the territorial administrative organization of Benin.<br />
Territorial division Deliberating body Executive body Deconcentra-<br />
Designation Nber<br />
ted/<br />
responsible<br />
body<br />
Department 12 Conseil Département<br />
de Concertation and<br />
de Coordination<br />
(CDCC)<br />
Commune*<br />
Prefect DGAT, MD<br />
77 *Communal Council Mayor* Prefect<br />
District 546 District Council District Chief Mayor<br />
Area/Village<br />
3628<br />
Village and area<br />
council<br />
Area Chief Mayor<br />
117. The table shows that the territorial administrative division of Benin comprises three levels:<br />
Departments (12), Communes (77) and Districts (546). Villages and Areas (3628) do not represent<br />
administrative levels as such.<br />
118. Each Department is headed each by a prefect, representing the Government and each of the<br />
ministers. The prefectoral authority provides assistance and counselling to the communes, as well as<br />
support and harmonization of their actions with those of the State, controls the legality of actions taken by<br />
the City Council and the Mayor. As the responsible authority, the prefect exercises a priori control on the<br />
10 most important acts of communal life, as well as a posteriori controls on all actions of the commune.<br />
119. The Communes are upgraded to Territorial Communities and endowed with legal personality and<br />
financial autonomy, with elected Communal Council and Mayor, in charge of local development and the<br />
education (nursery and primary), health (primary healthcare) sectors, commercial (markets) and road<br />
(tertiary roads) infrastructure, etc.<br />
120. The Districts are administrative constituencies but only have powers delegated by the mayor (for<br />
example district chiefs, who are elected during communal elections, can provide proximity Registry<br />
services).<br />
121. The Villages and Areas are administered by Village and Area Councils constituted by Village<br />
Chiefs and Village Councillors, who have advisory status to handle the management of current affairs<br />
such as mobilization of the inhabitants to maintain roads, settlement of certain land disputes and others<br />
caused by the ramblings of domestic animals, etc.<br />
21
122. Benin is a member of the West African Monetary Union (WAMU), the West African Economic<br />
and Monetary Union (WAEMU), the Economic Community of West African States (ECOWAS), the<br />
Inter-governmental Action Group against Money Laundering in West Africa (<strong>GIABA</strong>), the Organization<br />
for the Harmonization of Business Law in Africa (OHADA), the Franc Zone, the African Union (AU) and<br />
the United Nations Organization (UNO).<br />
123. <strong>GIABA</strong> was created in 1999 by the ECOWAS Conference of Heads of State and Government to<br />
combat money laundering and financing of terrorism in its member-States. Its mandate was extended in<br />
2006 to cover the fight against the financing of terrorism.<br />
Overview of the macro-economic, monetary and financial framework<br />
124. At the macro-economic level, the geographical situation of Benin, placed between Togo and<br />
Nigeria, is particularly not comfortable with regard to the options of these two countries in the area of<br />
international trade. Togo has remained faithful to its open-door policy, which enabled it in the past to play<br />
the role of a hub for redistribution of certain import products in the sub-region. Nigeria, though<br />
representing, by its large population, a highly attractive potential market, has transformed itself, under the<br />
effect of exchange rate distortions, into Benin’s supplier of inexpensive products like fuel, certain<br />
materials, various household appliances, etc.<br />
125. Moreover, the length and permeability of Benin’s borders constitute a natural handicap which can<br />
only facilitate irregular crossings which occur spontaneously from the moment there are imbalances<br />
between the currencies of tariff regimes of countries of the sub-region.<br />
126. Benin is a member of the West African Monetary Union (WAMU), instituted by the Treaty of 14<br />
November 1973 and which comprises eight (8) States. This Union is mainly characterized by the transfer<br />
of the power of currency issue (Francs of the African Financial Community - CFA, a common currency<br />
unit), to a common Issue Institute, the Central Bank of West African States (BCEAO), which also<br />
manages the foreign exchange reserves of member-States.<br />
127. Benin is also a member of the Franc Zone (FZ), which is characterized by the following four<br />
principles:<br />
� Convertibility of currencies issued by the different institutes of the franc Zone is guaranteed<br />
without limit by the French Treasury;<br />
� Fixed parity: the currencies of the Zone are convertible, at fixed parities, without limitation of<br />
amounts. It also has a fixed parity with the Euro, the common European currency;<br />
� Free transferability: transfers are, in principle, free within the Zone, both for current transactions<br />
and capital flows;<br />
� Centralization of foreign exchange reserve: in compensation for the unlimited convertibility<br />
guaranteed by France, African central banks are under obligation to deposit part of their foreign<br />
exchange reserve (with the exception of amounts required for their current treasury and those<br />
regarding their transactions with the International Monetary Fund) at the French Treasury, on the<br />
operations account opened in the name of each of them. Since 1975, these holdings enjoy<br />
exchange guarantee vis-à-vis the Special Drawing Right (SDR).<br />
128. Benin is signatory to the Treaty of 10 January 1994 instituting the West African Economic and<br />
Monetary Union (WAEMU) aimed at completing the WAMU Treaty, which comprises the same member-<br />
22
States. Decisions of WAEMU bodies are directly applicable when they are the form of a Regulation or<br />
Decision. The Treaties instituting WAMU and WAEMU still coexist since their merger, though planned,<br />
has not yet materialized. According to the terms of the Constituent Treaty, “without prejudice to the<br />
objectives defined in the conditions laid down by this Treaty, the Union pursues the achievement of the<br />
objectives below:<br />
a. Enhancing the competitiveness of the economic and financial activities of member-States<br />
in the framework of an open market and a rationalized and harmonized legal environment;<br />
b. Ensuring convergence of the performances and economic policies of member-States<br />
through the institution of a multilateral surveillance procedure;<br />
c. Creating between member-States a common market based on free movement of people,<br />
goods, services, capital and the right of establishment of persons exercising an<br />
independent or salaried activity, as well as on a common external tariff and a common<br />
trade policy;<br />
d. Instituting a coordination of national sector policies, through the implementation of joint<br />
actions and eventually common policies, especially in the following areas: human<br />
resources, land use management, transport and telecommunications, environment,<br />
agriculture, energy, industry and mines;<br />
e. Harmonizing, as much as possible the efficient functioning of the common market, the<br />
legislations of member-States and particularly the tax system.<br />
129. Like the other WAMU countries, Benin is a member of the Economic Community of West<br />
African States (ECOWAS), which comprises fifteen (15) States of the West African sub-region. Created<br />
in 1975, ECOWAS was entrusted with the mission of promoting economic integration in "all areas of<br />
economic activity, in particular industry, transportation, telecommunications, energy, agriculture, natural<br />
resources, trade, monetary and financial issues, social and cultural issues.<br />
130. Generally, the 2008 economic conditions did not basically affect the dynamics of the national<br />
economy. Hence, the resumption of the economic activity initiated in 2006, was pursued in 2008 under the<br />
combined effect of the following factors:<br />
� Improvement of cotton spinning activities, despite the results obtained during the two farming<br />
seasons, which were below expectations;<br />
� Pursuit of the major works initiated by the Government of Benin (construction of roads, high<br />
passages, new administrative buildings, extension of the Cotonou Airport, etc.);<br />
� Improvement and strengthening of economic cooperation ties with Nigeria, the main destination<br />
of the re-export trade. Improvement of telecommunications, with the arrival of a fifth mobile<br />
phone operator in the sector.<br />
131. The nominal growth rate for the year 2008 was estimated at 12.6%. The Gross Domestic Product<br />
(GDP) at constant price increased from CFAF 2.641 billion in 2007 to 2.974 billion in 2008. According to<br />
the multilateral surveillance report of the WAEMU Commission, the actual growth rate reached 5.3% in<br />
2008, as against 4.6% in the previous year.<br />
23
132. The sector’s contributions to growth are: 1.6 percentage points for the primary sector, 0.5 point<br />
for the secondary sector and 1.8 points for the tertiary sector. The contribution from the tertiary sector<br />
remains preponderant and driven by commercial activities, particularly those involving re-export to<br />
Nigeria as well as the improvement in port activities. This sector also benefits from an increase in<br />
activities of the “Transport and communications” sector aided by the increase in transit activities, and<br />
mobile phone companies, following the reforms introduced in this area and the arrival of a new operator in<br />
2008.<br />
133. On the demand side, economic growth is driven by the consumption of households, which<br />
represented the greater share of consumption (86.4%) in 2008, as against 86.1% in 2007. It also<br />
constitutes the main component of uses of the GDP. With a relative weight of 75.3% of GDP, it was<br />
estimated at 2,329.9 billion in 2008, representing an increase of 11.8%, as compared to its 2007 level.<br />
134. Furthermore, the rate of domestic savings represented 7.1% of GDP, while the global investment<br />
rate was estimated at 20.7% of GDP, as against 20.6% in 2007.<br />
135. At the regional level, and according to figures released by the National Economic Policy<br />
Committee (CNPE), all first and second rank conversion criteria were respected, except those relating to<br />
the average inflation rate (estimation of 8.1% for a standard below 3%) and global external deficit,<br />
excluding grants to the nominal GDP (estimation of 5.1% for a standard below 5%).<br />
136. Benin’s economy is basically dominated by the informal sector, according to the economic and<br />
social report of the 1st quarter of 2008 prepared by the National Institute of Statistics and Economic<br />
Analysis (INSAE). The document specifies that in 2007 “the informal sector contributed for more than 2/3<br />
to the creation of national wealth”, representing 67.3% of the Gross Domestic Product (GDP), as against<br />
32.7% for the formal sector.<br />
137. According to the 2008 Report of the Banking Commission, overall use of funds in banks and<br />
financial institutions amounted to CFAF 980 billion.<br />
138. Loans to customers amounted to 626 billion. The share of short-term loans represents 382 billion<br />
while that of medium-term loans represents 221 billion and that of long-term loans 19 billion.<br />
139. Loans granted by banks for funding the Government’s (5) strategic development poles amounted<br />
to CFAF 333.4 billion at the end of December 2008, or 48.45% of outstanding bank loans. The<br />
distribution of these loans per pole is as follows:<br />
� Pole A “Transport, Logistics and Trade”: 33.06%;<br />
� Pole B “Cotton and Textiles”: 4.96%;<br />
� Pole C “Agro-Food, Fisheries, Fruits, Vegetables and Food Products”: 5.06%;<br />
� Pole D “Tourism, Culture and Cottage Industry”: 0.31%;<br />
� Pole E “Civil Works, Construction Materials and Wood”: 5.04%.<br />
24
140. The debit conditions of banks show a rate bracket of between 7.5% and 18%, and the average cost<br />
of resources mobilized by banks ranges between 2 and 5.79%.<br />
1.2 GENERAL SITUATION REGARDING MONEY LAUNDERING AND<br />
FINANCING OF TERRORISM<br />
141. Benin is considered in the sub-region as a country where child trafficking is prospering (reception,<br />
appeal, transit). These movements of people are often illicit and carried out in disregard of the legal<br />
provisions in force, especially the obligation to obtain permission to leave the national territory for minors<br />
under (18) years. A significant part would be associated with the practice of placing children in foster<br />
care, and movements for matrimonial reasons. There is, however, a general awareness (public authorities<br />
and civil society) of the need to combat child trafficking in general and that of young girls in particular.<br />
142. The business environment seems to conceal, for its part, acts of money laundering, against the<br />
backdrop of illicit drug trafficking (see statistics on drug seizures in Section 2.3 of this Report). Benin is<br />
also the hub of the re-export trade, particular that of vehicles.<br />
143. Moreover, corruption is also practised at a high level nationally. Indeed, according to some of the<br />
authorities met, corruption is alleged to be the main source of money laundering in Benin.<br />
144. In its World Report on Corruption, Transparency International ranks Benin 96 th (over 180) in the<br />
corruption table established in 2008.<br />
145. Since his election, the new President of the Republic of Benin, Dr Boni YAYI, has made<br />
corruption its hobby-horse. Various initiatives have been taken in this sense, ranging from a symbolic<br />
march of all the members of Government, to the establishment of an Observatory on the Fight against<br />
Corruption (OLC) and institution of a National Day against Corruption, and publication of a blank book of<br />
corruption in Benin, containing strong recommendation to the Leaders. On the occasion of the<br />
examination, by Heads of State of the African Union, of the report of the peer review mission prepared<br />
after an onsite visit, the President of the Republic of Benin affirmed to the press that Benin was declaring<br />
a war on corruption.<br />
146. The mission of the Observatory on the Fight against Corruption, whose operational budget forms<br />
part of the General Budget, is to:<br />
- Search for and analyze acts of corruption and related offences at all levels, with the<br />
assistance of state agencies in particular;<br />
- Handle corruption or fraud cases and make the necessary investigations;<br />
- Institute legal proceedings through the constitution of plaintiff;<br />
- Inform state institutions and the general public about cases it is aware of and take<br />
appropriate measures.<br />
25
147. During the meeting with the mission, the OLC officials placed the emphasis on the magnitude of<br />
the phenomenon, which spares no sector of activity (public or private). The most affected areas in the<br />
public sector are the Justice and Customs Departments. But, heavy penalties were recently imposed on<br />
those convicted. To ensure its autonomy, the OLC pointed out that a creation by law (and not by decree as<br />
is presently the case) would be more appropriate.<br />
148. Still, according to views collected on site, the lack of a law against illicit enrichment is a flaw in<br />
the mechanism for combating corruption.<br />
149. Unfortunately, the mission could not obtain figures to assess the magnitude of proceeds derived<br />
from these offences and which could be attributed to money laundering.<br />
150. Concerning the Fight against Financing of Terrorism, the authorities met were of the view that<br />
terrorism is unknown in Benin. These authorities consider as low the risk of terrorism financing and,<br />
therefore, have not carried out an analysis of the adequacy of the legislation in force applicable to actors of<br />
DNFBPs in particular, especially associations and NGOs, nor conducted specific studies to assess the<br />
sector’s vulnerability of to this risk.<br />
151. The Beninese authorities do not rule out the fact that the bases or dormant networks of terrorism<br />
exist to serve the active networks of other African countries.<br />
152. The AML Act makes no provision for considering the financing of terrorism as an underlying<br />
money laundering crime. No legislative or regulatory provision criminalizes terrorism financing offence in<br />
the internal legal order of Benin.<br />
153. The law that should transpose the WAEMU Guideline on the fight against the financing of<br />
terrorism into the national law has not yet been adopted. The mission observed that the bill was being<br />
examined for opinion by the Supreme Court.<br />
1.3 OVERVIEW OF THE FINANCIAL SECTOR<br />
154. The financial sector in Benin is composed of lending institutions (banks and financial<br />
institutions), microfinance institutions, insurance companies, manual foreign exchange operators and<br />
actors of the regional financial market.<br />
The national banking system comprises twelve (12) banks and one (1) financial institution.<br />
26
Table of Banks and Financial Institutions in activity in Benin as of 31-12-2008<br />
(Source: 2008 Annual Report, WAMU Banking Commission)<br />
Institution Equity (in CFAF<br />
million)<br />
Total Balance<br />
(in CFAF<br />
million)<br />
Number of branches<br />
and windows<br />
Number of<br />
accounts<br />
1. Bank of Africa –Benin 8000 428.399 16 132.971 314<br />
2. ECOBANK-Benin 3500 282.489 29 125.633 224<br />
3. Société Générale de<br />
Banques au Bénin<br />
Staffing<br />
7000 106.303 16 15.504 198<br />
4. Diamond Bank Benin 13.000 139.520 13 18.533 188<br />
5. Financial Bank 2500 61.643 7 10.185 111<br />
6. Banque Internationale<br />
du Bénin<br />
7. Continental Bank<br />
Benin<br />
8. BanqueAtlantique<br />
Bénin<br />
9. Banque Sahélo-<br />
Sahélienne pour<br />
l’Investissement et le<br />
Commerce-Bénin<br />
10. Banque Régionale de<br />
Solidarité du Bénin<br />
11. African Investment<br />
Bank<br />
9000 59.626 9 20.847 164<br />
3600 70.799 12 37.703 183<br />
5000 65.379 9 9336 105<br />
5000 27.588 2 3536 76<br />
2000 12.544 4 12.576 44<br />
2500 13.563 1 798 28<br />
27
12. Banque de l’Habitat du<br />
Bénin<br />
2250 14.883 1 6414 17<br />
13. Total Banks: 12 1.282.736 - 1652<br />
14. 1- Equipbail-Bénin 700 8363 N/A 10<br />
15. Total Financial<br />
Institutions: 1<br />
8363 1 N/A 10<br />
16. GRAND TOTAL 13 1.291.099 1662<br />
28
155. According to the 2009 Report of the Banking Commission, the total balance of lending<br />
institutions established in Benin amounted to CFAF 1,291,099 million at the end of December 2008.<br />
156. The Bank of Africa (BOA) appears to be the leading institution in the sector, particularly in terms<br />
of the size of its balance, followed by Ecobank.<br />
157. The total balance of the sole financial institution was estimated at CFAF 8,363 million at the end<br />
of December 2008, with collected deposits of 375 million and loans granted amounting to CFAF 7,243<br />
million.<br />
The rate of bankarization seems low in Benin (about 6%, like the other WAEMU member-States.<br />
158. The WAMU Council of Ministers decided, at its Ordinary Session of 17 September 2007, to<br />
increase the minimum equity applicable to banks to CFAF 10 billion and financial institutions to 3 billion.<br />
159. By Notice 01/2007/RB of 2 November 2007, the BCEAO clarified this Decision in the following<br />
terms:<br />
� “The minimum equity was initially fixed at 5 billion for banks and 1 billion for financial<br />
institutions, from 1 st January 2008. Banks and financial institutions in activity should comply with<br />
these new ceilings latest by 31 December <strong>2010</strong>;<br />
� The new ceilings are applicable to requests for authorization to operate as a bank or financial<br />
institution submitted from the date of entering into force of the measure;<br />
� Banks and financial institutions already authorized are requested to communicate to the Minister<br />
of Finance, the BCEAO and the WAMU Banking Commission, within six (6) months starting<br />
from 1st January 2008, an action plan and a time-table, indicating measures to be taken by chief<br />
executives in this first phase, in order to eventually comply with the minimum equity rules”.<br />
160. In its 2008 Annual Report, the Banking Commission classified lending institutions into two<br />
categories, according the level of compliance with the new regulatory minimum equity requirements:<br />
- First category Institutions, representing 45.6% of the total bank assets of the WAEMU zone and<br />
of which attention is drawn, in particular to the consideration in their financial strategy of the<br />
minimum capital ceilings of 10 and 3 billion targeted in the second phase.<br />
- Second category institutions under close supervision for adopting solutions to ensure compliance<br />
with the new minimum equity requirements should specify the strategies adopted, including<br />
merging of institutions or even their take-over by investors.<br />
161. Deposits collected by banks amounted to CFAF 941,249 million as at 31 December 2008,<br />
compared to 803,600 at the end of December 2007, representing an increase of 17.12%. The trend in<br />
fixed-term deposits shows an increase of 12.24%, which amounted to CFAF 449,788 million, and 21.98%<br />
with a level of 491,461 million at the end of December 2008 for call deposits.<br />
29
162. Loans distributed by banks as at the end of December 2008 amounted to CFAF 688,642 million,<br />
comprising short-term loans (CFAF 386,265 million), medium-term loans (CFAF 220,282 million), longterm<br />
loans (CFAF 18,521 million) and CFAF 15 million for financial lease and similar instruments.<br />
163. These loans mainly served to finance the following branches of activity: whole sale and retail<br />
trade, restaurants (CFAF 278,926 million), services provided to the community (CFAF 184,927 million),<br />
manufacturing industries (CFAF 47,062 million), transport, warehousing and cargo handling (CFAF<br />
43,850 million), civil works (CFAF 40,051 million). To a less extent the electricity, gas and water,<br />
agriculture, forestry and fisheries, insurance and real estate sectors were also financed by the banks.<br />
164. As at 31 December 2008, there were still unpaid loans, amounting to CFAF 63,559 million as<br />
against CFAF 50,982 million for the previous year.<br />
165. Presently, the twelve commercial banks established in Benin are working hard to extend their<br />
network of branches in the city of Cotonou and the other departments of the country. For example,<br />
Continental Bank-Benin, in the month of July 2007, increased the number of its functional agents to ten<br />
with the opening of 4 new branches at Akpakpa, Cadjèhoun, Porto-Novo and Ouidah. Like it, all the<br />
commercial banks in Benin are strengthening their development potential, not only in terms of opening<br />
new branches, but also introducing new bank products on the market. Their efforts in the field to conquer<br />
new market shares resulted in a 16.5% increase in their total resources in 2008, as compared to 2007.<br />
166. Lending institutions (banks and financial institutions) are governed both by the common laws of<br />
commercial companies defined by a supranational body, the Organization for Harmonization of Business<br />
Law in Africa (OHADA) and by Framework Law 90-018 of 27 July 1990 on banking regulation in the<br />
Republic of Benin, called the Banking Act. These texts fix, in particular the rules governing their<br />
constitution, functioning and dissolution. They contain no specific provision on Anti-Money Laundering<br />
and Combating the Financing of Terrorism.<br />
167. Article 3 of the Banking Act of Benin acknowledges as banks, “businesses that have as their usual<br />
profession to receive funds, which may be accessed by cheques or transfers and which they use, for their<br />
own account or for the account of others, in credit or investment operations”.<br />
168. As for financial institutions, they are defined in Article 4 of the same act as “natural or legal<br />
persons that have made it their usual profession to carry out, for their own account, credit, sale on credit or<br />
exchange activities, or that usually receive funds, which they use for their own account in investment<br />
transactions, or that usually operate as intermediaries such as commission agents, brokers, or otherwise in<br />
all or part of these transactions”.<br />
169. The Banking Act does not consider as banks or financial institutions, insurance companies,<br />
pension institutions, foreign exchange agents, notaries and officers of justice who exercise the relevant<br />
functions.<br />
170. Article 5 of the Banking Act defines as credit operations, “lending, discount, repurchase, loan<br />
acquisition, guarantees, funding of credit sale and sale on credit operations; and as investment operations,<br />
equity participation in existing businesses or under creation and all acquisition of securities issues by<br />
public or private persons”.<br />
30
171. No electronic money institution authorized by the Central Bank of West African States has been<br />
established since the entering into force of the BCEAO Instruction on, in particular the conditions of<br />
creation of this type of financial entity.<br />
172. The control of activities of lending institutions is within the competence of the BCEAO, the<br />
Banking Commission and the Ministry of Finance.<br />
173. Documentary controls are carried out by both the BCEAO and the Banking Commission,<br />
particularly concerning compliance with implementation of the Bank Chart of Accounts, the banking<br />
conditions and prudential ratios. There too, the issue of anti-money laundering and financing of terrorism<br />
is not subjected to systematic control.<br />
174. Seven (7) banks received a general auditing onsite mission from the WAMU Banking<br />
Commission in 2008. The recommendations of these missions concern mainly corporate governance,<br />
business strategy and plan, information and accounting system, quality of the portfolio and risk<br />
management, financial situation and prudential ratios. On the other hand, it contains no aspect regarding<br />
the control of anti-money laundering measures.<br />
175. The Decentralized Financial Systems (DFS) are the main actors of the microfinance sector.<br />
These institutions offer proximity (financial and non-financial) services to population groups who find it<br />
difficult to obtain bank loans to fund their economic activities.<br />
176. The Government of Benin has also instituted a Pro-Poor Micro Credit programme (MCPP), which<br />
consists in introducing small loans (a maximum of CFAF 30,000 per beneficiary, at an annual interest rate<br />
of 5%) to poor population groups. Launched on 27 February 2007 and financed by the National<br />
Microfinance Fund, this programme is implemented through technical partners, with a total equity of<br />
CFAF 25 billion. In this regard, the Millennium Account Challenge (MAC), a US Government financial<br />
aid programme, comprises a component on "Financial Services Project", in the sum of about 20 million<br />
dollars. One of the objectives of the project is to improve the surveillance of Microfinance Institutions<br />
(MFIs).<br />
177. In this regard, the mission was informed that the controls made by the Control and Surveillance<br />
Unit for Decentralized Financial Systems (CSDFS) on MFIs are partly financed with these funds.<br />
178. The main actors registered in the sector are: FECECAM, PADME, PAPME, VITAL FINANCE,<br />
FINANDEV, ASSEF, CPEC, CFAD, UNACREP, MDB, RENACA (CBDIBA) and PEB Co<br />
(BETHESDA). These actors operate from three hundred and forty-seven (347) service points on the entire<br />
national territory.<br />
179. Deposits collected by the DFS as at 31 December 2008 amounted to CFAF 47,877 million. On<br />
that same date, outstanding loans amounted to CFAF 59,012 million. Resources mobilized by the DFS<br />
from the banking system amounted to CFAF 11,451 million, mainly by three structures, which obtained<br />
bank loans to the tune of CFAF 11,451 million. Bad debts in the sector stood at CFA 4,270 million as at<br />
the end of December 2008.<br />
31
180. To accompany DFS in their loan recovery actions, a National Commission for Recovery of Loans<br />
from microfinance institutions was created by Presidential Decree 2006-480 of 30 October 2007. This<br />
Commission was installed on 14 August 2008, but as at 31 December 2008, had no operational structure.<br />
181. During the year 2008, several difficulties were noted in the DFS sector, in particular:<br />
� Governance problems that prevent these institutions from achieving their objectives;<br />
� Unfair competition that institutions operating outside the law meet out to their authorized<br />
sister-institutions;<br />
� Low performance of the information system of DFS, making it impossible to inform managers<br />
on the strategic choices to be made in the improvement of the performances of their<br />
institutions;<br />
� High costs associated with the implementation of guarantees by the DFS;<br />
� Lack of medium and long-term resources that would enable DFS to grant loans for similar<br />
periods.<br />
182. Controls were made during the year 2008 in the DFS sector by the Control and Surveillance Unit<br />
for Decentralized Financial Systems (CSDFS). These documentary and onsite controls also concerned<br />
analysis of operation authorization dossiers. During the fourth quarter of 2008, thirty-one (31) audit<br />
missions were conducted, but none of them concerned anti-money laundering and financing of terrorism.<br />
183. Postal financial services are governed by the AML Act. In Benin, the Société La Poste du Benin,<br />
a private law company, with the State as sole shareholder, carries out financial activities (Savings,<br />
Transfer). Its clientele is mainly composed of salaried workers, especially of the public sector (civil<br />
servants and government agents or Local Communities).<br />
184. The Post Office proposes savings products with a minimum deposit of ten thousand (10,000) CFA<br />
francs and a maximum of five (5) million CFA francs for natural persons but increased to twenty-five (25)<br />
million for legal persons.<br />
185. In the area of transfers, it signed representation contracts with Money Express and Western Union<br />
sub-representation with Ecobank. An individual ceiling of four (4) million CFA francs per week was fixed<br />
for the transmission and reception of transfers.<br />
186. The Postal Service in Benin is placed under the responsibility of the Ministry of Communication<br />
New Information Technologies. By virtue of its statutes, it is subjected to the double control of the<br />
General State Inspectorate and the Chamber of Accounts of the Supreme Court. The mission could not<br />
obtain the elements on the content and frequency of the controls made but which, according to information<br />
collected onsite, did not concern compliance with the obligations set forth in the AML Act.<br />
187. A Fonds de Dépôts et Consignations exists but the mission could not get a copy of the texts<br />
concerning its creation and functioning. According to the information received orally, the Fund was<br />
constituted with deposit accounts with the Treasury for the benefit of projects funded by the State and<br />
donor agencies. The Fund also contains accounts on which are deposited small amounts representing<br />
32
salary or pension disputes or sureties paid. Risks of money laundering concerning public accounts are<br />
virtually non-existent.<br />
188. There is also a Caisse Autonome d’Amortissement (CAA) but the mission did not obtain<br />
information on the conditions of its creation nor its functioning. The risks of laundering funds held by this<br />
bank are low for the same reasons as those given by the Caisse de Dépôt et Consignations.<br />
189. The Insurance Sector is constituted by general insurance companies, insurance and reinsurance<br />
brokers, whose activities are controlled at the national level by the Insurance Supervision Department of<br />
the Ministry of Economy and Finance, and regulated by a supra-national organization, the Inter-African<br />
Conference of Insurance Markets (CIMA). There is risk of money laundering in this sector, even if, in<br />
practice, discussions with the ASA-Bénin and insurance companies indicated that the AML/FT risk is not<br />
high because of the marginal number of life insurance contracts subscribed and the individual amounts<br />
guaranteed.<br />
190. Insurance companies established in Benin cover two main insurance branches, namely: Fire,<br />
Automobile and Various Risks (IARD) and Life Insurance. At the end of December 2008, twelve (12)<br />
insurance companies were regularly established in Benin. Five (5) intervene in the IARD field (Africaine<br />
des Assurances, NSIA Benin, FEDAS, GAB, AGF-<strong>BENIN</strong> and SAARB), and seven (7) in the Life<br />
Insurance branch (UBA VIE, ARGG, COLINA VIE <strong>BENIN</strong>, AVIE, NSIA VIE <strong>BENIN</strong>, SADES and<br />
AFRICAINE-VIE).<br />
191. As at 31 December 2008, the provisional turnover of all the insurance companies amounted to<br />
CFA 28,873 million as against CFA 25,717 million in 2007. This level of business is divided between the<br />
two branches as follows: IARD CFA 21,630 million and VIE CFA 7,243 million.<br />
192. The Council of Ministers of Insurance (CMA), established by Regulation<br />
001/CIMA/PCMA/PCE/SG/2007 stipulates that insurance companies and mutual insurance companies<br />
should have a minimum equity of CFA 1,000 million and an establishment fund of CFA 800 million. A<br />
period of three (3) years was given to companies whose equity or establishment fund is below the new<br />
amount retained to comply with the Guideline. The period ends on 03 April <strong>2010</strong>.<br />
193. There is a Regional Stock Market for all WAEMU member-States, comprising two poles:<br />
� A public pole, constituted by the Regional Council of Public Savings and Financial Markets<br />
(CRPMF) representing the general interest in charge of guaranteeing the security and integrity of<br />
the market and exercising authority over the actors;<br />
� A private pole, constituted by the Regional Stock Market (BRVM) and the Central<br />
Depositor/Settlement Bank (DC/BR) having a status of specialized financial institutions exempted<br />
from the Banking Act and enjoying exclusively a public service concession on the entire UEMOA<br />
space. The Headquarters of these Institutions are based in Abidjan, but the BRVM, has national<br />
branches in each member-State of the Union.<br />
194. The BRVM and the DC/BR are structures of the market. The other actors are Commercial<br />
Operators (Management and Intermediation Companies (SGI), Wealth Management Companies (SGP),<br />
Business Finders (BFs) and Soliciting Dealers<br />
33
195. As at 31 December 2008, there were four (4) management and intermediation companies<br />
operating in Benin, namely SGI <strong>BENIN</strong>, AFRICABOURSE <strong>BENIN</strong>, ACTIBOURSE and BFS. The<br />
Management and Intermediation Companies (SGI), constituted into business corporations, are mainly<br />
involved in negotiation of securities on the stock market for the account of their customers. Incidentally,<br />
they also carry out management activities under mandate, operate as Investment Advisers.<br />
1.4 OVERVIEW OF THE DESIGNATED NON-FINANCIAL BUSINESSES AND<br />
PROFESSIONS (DNFBP) SECTOR<br />
196. The Beninese authorities estimate as low the risk of terrorist financing and have not embarked on<br />
an analysis of the legislation in force applicable to actors of the DNFBP sector, particularly associations<br />
and NGOs, nor conducted a specific studies to assess the vulnerability of the sector to this risk.<br />
197. Moreover, in the absence of transposition into the national law of the WAEMU Guideline on<br />
CFT, and whose article established developments in the OBNL, there is no provision in terms of control<br />
and regulation of NGOs, which could be misused for purposes of financing of terrorism by virtue of their<br />
activities.<br />
198. Regarding DNFBPs, among the actors subject by law to the AML obligations, they noted the<br />
existence of:<br />
i. Casinos: there are currently two (2) casinos in activity. Their opening and exploitation are<br />
regulated by Inter-ministerial Order 078/MISAT/MF/MCAT/DC/DAI of 02/06/97. The<br />
activity is marginal and functions mainly when tourists and businessmen visit Benin. Contrary<br />
to the Benin National Lottery, whose activities constitute state monopoly, games in casinos<br />
are like gambling granted by the State. There is very little control over the sector, which<br />
contributes to make them a likely place for money laundering.<br />
ii. Estate agents: their exact number is unknown and their activity is neither defined nor<br />
regulated.<br />
iii. Real Estate agents: (their subjection to the AML Act is not explicit), who are professionals in<br />
real estate, carrying out activities with great credit standing; huge government projects. They<br />
are few in number and placed under the authority of the Ministry of Urban Planning, Habitat,<br />
Land Reform and Coast Erosion Control.<br />
iv. Lawyers: There are 150 of them in Benin and their profession is regulated by the Act of 29<br />
April 1965 instituting the Beninese Bar, By-laws of the Bar Association and the Decree of 23<br />
January 1988 on organization of the Certificat d'Aptitude à la Profession d'Avocat (CAPA).<br />
They are under the control of the Bar Council, sitting as the Discipline Council with<br />
jurisdiction to prosecute and punish, as a disciplinary measure, offences committed by<br />
Lawyers registered at the Bar and on the internship list. They are under the authority of the<br />
Ministry of Justice.<br />
v. Notaries: There are 25 of them and appointed by decree passed in Cabinet on the proposal of<br />
the Keeper of the Seals, Minister of Justice after opinion of the Commission in charge of<br />
expressing opinions or making recommendations on the location of notary offices, according<br />
to the needs of the public, the geographical situation and the demographic and economic<br />
trends. They are public officers of court instituted to receive all deeds and contracts which the<br />
parties should and wish to establish as authentic deeds issued by the Public Authority. They<br />
34
are in charge of ensuring the date of these deeds and contracts, to conserve the registration<br />
and issue engrossed copies and official copies.<br />
Public Accountants and Chartered Accountants: Their profession is regulated by Act 2004-<br />
033 of 27 April 2006 on creation of the Ordre des Experts Comptables et Comptables Agréés<br />
in the Republic of Benin (OECCA-Benin), which has 71 members. The Public Accountant<br />
has jurisdiction to verify, appreciate, review and adjust the accounts of businesses and<br />
agencies to which it is not linked by an employment contract, certify the regularity and<br />
sincerity of the synthesis financial statements required from businesses under the legislative<br />
and regulatory provisions in force, finally conduct accounting and financial audits.<br />
The AML Act used the term “Statutory Auditors” but it appears practically that access to this<br />
profession necessarily depends on qualification as a Public Accountant.<br />
vi. Non-Governmental Organizations, governed by the 1901 Act on Associations, grouped as a<br />
Collective.<br />
vii. Dealers in precious metals and precious stones, whose exact number is not known.<br />
viii. Money Courier Companies.<br />
1.5 OVERVIEW OF COMMERCIAL LAWS AND MECHANISMS APPPLICABLE TO<br />
LEGAL PERSONS AND ARRANGEMENTS<br />
199. The OHADA Uniform Act, related to the Right of Commercial Companies and Economic Interest<br />
Groups, which came into force on 1 st January 1998, sets forth all the rules governing, in particular, the<br />
legal form of commercial companies and EIGs.<br />
In this regard, the different possible legal forms of commercial companies are:<br />
- General Partnership;<br />
- Partnership with Stakeholders;<br />
- Limited Liability Company;<br />
- Business Corporation;<br />
- Joint Venture;<br />
- Economic Interest Group.<br />
200. These legal persons should request for their registration within the month of their constitution,<br />
with the Trade and Personal Credit Registry (RCCM) at the registry of the Jurisdiction where its<br />
headquarters is based.<br />
201. The application should mention the following:<br />
� Corporate name;<br />
� Eventually, trade name, acronym or sign;<br />
� Activity or activities carried out;<br />
35
� Form of company or legal person;<br />
� Amount of equity with indication of the amount of cash contributions and evaluation of the<br />
contributions in kind;<br />
� Address of the headquarters, and eventually, that of the main establishment and of each of the<br />
other establishments;<br />
� Life time of the company or legal person as fixed by its statutes;<br />
� Surnames, first names and personal residence of the partners held indefinitely and personally<br />
liable for partnership debt, with indication of their date and place of birth, their nationality, the<br />
date and venue of their marriage, the matrimonial regime adopted and restrictive clauses<br />
opposable to third parties of the free disposal of the property of the spouses or the lack of<br />
clauses as well as the requests in separation of property;<br />
� Surnames, first names, date and place of birth, and residence of the managers, executive<br />
directors or partners having the general power of engaging the company or the legal person;<br />
� Surnames, first names, date and place of birth, and residence of the auditors, when their<br />
designation is provided for in the Uniform Act on the right of commercial companies and<br />
economic interest groups.<br />
202. It is important to underline that the Uniform Acts are of direct implementation and are imperative,<br />
notwithstanding all contrary provisions of national law.<br />
1.6 OVERVIEW OF THE STRATEGY TO PREVENT MONEY LAUNDERING AND<br />
THE FINANCING OF TERRORISM<br />
1.6.1 AML/FT strategies and priorities<br />
203. The mission noted a general awareness, on the part of the national authorities, of the harmful<br />
effects of ML/FT and a strong political will to curb these scourges. But, it did not observe the existence of<br />
a national control strategy, organized into programmes and action plans with clearly defined priorities.<br />
204. It should be noted that in the framework of the AML/FT, Benin is party to universal international<br />
conventions (Vienna, Palermo, New-York, Merida Conventions under the aegis of the United Nations) or<br />
regional conventions (OAU Conventions and later the African Union and ECOWAS Conventions).<br />
205. Community Guideline 07/2002, adopted by the WAEMU Council of Ministers on 19 September<br />
2002, instituted anti-money laundering in the West African sub-region. Indeed, on the proposal of the<br />
BCEAO, a Uniform Act was adopted on 20 March 2003 by the Council of Ministers for:<br />
� Facilitating adoption of anti-money laundering acts in each member-State of the Union, and<br />
� Ensuring harmonization of the general principles in member-countries of the Zone.<br />
206. In application of the community provisions, Act 2006-14 of 31 October 2006 on anti-money<br />
laundering in Benin (AML Act) was promulgated, thus ensuring the transposition of the above-mentioned<br />
36
Guideline into the national law of Benin. However, it seems the annex to the Act does was not adopted by<br />
the National Assembly.<br />
207. The AML Act is the main reference framework of the strategy of the Beninese Government for<br />
combating money laundering.<br />
208. This act came to complete initiatives taken at the sub-regional level by ECOWAS (fight against<br />
laundering of money derived from drug trafficking, in particular with the creation of <strong>GIABA</strong> in 1999) and<br />
by WAEMU as mentioned above.<br />
209. This act is implemented through several initiatives, namely:<br />
- Decree 2006-752 of 31 December 2006 on creation, attribution, organization and functioning of<br />
the National Financial Information Processing Unit (CENTIF);<br />
- Decree 2008-248 of 07 May 2008 on appointment of members of CENTIF;<br />
- The offer of a secured building to host the headquarters of CENTIF;<br />
- The provision of a budget for the functioning and equipment of CENTIF;<br />
1.6.2 Institutional AML/FT Framework<br />
210. Per Decision A/DEC/9/12/99, the Conference of ECOWAS Heads of State and Government<br />
created the Inter-governmental Action Group against Money Laundering in West Africa (<strong>GIABA</strong>), having<br />
as a mission, in particular, to protect financial and banking systems of member-States against crime<br />
money and ensure the adoption, in a harmonized and concerted manner, appropriate measures for<br />
combating money laundering. This mission was extended in 2006 to combating the financing of terrorism.<br />
Having acceded to FAFT-Type Regional Organization (ORTG), <strong>GIABA</strong> proceeded, on the basis of its<br />
statutes, reviewed, in particular the evaluation of the AML/FT System of its member-States, regarding the<br />
FATF Recommendations as well as the relevant norms and standards. <strong>GIABA</strong> also conducts typology<br />
studies on ML/FT. Mutual evaluation reports and typology studies are available on the web site<br />
(giaba.org).<br />
211. At the national level, an Inter-ministerial Anti-Money Laundering Committee has been<br />
instituted on the recommendation of <strong>GIABA</strong>. Created in 2007, this Committee is composed of<br />
representatives from Ministries of Justice and Security. It holds meetings (a total of 5 since its creation).<br />
212. The mission met members of the Committee who informed it that the Committee’s programme of<br />
actions included the development of a global AML/FT strategy at the national level in the form of a<br />
national AML/FT programme. Furthermore, collaboration ties have been established with CENTIF since<br />
the establishment of the latter, particularly in terms of sensitization and training of the actors of the<br />
AML/FT mechanism.<br />
Agencies of the Financial Sector<br />
37
- Ministries or agencies responsible for issuing authorizations, registrations or other<br />
authorizations to financial institutions<br />
213. Pursuant to Article 12 of the Convention on creation of the Banking Commission of the West<br />
African Monetary Union, authorizations are granted to banks and financial institutions by decree of the<br />
Minister of Finance on the recommendation of the Banking Commission.<br />
- National Regulation, Responsible and Control Authorities of Financial Institutions<br />
Ministry of Finance<br />
214. It is the Ministry of Finance that is mainly in charge of the AML dossier at the national level. By<br />
virtue of the Anti-Money Laundering Act, the CENTIF, placed under the authority of the Ministry of<br />
Finance, constitutes the core of the AML system in Benin.<br />
Directorate of Monetary and Financial Affairs<br />
215. In accordance with the provisions of Order 1188/MF/DC/SGM/DA on Attributions, Organization<br />
and Functioning of the General Treasury and public Accounts Directorate (DGTCP), the Department of<br />
Monetary and Financial Affairs (DAMF) ensures:<br />
- The management of the public treasury;<br />
- The analysis and financial syntheses in collaboration with the general directorate of economic<br />
affairs;<br />
- The search for public funding;<br />
- The issue and negotiation of government papers;<br />
- Equity participation and management;<br />
- The follow-up of problems associated with the balance of payments;<br />
- The determination and monitoring of the exchange policy;<br />
- The follow-up of enterprises of the public and semi-public sector;<br />
- The relations with banks;<br />
- The monitoring of the amortization of the public debt (outside the scope of the caa);<br />
- The study of macro-economic aggregates in liaison with the economic forecasting directorate.<br />
� The directorate of monetary and financial affairs is sub-divided into four offices:<br />
- The treasury and budget affairs office (btab);<br />
- The debt and financing office (bdf);<br />
- The money and credit office (bmc);<br />
- The office of international financial relations (brfi).<br />
38
216. The BTAB is in charge of: the management of the government treasury, the analysis of financial<br />
syntheses, the monitoring of enterprises of the public and semi-public sector, the study of macro-economic<br />
aggregates in liaison with the DPC.<br />
217. The BDF is in charge of the search for public funding, the issue and negotiation of government<br />
papers and equity management.<br />
218. The BMC is in charge of monitoring primary banks and financial establishments and ensuring, in<br />
relation with the BCEAO, the respect of the banking regulation.<br />
219. The BRFI ensures the monitoring of the exchange policy and preparation of balance of payments<br />
in liaison with the BCEAO.<br />
220. At the national level, it is the DAMF that is in charge of supporting the policy of the Regional<br />
public Savings and Financial Markets Council, a body of the West African Monetary Union, created on 3<br />
July 1996 by decision of the WAEMU Council of Ministers and whose headquarters is based in Abidjan<br />
(Côte d'Ivoire).<br />
221. The CREPMF ensures the protection of the savings invested in securities and in any other<br />
investment entailing public offering on the entire territory of the West African Monetary Union.<br />
222. On that basis, it is solely empowered to:<br />
� Regulate and authorize, through the issue of a certificate, public offering procedures through<br />
which an economic agent issues securities or offers investment products within the Union,<br />
whether or not the latter are listed on the Regional Stock Market;<br />
� Formulate, eventually, a veto on the issue and investment by public offering of new financial<br />
products that can be traded on the stock market.<br />
� Empower and control all the intermediaries of the market. To that end, it approves the<br />
Regional Stock Market, the Central Depository/Control Bank as well as commercial actors:<br />
management and intermediation companies, wealth management companies, business finders,<br />
consultants in securities and canvassers;<br />
� Authorize agents of private structures to engage in stock trading, through the issue of<br />
professional cards.<br />
Directorate of Insurance<br />
223. The Directorate of Insurance was initially created by Decree 88-528 of 29 December 1988. Since<br />
then, several amending legislations have been issued by the competent Authority. It is today, by virtue of<br />
Order 098/MFE/DC/SGM/DGE of 1st March 2006, an operational department of General Directorate of<br />
the Economy. But, in the framework of the execution of its attributions, it is subjected to the provisions set<br />
forth in Annex II of the Treaty of the Inter-African Conference of Insurance Markets (CIMA), which lays<br />
down the attributions of National Insurance Directorates.<br />
39
224. Hence, like all the National Insurance Directorates of ICIM member-countries, an integration<br />
institution of the insurance sector in the zone, the Insurance Directorate of Benin serves as a relay for the<br />
action of the Regional Insurance Supervision Commission (CRCA), supranational body for regulation of<br />
insurance markets in the zone.<br />
225. Pursuant to Order 098/MFE/DC/SGM/DGE of 1st March 2006 aforementioned, the Insurance<br />
Directorate comprises the following departments:<br />
� Regulation and Litigation Department (SRC);<br />
� Research and Control Department (SEC);<br />
� Cooperation Department;<br />
� Professional Insurance Training Centre.<br />
226. Apart from these departments, the Directorate has an Administrative Secretariat and an<br />
Accountant for the accomplishment of its missions.<br />
227. To execute its attributions, the Insurance Directorate uses a body of sworn Insurance controllers.<br />
228. The Insurance Directorate is the structure that handles the different insurance issues in the Public<br />
Administration. In that regard, it is in charge of:<br />
� the conception and surveillance of the application of the national regulation in the area of<br />
insurance;<br />
� the study and proposal to the Government of all measures likely to ensure and complete the<br />
promotion of the national insurance market;<br />
� the representation of the State within international cooperation agencies in the area of insurance;<br />
� the management of the Insurance Professional Training Centre (CPFA) of Benin, a decentralized<br />
pedagogical unit of the International Insurance Institute (IIA) of Yaounde;<br />
� the exercise of the oversight role of the Ministry of Finance over the insurance sector;<br />
� encouraging the insurance sector to increase its participation in national economic development.<br />
Surveillance Unit for Decentralized Financial Systems –CSDFS-<br />
229. The WAEMU regulation granted to the Monetary and Financial Authority of each member-State,<br />
i.e. the Ministry of Finance, prerogatives for supervision of the Decentralized Financial Systems.<br />
230. In Benin and most countries of the zone, the Ministry of Finance has established a Microfinance<br />
Monitoring Unit, in charge of documentary and onsite audit of DFS.<br />
Ministry of Microfinance<br />
40
231. The mission of the Ministry of Microfinance and Youth and Women Employment, created in<br />
2006, is to propose and implement government policies in the areas of microfinance, promotion of small<br />
and medium enterprises and employment. This Ministry lightens the task of the Ministry of Finance, but<br />
especially prevents it from playing the double role of judge and defendant, of regalia trusteeship and<br />
support of the microfinance sector.<br />
232. The high growth of the sector and the difficulties encountered by the national monetary authorities<br />
in the implementation of the 1993 Regulation compelled the WAEMU Council of Ministers to review the<br />
first distribution of supervision tasks in 2007 in order to further involve the BCEAO and the Banking<br />
Commission. The entire sector and some institutions in particular had indeed attained a critical volume of<br />
activity, which gave them some importance in the systemic balance of the region, thus justifying the<br />
intervention of the regional authorities. In particular, the new 2007 Act, not yet adopted by Benin,<br />
proposes to set a ceiling for a volume of activities beyond which the BCEAO automatically assumes the<br />
role of oversight institution: “The Central Bank and the Banking Commission shall proceed, after<br />
information from the Minister, to control any decentralized financial system whose level of activities<br />
attains a ceiling to be determined by instruction from the Central Bank”. This Instruction had not yet been<br />
published by the BCEAO as of June 2009, and the ceiling is yet to be determined.<br />
233. During the discussions, the Officials met informed the mission that they were not aware of the<br />
existence of the AML Act. Cooperation ties exist with the Ministry of Finance, which is in charge of<br />
supervising DFS. In this regard, the reports of the onsite mission prepared by the said Ministry are<br />
transmitted to the MMF, which provides support to the DFS for implementation of the Recommendations<br />
of these reports.<br />
Ministry of Commerce, Cottage Industry and Tourism<br />
234. The Ministry of Commerce, Cottage Industry Tourism is in charge of the implementation of the<br />
general policy of the State in the commercial, cottage industry and tourist sectors. It has jurisdiction to<br />
issue, in particular to Travel Agencies, authorization to exercise their commercial activities.<br />
Ministry of Interior<br />
235. The Ministry of Interior and Public Security is in charge of internal security on the entire national<br />
territory and, in that regard, ensures the protection of people and property. In collaboration with the<br />
Ministry of Defence and the other Ministries intervening in the economic and financial sector, it is in<br />
charge of protecting the national economy against smuggling, fraudulent imports and other economic and<br />
financial crimes.<br />
236. The Minister of Interior has authority over the Police apart from the exercise of the Judicial Police<br />
for which police officers, particularly Judicial Police Officers (JPO) report to the State Prosecutor. It has<br />
at its disposal the National Gendarmerie for administrative police activities, maintenance of law and order<br />
and the judicial police.<br />
237. Within the General Directorate of the National Police has been created the Economic and<br />
Financial Brigade (BEF), placed under the authority of the Judicial Police Directorate (DPJ), responsible<br />
for conducting extensive investigations on economic and financial crimes and offences. Even before the<br />
41
advent of the Uniform Act on Anti-money Laundering and Financing of Terrorism, a ministerial decree<br />
entrusted to the BEF the prerogative of receiving suspicious transaction reports from banks in order to<br />
combat fraud and money laundering, even if the latter offence was only criminalized in the case of illicit<br />
trafficking of narcotic drugs and psychotropic substances.<br />
238. The Ministry of Interior, through the gambling services and in collaboration with the Ministries of<br />
Commerce and Economy and Finance, supervises gambling houses and casinos. There are three casinos<br />
on the entire national territory, two of which are functional. These casinos are all established in Cotonou,<br />
the economic Capital.<br />
Ministry of Justice, Legislation and Human Rights<br />
239. Decree 2007-491 of 02 November 2007 on attributions, organization and functioning of the<br />
Ministry of Justice, Legislation and Human Rights sets forth the institutional framework of the said<br />
ministry. In accordance with this decree, the Ministry is headed by the Keeper of the Seals, Minister of<br />
Justice, Legislation and Human Rights. It is the depository of the seals and armouries of the State and<br />
Head of Administrative Services of the Justice Department. The mission of this Ministry is to:<br />
- Propose to Government the national and international state policy in the area of justice as well as<br />
the Administration of Justice, prison services and correctional education, to conduct and monitor<br />
the implementation of policies adopted by the Government;<br />
- Suggest to Government, on its initiative or in concert with other ministerial departments, an<br />
appropriate legislation policy;<br />
- Conduct and ensure efficient execution of the national human rights policy defined by<br />
Government.<br />
240. To ensure efficient functioning, the Ministry comprises Services directly attached to the Minister,<br />
namely the Office of the Minister, the General Secretariat of the Ministry, the Central Departments, the<br />
Technical Departments, the Appeal Courts and Tribunals, External Services, the Commissions and<br />
Committees under its control.<br />
241. The judicial authority is guaranteed by the Constitution and according to Act 2001-37 of 27<br />
August 2002 on Judicial Organization in the Republic of Benin, it is exercised by the Supreme Court,<br />
Courts and Tribunals created in accordance with the Constitution. Benin has one Supreme Court, based in<br />
Cotonou (at the time of the visit, the authorities were preparing to transfer it to Porto-Novo); three (3)<br />
Appeal Courts in Cotonou, Abomey and Parakou; eight (8) Courts of First Instance and Conciliation<br />
Tribunals instituted per district in towns with specific status (Art. 21 of the Act).<br />
Ministry of Foreign Affairs<br />
242. The Ministry of Foreign Affairs was created in Benin by Decree 387 of 30 December 1960. Its<br />
name has been changed several times over the years as well as its attributions, organization and<br />
functioning.<br />
42
243. Today, it is called the Ministry of Foreign Affairs, African Integration, Francophonie and<br />
Beninese Abroad, and is governed by Decree 2007-653 of 31 December 2007. Under this Decree, the<br />
Ministry of Foreign Affairs is “in charge of the implementation of the Government’s foreign policy, the<br />
conduct of international bilateral and multilateral cooperation, coordination at the international level of<br />
decentralized cooperation, promotion and management of African integration, promotion of francophonie,<br />
protection of Benin’s interests abroad and those of Benin nationals abroad”.<br />
244. The International Organizations Department is one of the technical departments of this Ministry.<br />
It is in charge of “handling and monitoring issues relating to Benin’s participation in activities of the<br />
United Nations as well as its specialized agencies and other universal international organizations”. In that<br />
regard, it deals in particular with the ratification of UN conventions on the fight against financial crime<br />
and monitors the implementation of the operational activities and resolutions of the Security Council, in<br />
collaboration with the national structures concerned.<br />
OPERATIONAL AGENCIES AND CRIMINAL JUSTICE<br />
National Financial Information Processing Unit (CENTIF)<br />
245. CENTIF was established in 2009. It is an administrative service, endowed with financial<br />
autonomy and autonomous decision-making power on issues that fall within its jurisdiction. Its mission is<br />
to collect and process financial information on money laundering networks. In this regard, it:<br />
- Is in charge, in particular, of receiving analyzing and processing information for the purpose of<br />
establishing the origin of transactions or the nature of operations that have been the subject of<br />
suspicious reports imposed on persons subject to the act;<br />
- Also receives all other useful information, necessary for accomplishing its mission, in particular,<br />
those communicated by the control authorities, as well as judicial police officers;<br />
- May request for the disclosure, by persons subject to that act, as well as by all natural and legal<br />
persons, information held by them and which are likely to help enrich suspicious transaction<br />
reports;<br />
- Conducts or ensure the conduct of periodic studies on the trend of the techniques used in money<br />
laundering on the national territory.<br />
246. It expresses views on the implementation of government policy on anti-money laundering. In that<br />
regard, it proposes all necessary reforms for enhancing the effectiveness of the fight against money<br />
laundering.<br />
247. It prepares periodic reports (at least once per semester) and an annual report, which analyze the<br />
trend of anti-money laundering activities at the national and international levels, and evaluates the reports<br />
collected. These reports are then presented to the Minister of Finance.<br />
Investigation and Criminal Proceedings Authorities<br />
43
248. The criminal proceedings authorities in charge of appropriate investigations on money laundering<br />
and financing of terrorism offences are those of common law set out in the Code of Criminal Procedure.<br />
By virtue of the provisions of the Code of Criminal Procedure, the judiciary police are in charge of<br />
searching for and observing violations of the criminal law, as long as an inquiry is not opened. It is<br />
exercised under the Direction of the State Prosecutor. Within the competence of the Appeal Court, it is<br />
placed under the supervision of the State Prosecutor and under the control of the Grand Jury.<br />
249. Gendarmerie Officers and Non-Commissioned Officers, in particular, are considered as Judicial<br />
Police Officers (JPOs) performing the functions of Brigade Commander, Commissioners, and Police<br />
Inspectors. Judicial Police Officers are soldiers from the Gendarmerie and members of the Police forces<br />
when they do not have the quality of JPO.<br />
250. The Principal State Prosecutor represents the State Prosecutor at the Appeal Court and the Court<br />
of Assizes. He is in charge of ensuring the application of the criminal law within the scope of competence<br />
of the Appeal Court and has authority over all the Attorneys within the competence of the Appeal Court.<br />
251. The State Prosecutor represents in person or through his deputies the Principal State Prosecutor at<br />
the Courts of 1 st Instance. He receives complaints and denunciations and assesses the follow-up actions to<br />
be taken. He carries out, or ensures the carrying out of, all necessary actions for the research and<br />
prosecution of violations of the criminal law.<br />
Competent Judicial Authorities<br />
252. The judicial authority comprises magistrates of the State Prosecutor’s Office and headquarters.<br />
Responsibility for investigation and prosecution of economic and financial crimes and offences rests on<br />
the State Prosecutor’s Office. It is the national Police and Gendarmerie that are empowered to conduct<br />
investigations under the direction of the State Prosecutor. By Decree 2005-812 of 29 December 2005, the<br />
Second Preliminary Investigation Office is specifically in charge of investigating economic offences.<br />
253. The State Prosecutor, in its sphere of competence, receives cases handled by CENTIF and<br />
requests an examining judge to immediately open a criminal investigation (cf. Art. 29 of Act 2006-14 of<br />
31 December 2006). The State Prosecutor may also, in the framework of these normal prosecution<br />
prerogatives, initiate an AML procedure on the basis of information received from JPOs and through any<br />
other channel apart from CENTIF.<br />
254. The examining judge is empowered to prescribe interim measures, in accordance with the law by<br />
ordering, at the expense of the State, in particular the seizure or freezing of property related to the offence,<br />
generally the subject of the investigation.<br />
255. The tribunals are competent to order the confiscation of proceeds derived from the offence for the<br />
benefit of the Public Treasury, in particular,.<br />
Customs Services<br />
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256. The Fraud Control Department is in charge of the fight against money laundering and financing of<br />
Terrorism.<br />
257. The Fraud Control Department centralizes all information on AML at the level of the Customs<br />
Department.<br />
Specialized Agencies in the Control of Narcotic Drugs Trafficking<br />
National Police<br />
258. The body of the National Police in charge of leading the fight against drug trafficking is the<br />
Central Office for Repression of Illicit Trafficking of Drugs and Precursors (OCERTID). Created by<br />
Decree 99-141 of 15 March 1999, the OCERTID did not effectively start its activities until 2000. It is<br />
specifically in charge of:<br />
� Coordinating and organizing all operations aimed at repressing this trafficking;<br />
� Combating the laundering of profits generated by this activity;<br />
� Supporting and coordinating the action of the Police, Gendarmerie, Customs, Forests and Natural<br />
Resources Departments and all other structures involved in the fight against the use and illicit<br />
trafficking of narcotic drugs.<br />
259. It should be noted that the coordination with the other above-mentioned services in the fight<br />
against the trafficking of narcotic drugs is not effective, since at the OCERTID, the planned offices<br />
allocated to Liaison Officers of the Gendarmerie, Customs and Water and Forests Departments have to<br />
date not been occupied. The OCERTID, considered only as police civil servants, intervenes on the basis of<br />
information, especially and routine controls, in the city of Cotonou and surrounding areas, at the Cotonou<br />
International Airport, at the Cotonou Port Authority and in some private express-mail services.<br />
260. At the end of the control operations, cannabis or Indian hemp is the leading drug seized. It is<br />
followed by cocaine as a hard drug. Regarding heroine, it occupies the third position. It should be noted<br />
that there was an explosion of cocaine seizure in 2007 (cf. Table of Statistics R 32).<br />
261. Cannabis is cultivated in the centre of Benin and is often smuggled across land borders or<br />
consumed locally in the populous districts of towns. Hard drugs (cocaine and heroin) come from countries<br />
of South America and transit through West African countries en route to Europe. Cannabis is transported<br />
in bags or small bags.<br />
262. This hard drug is often concealed in objects that apparently contain no prohibited products, such<br />
as, for example, soles of shoes, large buttons fixed on new clothes, guitar handle, etc. (cf. Statistics on<br />
seizures in Section 2.3 of the Report). The technique consisting in swallowing drug balls is widely used,<br />
especially with cocaine. The relevant statistics are communicated by the Police to UNODC annually<br />
through the Inter-Ministerial Committee for Control of Drugs and Psychotropic Substances (CILAS), but<br />
the reliability leaves something to be desired in the absence of centralization.<br />
45
263. Some traffickers are specialized in the trafficking of drug balls, which they swallow prior to their<br />
departure for Europe. On arriving at their destination, they vomit the balls and deliver the product to their<br />
beneficiaries against high remuneration, and use the money for their shopping (second-hand vehicles from<br />
France, ready-made goods, etc.), which they ship to Benin by creating front businesses for laundering the<br />
proceeds from drug trafficking.<br />
National Gendarmerie<br />
264. The National Gendarmerie has no structure specifically in charge of combating illicit drug<br />
trafficking. Alternative to its traditional missions, it contributes to the fight against trafficking of narcotic<br />
drugs (cf. statistics of seizures from 2005 to 2008 in paragraph 2.3.1).<br />
Self-Regulatory Agencies of Lending institutions<br />
The Professional Association of Banks and Financial Institutions (APBEF)<br />
265. The main aim of the Association is to:<br />
- Represent banks and financial institutions in the political, administrative and monetary<br />
authorities;<br />
- Defend the material and moral interests of the profession;<br />
- Define the rules of healthy and fair competition between members of the profession and<br />
ensure the respect of these rules;<br />
- Promote the role of savings and credit as engine of economic growth and development of the<br />
country, make all suggestions of general interest in these areas to the Government and<br />
monetary authorities;<br />
- Develop confraternity ties among members;<br />
- Undertake all actions aimed at enhancing the image of banks;<br />
- Pool information on solvency and morality of their customers;<br />
- Amicably resolve differences that could arise between members;<br />
- Intervene in cases set out in the legislative or regulatory texts.<br />
Organization and Self-regulation of Designated Non-Financial Businesses and Professions<br />
(DNFBPs)<br />
Casinos<br />
266. There are two casinos in Benin, established in hotels. They are placed under the joint control of<br />
the Ministry of Security, the Ministry of Finance and the Ministry of Commerce.<br />
46
Public Accountants<br />
267. The AML Act is targeted at Auditors and not specifically Public Accountants. The profession of<br />
Public Accountant is regulated by Act 2004-033 of 27 April 2006 on creation of the Ordre des Experts<br />
Comptables et Comptables Agréés in the Republic of Benin (OECCA-Benin).<br />
Estate Agents and Real Estate Promoters<br />
268. The profession of estate promoter is regulated, which is not the case of Estate Agent.<br />
Dealers in precious metals and stones<br />
269. Their activity is regulated by Act 2006-17 of 17 October 2006 on the Mining Code in the<br />
Republic of Benin. Controls are carried out by the Ministry of Mines (Mines Department) on the quantity<br />
and quality of the gold to be exported, but the origin of the gold is not controlled, as well as the amount of<br />
the transactions.<br />
Notaries<br />
270. All Notaries practising in Benin are automatically members of the National Notarial<br />
Association. This Association is placed under the responsibility of the Minister of Justice. The Bureau of<br />
this Chamber is composed of a Chairman, a Vice-Chairman, a Secretary and a Treasurer.<br />
Lawyers<br />
271. The legal profession is regulated in Benin by: the Act of 29 April 1965 instituting the Beninese<br />
Bar, the By-laws of the Bar and the Decree of 23 January 1988 on organization of the Certificat d'Aptitude<br />
à la Profession d'Avocat (CAPA).<br />
272. The Bar Council, sitting as a Trial Committee, prosecutes and reprimands, as a disciplinary<br />
measure, offences committed by Lawyers at the Bar and on the internship list.<br />
These functions are either automatic, or performed at the request of the State Prosecutor, or on the<br />
initiative of the President of the Bar. He gives a ruling in all cases by a reasoned decree and pronounces,<br />
where necessary, one of the disciplinary penalties. The State Prosecutor ensures and supervises the<br />
execution of these disciplinary penalties.<br />
Situation since the Last Evaluation<br />
273. It should be underlined that this mutual evaluation of the AML/FT provision is the first of its kind<br />
conducted in Benin. The mission was informed that the country had been evaluated in the framework of<br />
the African Peer Review Mechanism (APRM) of the African Union to which it subscribed. However, the<br />
mission could not have access to the report of that evaluation.<br />
47
2. LEGAL SYSTEM AND RELATED INSTITUTIONAL MEASURES<br />
2.1 CRIMINALIZATION OF MONEY LAUNDERING (R.1 & 2)<br />
2.1.1 Description and Analysis<br />
Legal Framework<br />
274. The legal provision of anti-money laundering and financing of terrorism established, at<br />
community level, by the authorities of WAEMU and BCEAO and the Government of Benin at the<br />
national level, is based on the following main instruments:<br />
� Guideline 07/2002/CM/UEMOA of 19 September 2002 on anti-money laundering in WAEMU<br />
member-States;<br />
� Regulation 14/2002/CM/UEMOA of 19 September 2002 on freezing of funds and other financial<br />
resources in the framework of combating the financing of terrorism in WAEMU member-States;<br />
� Act 97-025 of 18 July 1997 on control of Drugs and Precursors;<br />
� Act 2006-14 of 31 October 2006 on anti-money laundering;<br />
� Decree 2006-752 of 31 December 2006 on creation, attributions, organization and functioning of a<br />
National Financial Information Processing Unit (CENTIF);<br />
� Decision 14/2006 CM/UEMOA of 08/09/2006 on amendment of Decision 12/2005/CM/UEMOA<br />
of 04/07/2005: on the list of persons, entities or agencies targeted by the freezing of funds and<br />
other financial resources in the framework of combating the financing of terrorism in WAEMU<br />
member-States;<br />
� Guideline 04/2007/CM/UEMOA of 4 July 2007 on combating the financing of terrorism in<br />
WAEMU member-States;<br />
� Instruction 01/2007/RB of BCEAO of 2 July 2007 on anti-money laundering;<br />
� Convention on creation of the Banking Commission of the West African Monetary Union;<br />
� The Criminal Code;<br />
� The Code of Criminal Procedure.<br />
Recommendation 1<br />
275. Criminalization and sanctioning of money laundering were introduced into the Beninese Criminal<br />
Law by Article 102 of Act 97-025 of 18 July 1997 on Control of Drugs and Precursors. But, this<br />
48
provision, which covered the material elements of conversion, transfer, concealment, disguise, acquisition,<br />
possession and use, only targeted laundering of money from drug trafficking.<br />
276. It is Act 2006-14 of 31 October 2006 on anti-money laundering, hereinafter called the AML Act<br />
that came to complete the provision, by harmonizing it with the Vienna and Palermo Conventions, in<br />
particular by extending widely the scope of offence to cover any crime or offence.<br />
Physical and Material Elements of the Offence (C. 1.1)<br />
277. Article 2 of the Anti-Money Laundering Act makes money laundering a criminal law and<br />
describes the physical and material elements of the offence, in accordance with the prescriptions of the<br />
Vienna and Palermo Conventions, by stipulating that: “In the sense of this act, money laundering is<br />
defined as one or more of the intentionally committed actions enumerated hereafter:<br />
� The conversion, transfer or manipulation of property, knowing that such property derives from a<br />
crime or offence or from an act of participation in such crime or offence, for purposes of<br />
concealing or disguising the illicit source of the said property or assisting any person involved in<br />
the commission of such a crime or offence to escape from the legal consequences of his actions;<br />
� The concealment or disguise of the nature, source, location, disposal or movement or of the true<br />
ownership of or rights with respect to property, knowing that such property is derived from a<br />
crime or offence as defined in the national legislations of member-States or from an act of<br />
participation in such a crime or offence;<br />
� The acquisition, possession or use of property, knowing, at the time of receipt, that the said<br />
property was derived from a crime or offence or from an act of participation in such a crime or<br />
offence”.<br />
Types of property to which money laundering offence applies (C. 1. 2)<br />
278. The property targeted, without specification of value, by Article 2 of the AML Act is a type of<br />
property to which money laundering offence applies. They are defined in Article 1 as: “assets of any kind,<br />
whether physical or nothing, movable or immovable, tangible or intangible, fungible or non fungible, as<br />
well as legal instruments or documents evidencing title to this property or the corresponding rights”.<br />
279. The AML Act does not specify that the said property should represent directly or indirectly<br />
proceeds from crime. However, by virtue of its article that explicitly provides for the confiscation of<br />
indirect proceeds, it may be admitted that the property from the commission of a predicate offence covers<br />
assets that represent directly or indirectly proceeds of the crime.<br />
280. The money laundering offence is committed, even if the assets are converted.<br />
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281. “Money laundering is deemed to exist, even if the acts that are at the origin of the acquisition,<br />
possession and transfer of the assets to be laundered, are committed on the territory of a member-State or<br />
that of a third-party State”. Unless the predicate offence has been the subject of an amnesty law, money<br />
laundering is deemed to exist, even if the perpetrator of the crimes or offences has not been prosecuted, or<br />
convicted (Art.3 al 2).<br />
Prerequisite for conviction for predicate offence (C. 1.) 2. 1)<br />
282. According to law, one does not need to be sentenced for a predicate offence to prove that a<br />
property constitutes proceeds from crime. Indeed, money laundering is deemed to exist, even if the<br />
perpetrator of the crimes or offences has not been prosecuted, nor sentenced or if it lacks a condition for<br />
taking legal action following the said crimes or offences unless the predicate offence has been the subject<br />
of an amnesty law (Art.3 al 2 of the AML Act).<br />
Main Offences (C. 1. 3 and 4)<br />
283. Concerning the scope of money-laundering offences, Article 2 of the AML Act targets crimes and<br />
offences without limitation. The qualification of crime or offence helps to cover a very wide range of<br />
predicate offences.<br />
284. Furthermore, the Penal Code (PC) and specific repressive texts criminalizing and sanctioning as<br />
crimes or offences the 24 categories of offences designated by the FATF as follows:<br />
Categories of offences References, repression text<br />
1-Participation in an organized criminal<br />
group - Racket:<br />
Art. 265 PC<br />
Sanctions<br />
Observations<br />
2-Terrorism, including its financing Lack of incrimination See developments<br />
related to SR II<br />
3-Human trafficking and illicit migrant<br />
trafficking<br />
4-Sexual exploitation, including that of<br />
children<br />
Decree 12-1905 (Repression of<br />
Trafficking)<br />
Decree 23-8-1912 enforcing the<br />
Convention of 4 May 1910<br />
(Women trafficking)<br />
Act 2006-04 of 5 April 2006 on<br />
condition of displacement of<br />
minors and repression of child<br />
trafficking<br />
Art. 334 and subsequent articles<br />
of the CP<br />
6 months to 2 years<br />
in prison;<br />
Fine of CFAF<br />
400,000 to 4 million.<br />
50
5-Illicit trafficking of narcotic drugs and<br />
psychotropic substances<br />
Art. 95-025 and subsequent<br />
articles of the Act<br />
of 18 July 1997 on control of<br />
drugs and precursors<br />
6-Arms trafficking Art. 27 of Decree 61-39 PR/MI of<br />
7 February 1961<br />
7-Illicit trafficking of stolen goods and<br />
other goods<br />
Art. 460 and subsequent articles<br />
of the PC<br />
8-Corruption Art. 177 and subsequent articles<br />
of the PC<br />
Order 79-23 of 10 May 1979<br />
punishing, under the criminal<br />
code, embezzlements, corruption,<br />
misappropriation and similar<br />
offences committed by permanent<br />
government agents.<br />
Order of 8 February 1945<br />
punishing corruption of public<br />
servants and employees of private<br />
businesses.<br />
10 to 20 years in<br />
prison;<br />
Fine of CFAF<br />
500,000 - 5 million<br />
1 - 5 days in prison;<br />
Fine of CFAF 1000<br />
to 1200<br />
5 - 10 years in prison<br />
with hard labour for<br />
civil servants and<br />
permanent<br />
government<br />
employees<br />
1 - 3 years in prison<br />
for private sector<br />
employees<br />
Fine of CFAF 90,000<br />
– 900,000<br />
for civil servants.<br />
Fine of CFAF 60,000<br />
– 600,000 for private<br />
sector employees<br />
Confiscation<br />
9-Fraud and Swindle Art. 405 PC 1 - 5 years in prison<br />
(increased to 10 years<br />
in case of public<br />
offering);<br />
10-Currency forgery Art.132 and subsequent articles<br />
PC<br />
Art. 1 and subsequent articles Act<br />
2003-21 of 11 November 2003<br />
Fine of CFAF<br />
240,000 to 2,400,000<br />
(increased to 12<br />
million in case of<br />
public offering)<br />
Life imprisonment<br />
with hard labour;<br />
Fine increased<br />
tenfold of the value<br />
of the forged signs<br />
with a minimum of<br />
51
11-Forgery and piracy of products Art. 58 AIPO Accord of 2 March<br />
1977 (Industrial Property)<br />
Art. 90 and subsequent articles<br />
Act 2005-30 of 5 April 2006 on<br />
protection of copyright and<br />
neighbouring rights<br />
12-Crimes against the environment Art.15, 112 and subsequent<br />
articles Art. 98-030 of 12<br />
February 1999 on the framework<br />
law on the environment in the<br />
Republic of Benin<br />
13-Murders and serious body harm Art. 295 and subsequent articles<br />
of the PC<br />
14-Kidnapping, sequestration and hostage<br />
taking<br />
Art. 341 and subsequent articles<br />
of the PC<br />
15-Stealing Art.379 and subsequent articles of<br />
the PC<br />
16-Smuggling Art. 353 and subsequent articles<br />
of the Customs Code<br />
CFAF 20 million<br />
Penalty of 1 - 3 years<br />
in prison, doubled in<br />
case of repeat<br />
offence;<br />
Fine of CFAF 1 - 10<br />
million, doubled in<br />
case of repeat offence<br />
Death sentence or life<br />
imprisonment with<br />
hard labour<br />
Penalty of hard<br />
labour for a period of<br />
time or death<br />
sentence in case of<br />
torture of the persons<br />
sequestrated<br />
.<br />
Penalty of hard<br />
labour for a period,<br />
for life or death in<br />
case of aggravating<br />
circumstances<br />
Penalty of 3 months<br />
to 1 year in prison;<br />
Fine representing<br />
twice or four times<br />
the value<br />
Confiscation<br />
17-Extorsion Art. 400 PC Hard labour for a<br />
period of time<br />
18-Forgery Art.145 and subsequent articles<br />
PC<br />
19-Piracy Art. 271 and 272 of Order<br />
38PR/MTPTPT of 18 June 1968<br />
Hard labour for a<br />
period of time or for<br />
life in case of civil<br />
servants or public<br />
officers<br />
Death sentence, Hard<br />
labour or Life<br />
52
20-Insider dealing and market<br />
manipulation<br />
on the Shipping Code imprisonment<br />
Art.19 Banking Act<br />
Lack of penalty for<br />
insider dealing and<br />
market manipulation<br />
on the Regional<br />
Stock Market<br />
285. It is important to note the significant lack of criminalization of terrorism and its financing, as well<br />
as insider dealing and market manipulation. The illegal trafficking of migrants is occasionally<br />
criminalized. As an autonomous offence, illegal trafficking of migrants should be governed by a complete<br />
system of criminalization and sanctions, in accordance with the Protocol annexed to the United Nations<br />
Convention of Repression of Terrorism Financing.<br />
286. For the Beninese authorities met by the mission, the Convention on creation of the Regional<br />
Council on Public Savings and Financial Markets (CREPMF) offers a framework for punishing insider<br />
trading (Art. 36 of the annex). Hence, for them, the laundering of proceeds derived from insider trading<br />
and market manipulation is susceptible for prosecution on the basis of the more general offences of fraud,<br />
for example.<br />
287. The fact remains that, in the absence of an internal legal text, this offence cannot, in practice, be<br />
sanctioned.<br />
288. The draft of Benin’s new Criminal Code under examination and whose objective is to be in<br />
harmony with international standards is likely to help remedy this situation.<br />
The table below presents the different types of most common crimes.<br />
TABLE OF STATISTICS OF THE MOST COMMON PREDICATE OFFENCES FROM 2006 TO<br />
2008 (Source National Police: DSP – DPJ)<br />
Years<br />
FRAUDS<br />
COMPOUND ROBBERY<br />
BREACH OF TRUST<br />
Nature of offence<br />
2006 2007 2008 TOTAL<br />
2757 2510 2501 7768<br />
793 815 975 2583<br />
8862 6812 8131 23803<br />
FORGERY AND PIRACY 24 21 18 63<br />
CYBERCRIME<br />
107 - - 107<br />
53
289. It appears from these statistics that the most common offences concern cases of fraud and breach<br />
of trust. It should be noted that cyber-criminality is on the increase in Benin, although the statistics<br />
produced are for the year 2007.<br />
290. It is unfortunate that these statistics globally did not take into account the financial counter-values<br />
to ensure better appreciation of the eventual recycling base of the proceeds from these illicit activities.<br />
Acts committed outside the Beninese territory (C.1.5)<br />
291. According to Article 2 sub-paragraph 2, “Money laundering is deemed to exist, even if the acts<br />
that are at the origin of the acquisition, possession and transfer of assets to be laundered are committed on<br />
the territory of another member-State or on that of a third-party State”.<br />
292. The text does not specify the need for prior criminalization of the said acts in the third-party State<br />
(double criminalization).<br />
Self-money laundering (C. 1. 6)<br />
293. According to the authorities met by the team of the evaluation mission, the provisions of the law<br />
on anti-money laundering do not exclude the fact that the same person can be the perpetrator of main<br />
offence, may be prosecuted and sentenced for laundering the asset from the latter, as no other national<br />
legislation or legal principle can oppose such measure. But in the hypothesis of a combination of offences,<br />
le principle of non-accumulation of penalties is retained and only the heaviest sentence shall be applicable.<br />
294. For the moment, no such jurisprudence exists in Benin.<br />
Related Offences (C.1.7)<br />
295. The Anti-Money laundering Act also provides for related offences. According to Article 3 of the<br />
said act, “the agreement to or participation in an association to commit an act constituting money<br />
laundering; association to commit the said act, attempts to perpetrate it; aid, incitement or advice to a<br />
natural or legal person, with a view to executing it or of facilitating its commission also constitute money<br />
laundering offence”.<br />
Additional elements – Proceeds from predicate offence committed outside Benin and ML offence<br />
(C.1.8)<br />
296. Under the terms of Article 2 sub-paragraph 2 of the AML Act: “Money laundering is deemed to<br />
exist, even if the acts at the origin of the acquisition, possession and transfer of assets to be laundered, are<br />
committed on the territory of another member-State or that of a third-party State”.<br />
54
297. This article does not pose the principle of double criminalization, since it does not say that there<br />
has been an offence of ML, when the proceed of the crime is obtained following a conduct occurring in<br />
another country, which does not constitute an offence in this other country, but which would have<br />
constituted a predicate offence in Benin.<br />
298. On the other hand, Article 553 of the Code of Criminal Procedure (CCP) stipulates that “Any<br />
Benin national, who outside the territory the Republic, is found guilty of an act described as offence<br />
according to Beninese Law, may be prosecuted and tried by Beninese jurisdictions, if the act is punished<br />
under the legislation of the country where it has been committed”. This provision, which imposes the<br />
condition of double incrimination, seems to oppose the prosecution for money laundering in case of<br />
predicate offence not incriminated in the country of its commission.<br />
Recommendation 2<br />
Liability of natural persons (C.2.1)<br />
299. Money laundering offence presupposes wrongdoings like conversion, transfer or manipulation of<br />
assets, dissimulation, disguise, acquisition, possession or use of assets … committed intentionally. The<br />
criminal liability of natural persons is set out in the AML Act since Article 5 relating to the scope of<br />
application of the said act targets “any natural person … “. Furthermore, Article 37 of the AML Act<br />
provides for criminal penalties applicable to natural persons found guilty of a money laundering offence.<br />
Intentional Element (C. 2.2)<br />
300. As specified above, the definition of incrimination of money laundering takes into account the<br />
intentional element of the offence. It is the awareness of the illicit origin of the good to be laundered at the<br />
time of the act (Art 2). This element is supremely appreciated by the trial judge according to the<br />
circumstances of the cause.<br />
301. The act does not mention specifically that the intentional element of the offence of money<br />
laundering may be deduced from “objective factual circumstances”.<br />
302. However, the provisions of Articles 2 (wrongdoings committed intentionally), 3 (related<br />
offences), 39 (aggravating circumstances) and 40 (sanction for specific money laundering offences)<br />
should ensure that the knowledge, intention or motivation as elements of offences of money laundering<br />
can be deduced from objective factual circumstances.<br />
Criminal liability of legal persons (C.2.3)<br />
303. According to Article 42 of the Act: “Legal persons other than the State, for the account and<br />
benefit of which a money laundering offence or one of the offences set out in this act has been committed<br />
by one of the bodies or representatives, shall be punished by a fine equal to five times that incurred by<br />
natural persons, without prejudice to the sentencing of the latter as perpetrators or accomplices of the same<br />
55
acts”. This article, therefore, affirms the principle of liability of legal persons and sets forth the penalties<br />
applicable to them.<br />
Other penalties imposed on legal persons (C.2.4)<br />
304. The fact of subjecting legal persons to criminal liability for money laundering does not exclude<br />
the possibility of initiating parallel procedures.<br />
Apart from the fine, legal persons other than the State may be sentenced to one or several of the following<br />
penalties:<br />
� Exclusion from public markets, permanently or for a maximum period of (5) years;<br />
� Confiscation of the good that served or was intended serve to commit the offence or the good<br />
which is the proceed from it;<br />
� Placement under judicial surveillance for a maximum period of five (5) years;<br />
� Banning, for good, or for a period of five (5) years, from exercising directly or indirectly one<br />
or several professional or social activities on the occasion of which the offence was<br />
committed;<br />
� Closing down, permanently or for a period of five (5) years, of the establishments or one of<br />
the establishments of the business that served to commit the incriminated acts;<br />
� Dissolution, when they were created to commit the incriminated acts;<br />
� Posting of the decision pronounced or dissemination of the latter by the written press or by<br />
any audio-visual means of disclosure at the cost of the legal person convicted”.<br />
305. Financial entities subjected to a supervision authority having a disciplinary power are exempted<br />
from the penalties provided for under points 3 through to 7 mentioned above. This situation is explained<br />
by the fact that the competent supervisory authority, to which the State Prosecutor has referred any court<br />
action against a financial entity, may impose appropriate penalties, in accordance with specific legislative<br />
and regulatory texts in force (paragraphs 3 and 4 of Article 42).<br />
306. The criminal penalties do not harm other types of administrative or civil actions, in particular<br />
those relating to request for damages.<br />
Efficient, proportionate and dissuasive nature of the penalties (C.2.5)<br />
307. Pursuant to Article 37 of 2006-14 of 31 October 2006, natural persons convicted of a money<br />
laundering offence, are sentenced to a prison term of three (3) to seven (7) years and a fine equal to three<br />
times the value of the assets or fund which resulted from the laundering operations. Attempted laundering<br />
shall be punished with the same penalties.<br />
308. Article 39 of the same Act prescribes that these penalties be doubled in the following aggravating<br />
circumstances:<br />
56
� When the money laundering offence is committed in a habitual manner or by using facilities<br />
procured from the exercise of a professional activity;<br />
� When the perpetrator of the offence is a repeat offender; in this case, the sentences handed down<br />
abroad are taken into account in establishing the repeat offence;<br />
� When the offence of laundering is committed in an organized band.<br />
309. When the money laundering crime or offence from which the property or sums of money involved<br />
in the money laundering offence (predicate offence) are derived is punishable by imprisonment for a<br />
period exceeding that of the prison term imposed in application of Article 37 of the AML Act, the money<br />
laundering offence is punishable by penalties attached to the predicate offence of which the perpetrator<br />
was aware and, if this offence is accompanied by aggravating circumstances, by penalties attached only to<br />
the circumstances of which he was aware. On that basis, money laundering, which is an autonomous<br />
offence, may be punishable by penalties attached to the predicate offence if the perpetrator of the money<br />
laundering offence was aware of it. Moreover, if this offence is accompanied by aggravating<br />
circumstances, it is only the penalties attached to the circumstances of which he was aware alone that shall<br />
be applied.<br />
310. This was the reading made by the law application authorities met of Article 39, sub-paragraph 2.<br />
Such a reading does not provide clarification of the proportionality of penalties.<br />
311. Furthermore, the proportional and dissuasive nature of AML penalties seems below the penalties<br />
provided for in the case of offences associated with drug trafficking. Indeed, Articles 95 and subsequent<br />
articles of the act on drugs and precursors provide for a prison term of 10 to 20 years whereas Article 37<br />
of the Anti-Money Laundering Act only provides for a prison term of 3 to 7 years. Even so, it cannot be<br />
deduced, mechanically, that the AML sanctions are not proportional or dissuasive.<br />
312. Additional penalties are set forth in Articles 41, relating to additional optional criminal penalties<br />
applicable to natural persons, and 45 relating to mandatory confiscation of proceeds derived from money<br />
laundering under the AML Act. The additional penalties are of two types: compulsory additional penalties<br />
and optional additional penalties.<br />
313. The compulsory additional penalty is common to natural persons and legal persons and involves<br />
confiscation “of the proceeds of the offence, of movable or immovable assets into which these proceeds<br />
are transformed or converted and, up to the level of their value, of legitimately acquired property with<br />
which the said proceeds are commingled, as well as revenues and other benefits derived from these<br />
proceeds, properties into they are transformed or invested or property into which they are commingled,<br />
whichever person to whom these proceeds and assets belong, unless their owner establishes that he is<br />
unaware of their fraudulent origin” (Art. 45 of the Anti-Money Laundering Act).<br />
314. These optional additional penalties apply both natural and legal persons. The optional additional<br />
penalties stipulated for natural persons are aimed at: restricting their freedom of action, in particular<br />
temporary or permanent prohibition on entering, staying in, or leaving the national territory, restriction of<br />
civic or civil rights, the exercise of certain professional activities, check-writing capabilities or limiting<br />
their prerogatives with regard to certain property (prohibition on driving any terrestrial motor vehicle,<br />
water craft or aircraft, possessing or carrying a weapon, the confiscation of all or part of their illegally<br />
57
acquired property, of the property used for or intended to be used for the commission of the offence (See<br />
paragraph. 154 above).<br />
Analysis of effectiveness<br />
315. Penalties effectively pronounced by the courts may alone help to estimate, in particular, the<br />
dissuasive impact of the penalties and the effectiveness of the provision of repression of money<br />
laundering. However, this is not yet the case in Benin, nearly three years after the entry into force of the<br />
AML Act.<br />
316. In fact, since the adoption of the Act, no case has been brought before the courts to be tried.<br />
Statistics available during the visit of the evaluation mission concern seizures of drugs made both by the<br />
Police and Gendarmerie Services and the Customs Department.<br />
317. The authorities met during the visit were of the view that the legal framework set by the AML<br />
Act, which punished laundering offence and predicate offences already constituted a major step.<br />
318. In this regard, they mentioned the case of suspicious transactions brought before the Cotonou<br />
Court of First Instance. In the absence of anti-money laundering text at that time, this case could not<br />
prosper and the declaring bank had to retract its statement. It should, therefore, be hoped that the effective<br />
enforcement of this act can have a dissuasive impact on those who would be tempted to commit the<br />
money laundering offence. But this presupposes better knowledge of this act by those in charge of its<br />
enforcement, in particular magistrates, which is not yet the case in Benin.<br />
.<br />
2.1.2 Recommendations and Comments<br />
319. On the basis of the above observations, the mission recommends to the Beninese Authorities to:<br />
- Criminalize in a more extensive manner migrant trafficking (by targeting the case of adults);<br />
- Criminalize terrorism and its financing, insider trading and market manipulation;<br />
- Clarify the offence of self-money laundering;<br />
- Adopt necessary measures to render effective the enforcement of the act, in particular<br />
through wider dissemination among the authorities charged with its enforcement through<br />
appropriate training;<br />
- Adopt necessary measures to help assess the effectiveness of the provision for repression of<br />
ml.<br />
2.1.3 Compliance with Recommendations 1 and 2<br />
R 1 PC<br />
Rating Summary of Factors Underlying Rating<br />
Unduly restrictive criminalization of migrant trafficking<br />
Lack of criminalization, at national level, of the financing of terrorism,<br />
insider trading and market manipulation<br />
58
R 2 LC<br />
Lack of clarity on the offence of self-money laundering<br />
Enforcement of the act not efficient<br />
Difficulty in assessing the effectiveness of the provision on repression of<br />
money laundering.<br />
Enforcement of the act not efficient.<br />
2.2 CRIMINALIZATION OF THE FINANCING OF TERRORISM (SR.II)<br />
Special Recommendation II<br />
2.2.1 DESCRIPTION AND ANALYSIS<br />
320. The legislation on financing of terrorism does not exist yet and according to the Beninese<br />
authorities, no offence of this type had been committed to warrant punishment. On the other hand, these<br />
authorities, who estimate that the risk of terrorism and its financing is low in Benin, affirmed that Benin<br />
ratified:<br />
� The Convention for the Repression of Terrorist Bomb Attacks on 31 July 2003;<br />
� The International Convention for the Repression of the Financing of Terrorism on 30 August<br />
2004.<br />
However, at the time of the visit, the team of the evaluation mission could not have access to the<br />
ratification instruments (See R35 below).<br />
321. The WAEMU Council of Ministers adopted Guideline 04/2007/CM/UEMOA of 07 July 2007 on<br />
combating the financing of terrorism in WAEMU member-States in order to define the legal framework<br />
for combating the financing of terrorism in member-States, in accordance, in particular with the 1999<br />
International Convention for repression of the financing of terrorism and its annexes. The analysis of the<br />
Guideline helped to observe that criminalization of the financing of terrorism is in line with the said<br />
Convention.<br />
322. On the basis of this WAEMU Guideline, a uniform bill was prepared. It was adopted in Cabinet<br />
and according to the authorities of the Supreme Court met by the mission, the President of the Republic<br />
requested the Supreme Court to express its views on the said draft bill. In this regard, an Adviser is in<br />
charge of drafting a report, which will be presented to the Plenary Assembly of the Supreme Court<br />
(constituted by the Judicial Chamber, the Administrative Chamber and the Chamber of Accounts) to<br />
express a view. At the time of the visit, the Adviser had not yet submitted his report. As soon as the report<br />
is presented and the Plenary Assembly has expressed a view, the bill will be transmitted to the President of<br />
the Republic who will transmit it to the National Assembly for adoption.<br />
59
2.2.2 Recommendations and Comments<br />
323. Even if they consider as low the risk of financing of terrorism, the Beninese authorities should<br />
implement internally the commitments made at the international level in order to facilitate the pursuit and<br />
repression of this type of offence in their country.<br />
324. To that end, the procedure to be followed to ensure the adoption of the FT Act seems long and the<br />
Beninese authorities are invited to take appropriate measures to accelerate the said procedure to ensure the<br />
adoption as early as possible of the said act on the financing of terrorism.<br />
2.2.3 Compliance with Special Recommendation II<br />
R S II NC<br />
Rating Summary of Factors Underlying the Rating<br />
Lack of criminalization of the financing of terrorism, for lack of<br />
transposition of the relevant WAEMU Guideline.<br />
2.3 CONFISCATION, FREEZING AND SEIZURE OF THE PROCEEDS OF CRIME<br />
2.3.1 DESCRIPTION AND ANALYSIS<br />
� Articles 102, 111 and 113 of Act 97-025 of 18 July 1997 on control of drugs and precursors,<br />
under which money laundering is punishable by mandatory confiscation, and seizure in its Article<br />
118;<br />
� Act 2006-14 of 31 October 2006 on anti-money laundering sets forth in its Articles 36, 41 points 9<br />
and 10, 42 point 2, 45, 33 ultimately, 63 on confiscation, freezing and seizure of proceeds of<br />
crime;<br />
� Order 79-23 of 10 May 1979 punishing under the Criminal Code, embezzlements, corruption,<br />
misappropriation and assimilated offences committed by permanent state agents.<br />
325. All the texts mentioned above organize confiscation, freezing and seizure in the context of the<br />
fight against money laundering in Benin.<br />
Confiscation of property constituting proceeds generated through the commission of money<br />
laundering offence, financing of terrorism or other predicate offences, including property of<br />
equivalent value (C.3.1).<br />
60
326. Mandatory confiscation of property constituting proceeds generated through the commission of<br />
the money laundering offence is provided for in Article 45 of the AML Act. This article stipulates that: “in<br />
all cases of conviction for money laundering offence or attempted money laundering, the courts order the<br />
confiscation to the public treasury, proceeds derived from the offence, movable or immovable property<br />
into which these proceeds are transformed or converted and, up to their value, property legitimately<br />
acquired into which the said proceeds are commingled, as well as revenues and other benefits derived<br />
from these proceeds, property into which they are transformed or invested or property into which they are<br />
commingled to any person to whom these proceeds belong, unless their owner established that he was<br />
unaware of their fraudulent origin”.<br />
327. Moreover, Article 41, paragraph 10 provides as an optional additional criminal sanction<br />
applicable to natural persons for the “confiscation of the property or the item that served or was intended<br />
to serve to commit the offence that constituted the proceeds thereof, with the exception of items<br />
susceptible for restitution”.<br />
328. Article 42 paragraph 2 provides, as optional additional sanction applicable to legal persons, for the<br />
“confiscation of the property or item that served or was intended to serve to commit the offence or the<br />
proceeds thereof”.<br />
329. The possibility of confiscating the property of an equivalent may be deduced from the provisions<br />
of Articles 36 sub-paragraph 1 (on precautionary measures) and 63 sub-paragraph 2 (on the request for<br />
confiscation). Indeed, under the terms of Article 36 sub-paragraph 1, the examining judge may order the<br />
seizure or confiscation of the property in relation with the offence, the subject of the investigation and all<br />
the elements to help identify them, as well as the freezing of the sums of money and financial operations<br />
concerning the said property.<br />
330. Article 63 sub-paragraph 2 specifies, for its part, that the decision on confiscation must target a<br />
property, constituting the proceeds or the instrument of one of the offences targeted by the act or<br />
consisting in the obligation to pay a sum of money corresponding to the value of this property.<br />
331. The combined interpretation of these two texts helps to deduce the confiscation of a property or an<br />
amount of money corresponding to the value of a property that constitutes the proceeds generated by the<br />
commission of a money laundering offence.<br />
The other property subject to confiscation (C.3.1.1)<br />
332. The Anti-Money Laundering Act, therefore, includes as property subject to confiscation, proceeds<br />
generated by the commission of the money laundering offence, the instruments used or intended to be<br />
used to commit the offence, the property derived directly or indirectly from the proceeds of the offence,<br />
including revenues and other benefits derived from these proceeds, movable and immovable property into<br />
which the proceeds of the offence are commingled or transformed and up to the equivalent of their value if<br />
this property has been legitimately acquired.<br />
Property from predicate offences<br />
333. It should also be noted that Articles 111 to 113 of the 1997 Act on the control of drugs and<br />
precursors provide for mandatory confiscation.<br />
61
334. Furthermore, Article 180 of the Criminal Code prescribes: "The corruptor shall not be made to<br />
surrender items delivered to him, nor their value; they shall be confiscated for the benefit of the Public<br />
Treasury.<br />
335. Concerning property associated with terrorism, the lack of criminalization of this offence in the<br />
national law does not allow for their confiscation.<br />
336. Statistics on seizures made in the framework of drug control were communicated to the mission.<br />
No link could be established between these figures and AML.<br />
SUMMARY TABLE OF DRUG SEIZURES FROM 2006 TO 2008 - SOURCE: NATIONAL<br />
POLICE (OCERTID – DSP) (Weights expressed in grams)<br />
YEAR CANNABIS COCAINE HEROIN<br />
2006 172,328.26 45,738.226 400,425<br />
2007<br />
2008<br />
147,171.63 446,717.07 3,590,539<br />
18,005,846 45,219,708 4,168,394<br />
337. The statistics show that if seizures of cannabis and cocaine fell drastically between 2007 and<br />
2008, (from 147,172 g to 18,006 g for cannabis, and from 446,717 g to 45,219 g for cocaine), those of<br />
heroin increased from 3,590 g to 4,168 g.<br />
338. The high level of seizures made in 2007 shows a significant increase in cocaine smuggling in<br />
2007. Indeed, Benin seems to constitute a transit country for cocaine smuggling like most countries in the<br />
sub-region, hence the risk of laundering proceeds from drug trafficking.<br />
Provisional measures (C.3.2)<br />
339. Article 36 of the AML Act contains provisional measures:<br />
� “The examining judge may prescribe precautionary measures, in accordance with the act ordering,<br />
at government expense, in particular the seizure or confiscation of the property associated with the<br />
offence, the subject of the investigation and all elements that can help to identify them, as well as<br />
the freezing of the sums of money and financial operations concerning the said property”.<br />
� The fact that Article 36 of the AML Act mentions, among the precautionary measures, that<br />
confiscation does not seem judicious. In fact, precautionary measures are taken by the examining<br />
judge at the stage of investigation. At this stage the guilt of the accused person is not yet<br />
established and, therefore, his property cannot be confiscated. The confiscation involves<br />
permanent dispossession of the property of the perpetrator of the offence for the benefit of the<br />
State. The confiscation is ordered by a court decision. It is, therefore, legally ineffective at the<br />
investigation stage.<br />
62
340. The mission questioned the Beninese authorities about the practical modalities of the confiscation<br />
at the investigation stage. The latter indicated that according to legal principles in force in Benin, it is<br />
impossible to effect confiscation at the investigation stage and that, in fact, it is an error contained in the<br />
Uniform Act. If that is the case, then the error should be corrected.<br />
341. Concerning the predicate offences, the Code of Criminal Procedure (CPP) settles the issue in its<br />
Articles 43 (crimes and fragrant offences), 84 and subsequent articles (transport, searches and seizures).<br />
Indeed, by virtue of these provisions, the examining judge has power of seizure of objects and documents<br />
useful for establishing the truth.<br />
The effect of all these provisional measures is to block any transaction, transfer of assets subject to<br />
confiscation.<br />
Deposit ex parte or without prior notice of a request for freezing or seizure of property subject to<br />
confiscation (C.3.3)<br />
342. The AML Act does not specifically provide for the obligation for the examining judge or the State<br />
Prosecutor to proceed to the deposit ex parte or without prior notice a request for freezing or seizure or<br />
property subject to confiscation. The Code of Criminal Procedure also makes no mention of any provision<br />
in that regard.<br />
Prerogatives for detection and retracing of the origin of property subject to confiscation (C.3.4) and<br />
Measures aimed at preventing or cancelling actions that are prejudicial to the capacity of the<br />
authorities to recover property subject to confiscation (C.3.6)<br />
343. In order to establish proof of the original offence and proof of the offences associated with money<br />
laundering, the examining judge may order, in accordance with the law, for a fixed period, without the<br />
professional secrecy being opposed to him, various actions, in particular:<br />
� Placing under surveillance of bank accounts and accounts assimilated with bank accounts,<br />
when serious indices make one suspect that they are used or likely to be used for operations<br />
associated with the original offence or offences set out in this act;<br />
� Access to computer systems, networks and servers used or likely to be used by persons<br />
against whom exist serious indices of participation in the original offence or offences set out<br />
in this act;<br />
� Disclosure of authentic acts or under private signature, of bank, financial and commercial<br />
documents.<br />
344. He may also order the seizure of the above-mentioned deeds and documents.<br />
345. However, the Anti-Money Laundering Act does not explicitly confer these prerogatives on<br />
criminal prosecution authorities and all the more so the CENTIF of Benin.<br />
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346. However, the CCP confers on the criminal prosecution authorities, extensive investigation<br />
powers, which may be used in the framework of the AML.<br />
347. Concerning CENTIF, Article 28 of the said act grants it the possibility to oppose the execution of<br />
a transaction, on the basis of reliable, serious and corroborating information for a maximum period of 48<br />
hours.<br />
348. Regarding the possibility for the criminal authorities to adopt measures aimed at preventing or<br />
cancelling contractual or other actions in which the persons involved knew or should have known that<br />
these actions would affect the capacity of the authorities to recover the goods subject to confiscation, there<br />
is no explicit provision in the AML Act. Nevertheless, the authorities met by the mission affirm that no<br />
contractual obligation (whose legality is the basic condition of validity) can, a priori, constitute an obstacle<br />
to the confiscation or seizure. The authorities met also felt that the civil or commercial judge can prevent<br />
or annul the effects of an illegal contract in enforcement of Articles 1131 and 1133 of the Civil Code. (See<br />
above and also Sections 2.5 and 2.6 of this Report).<br />
C.3.5 Protection of third parties in good faith<br />
349. The AML Act contains no specific provisions protecting third parties of good faith, as required<br />
under the Palermo Convention. However, Article 45 ultimately excludes confiscation of property<br />
belonging to persons who have established that they were unaware of the fraudulent origin of the proceeds<br />
derived from the money laundering offence. In this case, it is the responsibility of these persons to prove<br />
their good faith. Moreover, Article 86, sub-paragraph 1 CPP offers this protection by providing that: “The<br />
accused person, the defendant or any other person who claims having right over an object placed in the<br />
hands of the justice system can claim its restitution from the examining judge”.<br />
2.3.2 Recommendations and Comments<br />
350. The Beninese authorities should take measures to:<br />
� Complete the legislation by including it in the provisions relating to property of equivalent value;<br />
� Make possible the freezing, seizure and confiscation of property associated with the financing of<br />
terrorism;<br />
� Establish statistics on confiscation, freezing and in the area of the fight against money laundering.<br />
2.3.3 Compliance with Recommendation 3<br />
R 3 PC<br />
Rating Summary of Factors Underlying Rating<br />
Lack of arrangements for assets of corresponding value<br />
Impossibility of freezing, seizure and confiscation of assets associated with<br />
the financing of terrorism, due to lack of criminalization of this offence in<br />
the national law<br />
Lack of implementation of the freezing, seizure and confiscation<br />
mechanisms in connection with money laundering<br />
Lack of statistics<br />
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2.4 FREEZING ASSETS USED TO FINANCE TERRORISM (SR.III)<br />
2.4.1 Description and Analysis<br />
Legal Framework<br />
� Regulation 14/2002/CM/UEMOA of 19 September 2002 on freezing of funds and other financial<br />
resources in the framework of combating the financing of terrorism in WAEMU member-States<br />
(this Regulation is of direct application);<br />
� Decision 14/2006 CM/UEMOA of 08/09/2006 on amendment of Decision 12/2005/CM/UEMOA<br />
of 04/07/2005 on the list of persons, entities or agencies targeted by the freezing of funds and<br />
other financial resources in the framework of combating the financing of terrorism in WAEMU<br />
member-States;<br />
� Guideline 04/2007/CM/UEMOA of 04 July 2007 on combating the financing of terrorism in<br />
WAEMU member-States.<br />
351. These texts organize the freezing of funds used for financing of terrorism in application of<br />
Resolutions 1267 (1999) and 1373 (2001).<br />
352. It should be noted that Benin ratified the International Convention for Repression of the Financing<br />
of Terrorism on 30 August 2004. But it has not yet introduced the provisions of this convention into its<br />
legal order for lack of a national law.<br />
SR III.1 Freezing assets under UN Resolution 1267 (1999)<br />
353. Article 4 of Regulation 14/2002 of 19 September 2002, on Conditions of implementation of the<br />
measures for freezing funds and other financial resources: “All funds and other financial resources<br />
belonging to any natural or legal person, any entity or agency designated by the Penalties Committee,<br />
shall be frozen”.<br />
354. To that end, the WAEMU Council of Ministers establishes the list of persons, entities and<br />
agencies whose funds must be frozen. Concerning persons and entities subject to the freezing measures,<br />
the Regulation only targeted those explicitly designated by the Penalties Committee. Yet, Resolution 1267<br />
also demands that assets of persons acting for the account and on instructions of persons and entities<br />
registered on the summary list be frozen.<br />
355. It should be noted that sessions of the UEMOA Council of Ministers be held quarterly and,<br />
consequently, the Regulation empowers the Chairman of the Council of Ministers, on the proposal of the<br />
Governor of the BCEAO to amend or complete the list of persons, entities or agencies whose assets must<br />
be frozen, subject to subsequent validation by the said Council.<br />
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356. During the entire period of suspension measure, these funds or other financial resources should<br />
not be put, directly or indirectly at the disposal or used for the benefit of the persons, entities or agencies<br />
concerned.<br />
357. Under Article 8 on monitoring of the application of the Regulation, “this Regulation shall be<br />
applicable; notwithstanding the existence of the rights conferred or obligations imposed by virtue of any<br />
international agreement, any contract signed or all authorizations or permits granted before the coming<br />
into force … the BCEAO and the Banking Commission are charged with the monitoring of the application<br />
of this Regulation”.<br />
358. In practice, like the provision for dissemination of the lists retained by Regulation 14/2002, there<br />
is an informal mechanism for transmission of the lists through embassies. Hence, the Embassy of Benin at<br />
the UNO transmits the list to the Ministry of Foreign Affairs, which notifies the updated lists to the<br />
Ministry of Economy and Finance, which, in turn, is in charge of transmitting it to its competent<br />
structures, in particular the Monetary and Financial Affairs Department and CENTIF, for wide<br />
dissemination. However, only banks affirm to have knowledge of these lists of which they receive<br />
disclosure. All the other entities subject to the act are unaware of them.<br />
359. Furthermore, the heads of credit agencies met complained about the difficulty in exploiting the<br />
lists of the United Nations.<br />
SR III.2 Freezing of Funds targeted by Resolution 1373 (2001)<br />
360. Regulation 14/2002 targets both Resolution 1267 (1999) and Resolution 1373 (2001) of the<br />
Security Council of the United Nations Organization. However, only Resolution 1267 was mentioned in<br />
Article 2 of the said Regulation. Benin has no provision enabling it to prepare its own lists of persons and<br />
entities whose assets must be frozen and, consequently, proceed to freeze them. There are no specific<br />
provisions for implementing Resolution 1373 (2001).<br />
SR III.3 Freezing mechanism adopted by other countries<br />
361. Laws and procedures making it possible to analyze initiatives taken as freezing mechanisms of<br />
other countries and enforce them, eventually, have not been put in place by Benin.<br />
SR III.4 and 5 Application of the freezing measures to funds and other property controlled by the<br />
persons targeted and their disclosure to the financial sector<br />
362. These measures have not been put in place by Benin.<br />
SR III.7 Requests for withdrawal from list and freezing of funds<br />
363. In Benin, there are no efficient procedures known to the public for timely examination of requests<br />
for withdrawal from the list of persons targeted and unfreezing of funds or other property of persons or<br />
entities withdrawn from the lists, in accordance with international commitments.<br />
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SR III.8 Procedures for releasing funds of persons inadvertently affected by a freezing mechanism<br />
364. Regulation 14/2002 does not institute procedures that could be brought to the knowledge of the<br />
public for releasing within the shortest possible time funds or other property of persons or entities<br />
inadvertently affected by a freezing mechanism, after verification that the person or entity is not the one<br />
targeted.<br />
SR III.9 Access to funds to cover basic expenditures<br />
365. The above-mentioned Regulation does not institute adapted procedures for authorizing access to<br />
funds or other property that have been frozen by virtue of Resolution S/RES/1267 and of which it would<br />
be decided that they would be used to cover basic expenditures, payment of certain types of commissions,<br />
fees and remunerations for services as well as extraordinary expenditures. Certainly, the last paragraph of<br />
Article 4 of the Regulation stipulates that the freezing does not apply to funds and financial resources that<br />
are the subject of a derogation granted by the Penalties Committee and that these derogations may be<br />
obtained through the Central Bank, but makes no provision for a detailed procedure to do so.<br />
SR III.10 Procedures for contesting the freezing with a view to its review by a court<br />
366. The lack of appropriate procedures allowing a person or an entity whose funds and other property<br />
have been frozen to contest this measure with a view to its review by a court is explained by the lack of a<br />
legal system for implementing Resolutions, especially Resolution 1373.<br />
SR III.11 Freezing, seizure and confiscation in other circumstances<br />
367. The freezing, seizure and confiscation measures provided for in the framework of money<br />
laundering should also be taken in the case of terrorism financing.<br />
368. According to the authorities met, the relevant common law mechanisms could eventually be used.<br />
But there is no law on the fight against the financing of terrorism.<br />
SRI II.12 Protection of the rights of third parties of good faith<br />
369. Article 8 of the International Convention for the Repression of Financing of Terrorism provides<br />
for the protection of the rights of third parties of good faith. Measures to be taken to that end should be in<br />
line with the provisions of this article. However, Benin does not have a legislation on the financing of<br />
terrorism and, therefore, such protection does not exist.<br />
SR III.13 Monitoring the respect of the obligations set out in SR III<br />
370. According to Article 8 of Regulation 14/2002/CM/UEMOA, the BCEAO and the Banking<br />
Commission are charged with monitoring its enforcement. In that regard, they may impose penalties for<br />
the non respect by banks and financial institutions of the system put in place. The banks met confirmed<br />
that the control is done and that they transmit their reports on regular basis.<br />
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371. However, the evaluation mission could not have access to these reports, which are transmitted<br />
directly to the BCEAO headquarters through its National Agency.<br />
372. There is also a need to underline the fact that the Regulation applies only to financial institutions<br />
and that, in practice, nothing is provided for the other subjected institutions.<br />
373. This is explained by the fact that the system put in place for Resolution 1267 is not yet well oiled,<br />
and by the absence, in Benin, of a legal provision for implementing Resolution 1373 of the UN Security<br />
Council.<br />
2.4.2 Recommendations and Comments<br />
374. Among all the entities concerned met by the evaluation mission, only the banks affirmed being<br />
aware of the lists disseminated by the BCEAO or the Ministry of Economy and Finance. Hence, there<br />
seems to be a need for increased information and sensitization of the other persons subject to the act.<br />
375. The Beninese authorities should:<br />
� Complete the mechanism for the freezing of funds under Resolution 1267 (1999);<br />
� Implement Resolution 1373 (2001).<br />
2.4.3. Compliance with Special Recommendation III<br />
R S III NC<br />
Rating Summary of Factors Underlying Rating<br />
Highly incomplete nature of the system for freezing funds under<br />
Resolution 1267 (1999)<br />
Lack of implementation of Resolution 1373 (2001)<br />
2.5 THE FINANCIAL INTELLIGENCE UNIT AND ITS FUNCTIONS (R.26, 30 &<br />
32)<br />
2.5.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� Act 2006-14 of 31 October 2006 on combating ML;<br />
� Decree 2006-752 of 31 December 2006 on creation, organization and functioning of CENTIF;<br />
� Decree 2008-248 of 7 May 2008 on appointment of members of CENTIF;<br />
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� Ministerial Order 2008 120/MEF/CENTIF of 18 February 2009, fixing a model of Suspicious<br />
Transaction Report (S.T.R);<br />
� By-Laws of CENTIF approved by the Ministry of Economy and Finance, on 19 February 2009;<br />
� Order 171/MEF/CENTIF of 19 February 2009 on delegation of signature by the Ministry of<br />
Economy and Finance.<br />
Establishment of the FIU (C.26.1)<br />
376. Article 16 of Act 2006-14 of 31 October 2006 on anti-money laundering in Benin, hereinafter<br />
called AML Act, stipulates as follows: “It is hereby instituted by decree a National Financial Information<br />
Processing Unit (CENTIF), placed under the responsibility of the Minister of Finance”. CENTIF is a<br />
central structure.<br />
377. In application of this article, Decree 2006-752 of 31 December 2006 on creation, organization and<br />
functioning de CENTIF was issued. This text is based on the provisions of the AML Act relating to<br />
CENTIF and specifies its scope.<br />
378. Article 17 of the Act fixing the attributions of CENTIF indicates that CENTIF is an administrative<br />
service endowed with financial autonomy and autonomous decision-making powers on issues within its<br />
competence. Its mission is to collect and process financial information on money laundering circuits.<br />
379. CENTIF, which thus appears like a central structure, has been operational since 20 June 2008,<br />
date of the swearing in of its members.<br />
380. By virtue of Article 17 of the Act, CENTIF receives all other necessary information for the<br />
accomplishment of its mission, in particular, those communicated by the oversight authorities, as well as<br />
any natural or legal person other than Judiciary Police Officers. CENTIF may also request for the<br />
disclosure by the entities as well as any natural or legal person, of information held by them and likely to<br />
help enrich the suspicious transaction reports.<br />
381. It should be noted that the attributions of CENTIF do not yet cover the aspect concerning the fight<br />
against the financing of terrorism. The CFT Guideline of WAEMU requests member-States to take<br />
appropriate measures to extend the attributions of CENTIF to enable it to collect and process information<br />
on the financing of terrorism. But, the law for transposing the Guideline has not yet been adopted in<br />
Benin.<br />
382. A By-law, approved by the Ministry of Economy and Finance, on 19 February 2009, sets forth the<br />
operational rules of CENTIF.<br />
383. This Regulation gives the powers of direction of CENTIF to its President who supervises,<br />
coordinates and boosts its activities and is the sole holder of signing authority for various documents and<br />
takes any action that should engage the responsibility of the Unit. The President may delegate his powers<br />
in specific areas to other members of the Unit.<br />
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384. By Order 171/MEF/CENTIF of 19 February 2009 on delegation of signature, the Minister of<br />
Finance has given authority to the President to sign on his behalf all administrative acts that fall within his<br />
attributions within CENTIF, apart from those of financial nature.<br />
Advice on the STR procedures (C. 26.2)<br />
385. By Ministerial Order 2008 120/MEF/CENTIF of 18 February 2009, a model of Suspicious<br />
Transaction Report (S.T.R) was instituted, in application of the provisions of Articles 26 and 27 of the<br />
AML Act. The form contains three sheets. The first sheet is the presentation page (presentation of the<br />
declarant, general information), the second is for detailed analysis of the key facts and elements (money<br />
laundering analysis and indices) and the third is for identification of the person(s) suspected (information<br />
on the person who is the subject of suspicion).<br />
386. The suspicious transaction reports should be prepared according to this model, but in case of<br />
emergency the reports may be made by telephone or sent by any other electronic medium subject to a<br />
written confirmation within forty-eight hours (Article 27 of the AML Act).<br />
387. The procedures to be followed in case of reports are specified in the By-Laws of CENTIF,<br />
approved by the Ministry of Economy and Finance.<br />
Access to information from criminal prosecution authorities (C. 26-3)<br />
388. Under Article 17 of the Act, CENTIF receives all necessary information for the accomplishment<br />
of its mission, in particular information communicated by the supervisory authorities, as well as judicial<br />
police Officers. CENTIF may also request for disclosure by persons subject to the act, as well as any<br />
natural or legal person, information held by them and likely to help enrich the suspicious transaction<br />
reports. The latter are contacted by administrative letter or often by requisition.<br />
389. The AML Act also stipulates that in the exercise of its attributions, CENTIF may use<br />
correspondents within the Police, Gendarmerie, Customs Services, as well as government judicial services<br />
and any other service that can make necessary contribution in the framework of the AML Act (Article 19).<br />
These correspondents collaborate with CENTIF, in the exercise of its attributions, in particular for the<br />
collection of information. Although they have already been designated by the interested Services, their<br />
appointment decrees had not yet been issued and they had not yet been sworn in at the time of the<br />
mission’s visit.<br />
Additional information (C. 26-4)<br />
390. In addition to its extended powers of access to information mentioned above, CENTIF may<br />
request for additional information from the declarant as well as any other public or regulatory authority<br />
the treatment of STR (Article 28 of the AML Act).. Dissemination of information to the<br />
authorities for investigation purposes (C. 26-5):<br />
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391. Article 29 sub-paragraph 1 of the AML Act stipulates that, when the transactions highlight acts<br />
likely to constitute the money laundering offence, CENTIF transmits a report on these acts to the State<br />
Prosecutor, who immediately refers the case to the examining judge.<br />
392. Under the terms of the By-Laws of CENTIF, it is the President who refers cases to the territorially<br />
competent State Prosecutor, after due notice of the Committee on Analysis of Case Dockets, of acts likely<br />
to constitute the money laundering offence. The Committee is composed of all members appointed from<br />
CENTIF and meets at least once a week. Its decisions are taken by the simple majority of votes cast (the<br />
Regulation is silent on this point) and in case of a tie, the President will cast the winning vote.<br />
393. In case of emergency and if there is sufficient evidence, the President may refer the case to the<br />
Principal State Prosecutor, without the a priori view of the Committee.<br />
394. No case was referred to the Principal State Prosecutor by CENTIF during the passage of the<br />
mission.<br />
Operational independence and autonomy (C.26-6)<br />
395. Article 17 of the Act stipulates that CENTIF is an administrative service endowed with financial<br />
autonomy and autonomous decision-making power on matters within its competence.<br />
396. The expenditures of CENTIF are the subject of a budgetary allocation, for which the necessary<br />
amounts are put at its disposal by the financial services of the Ministry of Economy and Finance. These<br />
expenditures are executed in accordance with the procedures governing public finance in Benin.<br />
Protection of information (C. 26-7)<br />
397. Article 20 of the Act on confidentiality stipulates that the members and correspondents of<br />
CENTIF swear an oath before assuming office. They are under obligation to respect the secrecy of the<br />
information collected, which may not be used for other purposes than those provided for in the said Act.<br />
The members of the Unit swore an oath before the Cotonou First Class Court of First Instance on 20 June<br />
2008.<br />
398. In accordance with Article 24, CENTIF may, subject to reciprocity, exchange information with<br />
the financial intelligence services of third-party States, in charge of receiving and treating suspicious<br />
transaction reports when the latter are subjected to similar professional secrecy obligations.<br />
399. The security of the CENTIF premises is ensured by two unarmed agents of a security company.<br />
The members of CENTIF informed the mission about the consent of the authorities to provide them with<br />
security agents to ensure the security of the premises. Hence, discussions are ongoing with SAGAM for<br />
installation of a video surveillance system. Copies of the different proforma invoices were presented to the<br />
mission.<br />
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400. The STRs are kept in a safe held by the President of CENTIF. Article 10 of Decree 2006-752 of<br />
31 December 2006 on creation, attributions …of CENTIF provides for the creation a databank for useful<br />
information concerning STRs. For the moment, the data bank is not operational.<br />
Publication of periodic reports (C. 26-8)<br />
401. Under the terms of Article 17 sub-paragraph 7 of the Act, CENTIF prepares periodic reports (at<br />
least one report per quarter) and an annual report, which analyzes the trend of anti-money laundering<br />
activities at the national and international levels.<br />
402. CENTIF transmitted to the responsible authority and the national branch of BCEAO, the 2008<br />
Annual Report, which covered all the activities carried out from June to 31 December 2008. It presented<br />
copies of the 2008 Report and that of the 1 st quarter 2009 to the mission. The two reports give account of<br />
activities carried out in capacity building, sensitization, statistics and analysis of ML typologies on the<br />
basis of the STRs received.<br />
403. CENTIF exchanged information with two CENTFIs in WAEMU countries.<br />
404. A request for signing a bilateral cooperation agreement was sent to TRACFIN, in France, for<br />
exchange of information. France has approved in principle the request subject to ensuring compliance with<br />
the requisite confidentiality and security standards.<br />
Membership of the EGMONT Group (C.26-9 and C.26-10)<br />
405. CENTIF has not yet submitted a request for membership of the Egmont Group. However, the<br />
officials of CENTIF informed the mission about a request sent to the Secretariat of <strong>GIABA</strong> about the<br />
relevant procedure to be followed.<br />
406. The conditions of membership should be quickly observed in order to address the difficulties<br />
faced by CENTIF in conducting its investigations abroad (international cooperation), due to lack of<br />
recognition (cf. Section 6.5- Exchanges among FIUs).<br />
Recommendation 30<br />
Resources, staff, financial and operational autonomy (C.30-1)<br />
407. Article 22 of the AML Act stipulates that “the resources of CENTIF are derived mainly from<br />
contributions by the State, WAEMU institutions and development partners”.<br />
408. For the moment, the financial resources of CENTIF are derived solely from the National Budget.<br />
These resources made it possible for CENTIF to start its activities. They could be completed as the Unit<br />
develops its activities. It benefited from a budget line for 2009. The amount of the budget represents a<br />
contribution from the Government, but does not cover expenditures relating to the financing of all the<br />
mission entrusted to CENTIF (training, sensitization and creation of the computerized database).<br />
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409. CENTIF draws its members from various administrations (Customs, Police, Justice, Treasury).<br />
They were appointed after carrying out a morality investigation on them based on their professional skills<br />
by Decree 2008-248 of 7 May 2008, as follows:<br />
� President: Senior official from Ministry of Economy and Finance;<br />
� 1 Magistrate specialized in financial issues from the Ministry of justice;<br />
� 1 Police Commissioner seconded by the Ministry of Interior and Security;<br />
� 1 Representative from BCEAO, ensuring the Secretariat;<br />
� 1 Customs Inspector in charge of investigations seconded by the Ministry of Economy and<br />
Finance;<br />
� 1 Principal Police Inspector seconded by the Ministry of Interior and Security.<br />
410. The By-Laws define the structure of CENTIF, which comprises, apart from the Presidency, the<br />
General Secretariat, three Departments and five Divisions. CENTIF may also recruit administrative and<br />
technical staff on the basis of the Collective Agreement of banks and financial institutions or provided by<br />
the administrative authorities. Provision is made for the emoluments for its appointed members.<br />
On the whole, it appears necessary to increase the staff, particularly by recruiting analysts, computer<br />
scientists and support staff.<br />
Respect of standards of confidentiality, integrity and skills of staff (C. 30-2)<br />
411. By virtue of Article 20 of the AML Act, the members and correspondents of CENTIF swear an<br />
oath prior to assuming office. They are bound by the respect of the secrecy of the information collected,<br />
which may not be used for other purposes than those of this Act.<br />
412. The Judicial Police Officers who contribute to judicial investigations in liaison with CENTIF are<br />
related to the obligation of professional secrecy, in accordance with Article 11 of the Code of Criminal<br />
Procedure.<br />
413. Furthermore, all the appointed members of CENTIF subscribed to, in the form of a commitment<br />
by signature, an “Operational Charter of CENTIF” organized into ten “cardinal values”, including in<br />
particular, Confidentiality, Professional Secrecy, Sense of Ethics, Professionalism, Efficiency and<br />
Efficient Management of Conflicts of interest.<br />
Staff training (30-3)<br />
414. In the framework of the strengthening of its operational capacities, CENTIF has provided for a<br />
series of training courses for its members and sensitization workshops for actors involved in the fight<br />
against money laundering.<br />
415. Members of CENTIF participated in training courses organized by <strong>GIABA</strong> in collaboration with<br />
IMA/ADB, the French Treasury, the American Treasury, World Bank, IMF and other Development<br />
Partners. The training received covered LFT, notwithstanding the existence of a national ad hoc law.<br />
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416. The training situation is presented as follows:<br />
� 2008: seminar of money laundering organized in Paris, for FIUs of Francophone membercountries<br />
of <strong>GIABA</strong>, in collaboration with the French Treasury;<br />
� 2008: study tour to CENTIF of Senegal;<br />
� 2008: workshop seminar organized in Tunis by IMA/ADB, for FIUs;<br />
� 2009: study tour to CENTIF Belgium;<br />
� 2009: seminar organized in Abidjan by <strong>GIABA</strong> for investigators of FIUs;<br />
� 2009: seminar organized in Abidjan by <strong>GIABA</strong> in collaboration with the American Treasury<br />
and the Commonwealth Secretariat, for analysts of FIUs from member-countries of <strong>GIABA</strong>.<br />
417. It should be noted that CENTIF organized, in the framework of the preparation of the mutual<br />
evaluation, a seminar that brought together both public and private agencies intervening in the process of<br />
anti-money laundering and combating the financing of terrorism.<br />
418. A confidence relationship was established between CENTIF and all declaring entities at the end of<br />
this seminar, thus creating a favourable environment for a more efficient development of the preventive<br />
system.<br />
419. In the framework of the cooperation between the FIU and the different anti-money laundering<br />
actors, sensitization and information sessions on the methods, trends and techniques of Money laundering<br />
were initiated by members of CENTIF. On the occasion of these meetings, forms of collaboration between<br />
CENTIF and the concerned Structure are also defined.<br />
420. In this context, CENTIF visited the following structures:<br />
� Professional Association of Banks and Financial Institutions;<br />
� The Parquet d’Instance de Première Classe de Cotonou;<br />
� The Police;<br />
� The Gendarmerie;<br />
� The Customs.<br />
The pursuit of meetings with the other actors of the control system is programmed.<br />
C. 30-4 Prospects for training the actors<br />
421. CENTIF has developed a training plan for actors involved in the fight against ML<br />
Recommendation 32<br />
422. Benin has no system for verifying regularly the efficiency of its AML system.<br />
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423. CENTIF received seven suspicious transaction reports from banks and the Police. Some dockets<br />
are being treated while others have already been transmitted to the State Prosecutor of the Cotonou First<br />
Class Court.<br />
424. It appears through the statistics of STRs that further efforts should be deployed in the sensitization<br />
of the entities concerned in the honour of their obligations.<br />
YEAR<br />
No. of<br />
STRs<br />
Declaring<br />
entity<br />
Equivalent in<br />
CFA<br />
Indices<br />
2008 02 Bank-Police 136,000,000 Support documents of<br />
doubtful transfers –<br />
Forgery<br />
1 st Quarter<br />
2009<br />
2 nd Quarter<br />
2009<br />
02 Bank 4,009,772,268 Forged transfers – Lack<br />
of convincing support<br />
documents – Forgery<br />
03 Bank 1,701,769,792 Forged transfers – Lack<br />
of convincing support<br />
documents – Forgery<br />
TOTAL 07 5,847,542,060<br />
2.5.2 Recommendations and Comments<br />
Level of<br />
treatment of the<br />
docket<br />
Being treated at<br />
CENTIF<br />
Being at CENTIF<br />
Being at CENTIF<br />
425. CENTIF constitutes a key element in the anti-money laundering system. The majority of services<br />
and agencies visited share this established fact.<br />
426. CENTIF has, since its creation, carried out several activities, in particular:<br />
- Development of the By-laws fixing the internal rules of its functioning;<br />
- Development of the operations charter of CENTIF which serves as code of ethics;<br />
- Organization of sensitization seminars for entities concerned;<br />
- Development of a model of suspicious transaction report.<br />
These activities helped to launch the bases of anti-money laundering.<br />
427. However, other actions are required in order to intensify the fight. They include:<br />
- Adoption of the Act on the financing of terrorism by transposing Guideline 4/CM/UEMOA<br />
relating to the financing of terrorism, in order to extend the attributions of CENTIF to FT.<br />
- Intensification of the sensitization campaign among all the entities concerned;<br />
75
- Formal appointment of correspondents in the Administrations by order to be issued by the<br />
responsible Ministers;<br />
- Implementation of the necessary requirement for membership of the Egmont Group, in particular<br />
by soliciting the sponsorship of a FIU member of the Group.<br />
- Implementation of the provisions for protecting the building housing CENTIF and the data by<br />
ensuring the protection of the premises by security agents, filtering of entries to the building,<br />
installing a camera video system and constitution of a computerized database;<br />
- Strengthening the staff position, in particular with the recruitment of analysts, computer<br />
specialists, and support staff;<br />
- Development of a manual of procedures for treating STRs;<br />
- Enrichment of the training programme by introducing topics covering the field of predicate<br />
offences, typologies of money laundering, freezing, seizure, confiscation and techniques for<br />
tracing assets that constitute proceeds of criminal acts;<br />
- Institution of a mechanism to enable it to carry out a self-evaluation and evaluation of the<br />
AML/FT system and advise more entities subject to the act, in particular in the drafting of STRs.<br />
- Computerization of its statistics management system and approaching AML/FT actors in order to<br />
regularly obtain statistics on predicate offences so as to efficiently assess the money laundering<br />
risk in the country.<br />
- Establishment of a system for verifying the effectiveness of the AML system.<br />
- Membership of the Egmont Group, in particular to facilitate the necessary international<br />
cooperation, especially for investigations in connection STRs.<br />
2.5.3 Compliance with Recommendation 26<br />
Rating Summary of Factors Underlying Rating<br />
R 26 PC Powers of CENTIF do not cover the financing of terrorism;<br />
Dissemination of a model of suspicious transaction report fixed by<br />
ministerial order not disseminated to all liable entities;<br />
Lack of observation of the required security standards for access to the<br />
premises, protection of the members and an information held by the Unit;<br />
No guarantee of autonomy as a result of inadequate credit allocated and<br />
procedure used<br />
No Egmont Group membership<br />
Inadequacy of human resources<br />
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2.6 AUTHORITIES CHARGÉD WITH INVESTIFGATIONS, CRIMINAL<br />
PROSECUTION AUTHORITIES AND OTHER COMPETENT AUTHORITIES –<br />
FRAMEWORK FOR THE INVESTIGATION AND PROSECUTION OF THE OFFENCE<br />
AND THAT OF CONFISCATION AND FREEZING (R.27, 28, 30 & 32)<br />
2.6.1 DESCRIPTION AND ANALYSIS<br />
LEGAL FRAMEWORK<br />
� Act 97-025 of 18 July 1997 on the fight against illicit trafficking of drugs and precursors (Articles<br />
102 to 108);<br />
� Act 2006-14 of 31 October 2006 on the fight against ML;<br />
� Order 25/PR/MJL of 7 August 1967 on the Code of Criminal Procedure:<br />
� Criminal Code of French West Africa;<br />
� Order 54/PR/MFAE/DD of 21-11-1966 on the Customs Code in the Republic of Benin;<br />
� Code of Criminal Procedure;<br />
� Customs Code;<br />
� Decree 99-141 of 15 March 1999 on creation and attributions of the Central Bureau for<br />
Repression of Illicit Trafficking of Drugs and Precursors (OCERTID);<br />
� Decree 2005-812 of 29 December 2005 on appointment of Magistrates.<br />
Recommendation 27<br />
Designation of the criminal prosecution authorities (C. 27.1)<br />
428. The criminal prosecution authorities in charge of conducting appropriate investigations on money<br />
laundering and financing of terrorism offences are those of common law set out in Order 25 PR/MJLH, on<br />
the Code of Criminal Procedure.<br />
429. Pursuant to the provisions of Article 14 of the Code of Criminal Procedure, the Judicial Police is<br />
charged with recording violations of the criminal law, gathering the evidence and looking for the<br />
perpetrators, as long as an inquiry is not opened. It is exercised under the direction of the Principal State<br />
Prosecutor. Falling within the competence of the Appeal Court, it is placed under the surveillance of the<br />
Principal State Prosecutor and under the supervision of the Court of Criminal Appeal.<br />
430. Considered as Judicial Police Officer (JPO) are:<br />
� Officers, Warrant Officers Class 1, Warrant Officers, Master Sergeants of the Gendarmerie,<br />
Sergeants of the Gendarmerie, holders of at least the Brevet d’Etudes du Premier Cycle or<br />
77
equivalent certificate, or having accumulated a minimum of five years of service in the<br />
Gendarmerie appointed by name, after a professional examination, by joint order of the<br />
Ministers of Justice and Defence;<br />
� Police Commissioners and police Officers, Police Inspectors, holders of at least the Brevet<br />
d’Etudes du Premier Cycle or equivalent certificate, or having accumulated five years of<br />
service in the Police, appointed by name, after a professional examination, by joint order of<br />
the Ministers of Justice and Interior.<br />
431. The Principal State Prosecutor represents in person or through his assistants the State Prosecutor<br />
in each Appeal Court and in the Court of Assizes.<br />
432. In accordance with Article 28 of the Code of Criminal Procedure, he is in charge of ensuring the<br />
enforcement of the criminal law within the entire competence of the Appeal Court. To that end, each<br />
Principal State Prosecutor sent him, every month, the status of cases within his competence. Also, in the<br />
performance of his duties, he has the right to request the help of the law enforcement authority.<br />
433. The Principal State Prosecutor represents in person or through his assistants the State Prosecutor<br />
in each Court of First Instance (Article 32 of the Code of Criminal Procedure). He receives complaints and<br />
denunciations and assesses the follow-up action (Article 33 paragraph 1 of the Code of Criminal<br />
Procedure). Hence, he takes or ensures the taking of all necessary actions for the search and prosecution of<br />
violations of the criminal code (Article 34 paragraph 1 of the Code of Criminal Procedure).<br />
434. By Decree 2005-812 of 29 December 2005 on appointment of Magistrates, an examining judge<br />
was appointed at the Cotonou First Class Court of First Instance to handle economic and financial<br />
crimes. He is the judge of the 2 nd Investigation Chamber. It should be underlined, on the one hand, that<br />
the notion of economic and financial crime is not defined and that in case of offence (and not crime), the<br />
jurisdiction of this magistrate does not seem likely to be exerted. Moreover, this judge has no national<br />
territorial jurisdiction. On the other hand, it is important to note the lack of specialization of an<br />
investigation chamber in the area of AML/FT in all the Courts of 1 st Instance.<br />
435. Moreover, there is, within the Management of the Judicial Police, an Economic and Financial<br />
Brigade, which is a Service with national jurisdiction, in charge of the prevention, research and repression<br />
of economic and financial offences.<br />
Ability to postpone/waive arrest of suspects or seizure of property (C. 27.2)<br />
436. Act 97-025 of 18 July 1997 on the fight against trafficking of illicit drugs and precursors and<br />
Decree 99-141 of 15 March 1999 on creation and attribution of the OCERTID specifically provide for the<br />
possibility of waiving the arrest of suspicious persons and/or seizure of funds, or not proceeding to such<br />
arrests and seizures in a judicial investigation.<br />
Additional Elements<br />
Authorization of special investigative techniques (controlled deliveries, stake-outs and wiretapping,<br />
etc.) (C.27.3)<br />
437. Special techniques like supervised delivery are used in investigations relating to drug control.<br />
These techniques are at the discretion of the competent authorities but they are not specifically targeted at<br />
78
AML/FT. However, according to the authorities met, they may be used in case of need in investigations<br />
relating to AML/FT. The Beninese authorities admitted that, for greater efficiency, it would be necessary<br />
to include these techniques in the AML/FT texts.<br />
Power to compel production of and search for all documents and information (C. 28.1)<br />
438. The examining judge to whom a money laundering case has been referred may in the framework<br />
of his investigational powers and by virtue of Article 33 of the AML Act:<br />
� Place under surveillance bank accounts and assimilated accounts in relation with the case<br />
treated;<br />
� Access computer systems, networks and servers used or likely to be used by the persons<br />
involved;<br />
� Request for the disclosure of deeds or documents necessary for establishing the truth and<br />
order the seizure of the deeds and documents in question.<br />
439. Apart from these powers of the examining judge, the competent authorities in charge of<br />
conducting investigations on acts of money laundering or financing of terrorism and on other<br />
corresponding predicate offences, are given the necessary prerogatives to search the homes or facilities,<br />
search for, seize and obtain documents pertaining to cases of money laundering and financing of terrorism<br />
and other predicate offences in accordance with Articles 33 of the AML Act, Articles 34,43,65,131,132<br />
and 133 of the Code of Criminal Procedure and Articles 118 and 119 of Act 97-025 of 18 July 1997 on the<br />
control of drugs and precursors as well as Article 53 of Order 54/PR/MFAE/DD of 21 November 1966 on<br />
the Customs Code for Benin.<br />
C.28.2 Power to take and use witnesses’ statements<br />
440. The competent authorities in charge of conducting investigations on acts of money laundering or<br />
financing of terrorism are empowered, by virtue of Articles 34 of the AML Act, 49 and 69 of the Code of<br />
Criminal Procedure, to obtain and use testimonies in the framework of investigations and prosecution on<br />
act mentioned above. CENTIF, for its part, has power to request for additional information to enrich the<br />
suspicious transaction reports and complete the instruction of cases referred to it.<br />
Recommendation 30 (the authorities in charge of enforcement of the Act and criminal prosecution)<br />
Operational independence and autonomy (C.30.1) –Professional standards, integrity (C.30.2)-<br />
Formation (C.30.3.)<br />
441. The Customs, an institution of the competent authorities involved in the fight against ML/FT, is<br />
structured in accordance with Order 217/MF/DC/CC of 09 July 1993 on the attribution, organization and<br />
functioning of the Customs Administration.<br />
442. Financed by the national budget, it has a staff and enjoys some operational autonomy.<br />
79
443. It is the Fraud Control Department that centralizes all the information relating to AML at the<br />
Customs Branch, but, for the moment, it has no adequate human resources to allocate staff to AML/FT<br />
alone.<br />
444. According to Article 43 sub-paragraph1 of Order 54/PR/MFAE/DD of 21 November 1966 on the<br />
Customs Code “customs officers of any grade should swear an oath before the court of First Instance in<br />
the jurisdiction of which is found the residence where they are appointed”; which imposes on them an<br />
obligation of confidentiality and integrity.<br />
445. Similarly, Decree 93-103 of 10 May 1993 on the particular status of customs officers classifies the<br />
latter into different categories of customs officers and determines their area of jurisdiction.<br />
446. The Customs staff benefit from continuing training in areas within its competence. These training<br />
courses are mainly organized by the World Customs Organization. Nevertheless, a specific training on<br />
AML/FT has not yet been organized for customs officers taking all grades together.<br />
447. Police officers and soldiers of the Gendarmerie are recruited by competitive examination. They<br />
are subjected to morality investigation and attend training courses on professional ethics both at the initial<br />
training level and in the course of their career in the performance of their duties. Appropriate penalties are<br />
imposed on dishonest officers who may even be expelled from their corps.<br />
448. Concerning the staffing position, it is largely inadequate, especially in the National Police Service.<br />
In fact, the Economic and Financial Brigade in charge, among other things, to conduct investigations on<br />
money laundering offences has only thirteen (13) officers whereas it has jurisdiction over the entire<br />
national territory. It should, however, be noted that the police has increased its staff significantly with the<br />
effective recruitment of five hundred (500) agents in 2007 and the ongoing recruitment of one thousand<br />
three hundred (1300) agents, who were under training when the mission visited the National Police<br />
Academy.<br />
449. The National Gendarmerie has about 3000 agents.<br />
450. During the meetings with the competent authorities, CENTIF had sensitization sessions with<br />
officials of the Justice, Customs Administrations, the National Police, the National Gendarmerie, as well<br />
as the Professional Association of Banks and Financial Institutions. On these occasions, CENTIF<br />
informed each of these structures that it can ensure their training on the fight against money laundering<br />
and financing of terrorism. But, it should be noted that CENTIF has not established a time-table for this<br />
training. It is at the stage of establishing contacts with international and sub-regional organizations that<br />
could assist it to put in place the training programme.<br />
451. However, there are still challenges to be met in the area of capacity building. Indeed, there is still<br />
a major need for training in the area of AML/FT for the actors involved in the fight.<br />
452. Eventually, it should be agreed that, for the moment, no training on AML/FT has been<br />
implemented for criminal prosecution and investigation agents.<br />
453. The independence of the Justice system is guaranteed by the Constitution. The general assemblies<br />
of the Justice Department held in 1996 helped to identify a number of dysfunctions of the Judicial<br />
Institution. A conceptual and formalized framework has been established in “Plan for Enhancing the<br />
Independence and Accountability of Magistrates”. This document presents the situation, a diagnostic<br />
analysis of the issues and an operational strategy through a triennial action plan. The mission could not<br />
obtain information on the status of implementation of this ambitious plan.<br />
80
454. The discussions, in particular with the General Inspectorate of the Ministry (IGM), revealed the<br />
lack of State Prosecutors in some jurisdictions and inadequate number of Examining judges. Also, the<br />
number of Court Clerks, Assistant Court Clerks and inspector-Magistrates is inadequate.<br />
455. Furthermore, because of the risks of corruption, training activities in the area of AML through the<br />
enhancement of professional code of ethics should be envisaged. In this regard, a Plan on the<br />
Independence and Accountability of Magistrates has been developed and its implementation should be<br />
funded with the help of the American Government (Millennium Challenge Account –MCA) and the<br />
European Union. A bill aimed at instituting the autonomy of Appeal Courts is also being examined.<br />
456. It should finally be noted that the project “Access to Justice” of MCA-Benin, whose objective is<br />
to improve the functioning of the Beninese Justice System took charge of the construction of about ten<br />
infrastructural facilities, in particular a Legal Documentation Centre in Cotonou, an Appeal Court at<br />
Abomey and eight courts of first instance at Abomey-Calavi, Allada, Comè, Pobè, Adjohoun, Savalou,<br />
Nikki and Malanville.<br />
2.6.2. Recommendations and Comments<br />
457. It is recommended to the Beninese authorities to implement the following measures:<br />
� Waiving of arrest of persons or seizures, or refraining from effecting such arrests or seizures<br />
should be specifically prescribed in the area of AML/FT;<br />
� Extending to Money Laundering and Financing of Terrorism the possibility offered to the<br />
prosecution and investigation authorities to waive the arrest of a suspicious person or seizure<br />
of funds. Indeed, this possibility is only specifically provided in investigation of cases of<br />
trafficking of narcotic drugs and psychotropic substances;<br />
� Specialization of AML/FT structures;<br />
� Increasing human, technical and material resources of structures involved in the fight against<br />
money laundering and the financing of Terrorism;<br />
� Specific and pertinent training in AML/FT for the investigation and prosecution authorities.<br />
2.6.3 Compliance with Recommendations 27, 28, 30<br />
Rating Summary of Factors Underlying Rating<br />
The waiving of arrests of persons or seizures, or refraining from effecting<br />
such arrests or seizures is not specifically prescribed in the fight against<br />
money laundering.<br />
R 27 PC Lack of jurisdiction in the area of CFT<br />
Lack of specialization of the control structures<br />
Inadequacy of resources and training<br />
R 28 LC Lack of effectiveness<br />
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2.7 DECLARATION OR DISCLOSURE OF CROSS-BORDER TRANSACTIONS<br />
(SR.IX)<br />
2.7.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� Act 2006-14 of 31 October 2006 on the AML (Article 6);<br />
� Act 97-025 of 18 July 1997 on control of drugs and precursors;<br />
� Guideline 04/2007/CM/UEMOA, (Article 17);<br />
� Regulation R09/CM/UEMOA of 20/12/1998 on external financial relations of WAEMU member-<br />
States (Articles 22 - 29);<br />
� Act 86-05 of 26 February 1986 concerning litigations over exchange control offences;<br />
� Customs Code;<br />
� Cooperation Agreement in the area of Criminal Police within ECOWAS;<br />
� Protocol on creation of the Criminal Investigation Bureau within ECOWAS (2006).<br />
System to detect physical cross-border transportation of currency and negotiable bearer<br />
instruments in connection with ML/FT from and to abroad (information declaration or disclosure<br />
system) (C.IX-1)<br />
458. Benin is a member of the franc zone, the West African Monetary Union and the West African<br />
Economic and Monetary Union. For this reason, its financial relations with the external world are<br />
governed by Community Regulation R09/98/CM/UEMOA of 20/12/1998 relating to the external financial<br />
relations of WAEMU member-States and its annexes, but also by Act 86-05 of 26 February 1986 relating<br />
to litigations over exchange control offences.<br />
459. Article 6 Act 2006-14 of 31 October 2006, hereinafter called ML Act, stipulates that “exchange<br />
transactions, capital flows and settlements of any nature with a third-party State should be done in<br />
accordance with the exchange regulations in force”.<br />
460. Regulation R09/CM/UEMOA of 20/12/1998 relating to foreign financial relations of WAEMU<br />
member-States instituted a system of declaration for non-residents. In fact, the non-residents are under<br />
obligation to declare all means of payment on leaving and entering the territory.<br />
461. On the other hand, by virtue of the free movement of monetary signs within the Union, residents<br />
are not obliged to make a declaration for the manual transportation within member-States of monetary<br />
signs issued by the BCEAO. In practice, the customs require a declaration when amount exceeds CFAF<br />
2,000,000. This is justified by the fact that means of payment are likened to goods.<br />
462. In accordance with the provisions of Chapter 4 of the said Regulation (Art. 22 to 27) relating to<br />
the issue of allocations in foreign currency and customs control of means of payment carried by travellers,<br />
residents travelling to non member-States of the Union are under obligation to make declaration when the<br />
amount carried per person exceeds the counter value of two million (2,000,000) CFA francs but in bank<br />
82
notes other than CFA notes. Sums in excess of this ceiling may be carried in the form of traveller’s<br />
cheques, certified cheques or other means of payments.<br />
463. The analysis of the two systems above shows that the system used in Benin is not in line with<br />
Special Recommendation IX.<br />
Communication of information on the origin and use of currency (C.IX-2)<br />
464. The Customs Code (Articles 49 to 54) confers on customs agents the right to inspect goods and<br />
officers the disclosure of documents and information. They have the right to search, ask for additional<br />
information, interrogate and investigate acts of customs offences.<br />
Stopping and restraining of currency or bearer negotiable instruments (C. IX-3)<br />
465. With regard to the provisions of Articles 28 sub-paragraph 2 and 36 of the same Act, the<br />
competent authorities may, in case of a false declaration, block or retain for a fixed period the bearer cash<br />
or instruments.<br />
466. CENTIF may, on the basis of serious and reliable information on a suspicious transaction stop the<br />
transaction, the subject of declaration for a period of 48 hours (Art. 28 sub-paragraph 2) before<br />
transmitting a report to the State Prosecutor (Art. 29 sub-paragraph 2). On its part, Article 118 of Act 97-<br />
025 of 18 July 1997 on control of drugs and precursors contains the same provisions.<br />
Retention of information on amounts of currency or instruments obtained through declarations or<br />
discovered (C. IX-4).<br />
467. The information obtained from declarations to the customs corridor are kept and manually<br />
centralized for statistics purposes.<br />
Communication of information to CENTIF (C. IX-5)<br />
468. There is no formal framework for transmission of information to CENTIF.<br />
469. According to the authorities met, observations of violations of the Customs Code may lead to the<br />
discovery of money laundering cases, which could get, in some cases, the customs Administration to<br />
contact CENTIF or even the territorially competent Prosecutor’s Office for adequate treatment of the said<br />
docket. Concerning CENTIF, the information could reach it through the channel of the institutional<br />
correspondent designated by ministerial order.<br />
470. For the moment, no suspicious declaration from the customs has been registered.<br />
Cooperation among Customs, Immigration and other competent authorities (C. IX-6)<br />
471. At the national level, there is no text that organizes the coordination of activities between the<br />
customs, immigration and other competent authorities in the context of cross-border declarations.<br />
However, according to the authorities interviewed, collaboration ties exist in practice between the<br />
customs, immigration and Gendarmerie services (see above developments).<br />
83
Extension of the international cooperation and mutual assistance framework (C. IX-7)<br />
472. Benin is a member of the International Criminal Police Organization (Interpol). In the vein, one<br />
can mention the provisions of Order 004/MISPAT/DGPN of 28 February 1991 on attribution,<br />
organization and functioning of the Judicial Police Directorate, which, in its Article 3 18, defines the<br />
relationship between the National Central Interpol Bureau and the International Criminal Police<br />
Organization (ICPO).<br />
473. A quadripartite agreement exists between Benin, Togo, Ghana and Nigeria in criminal matters.<br />
The National Gendarmerie is a member of the Organization of African Gendarmeries. Even if these<br />
frameworks promote mutual assistance between the different authorities, the fact still remains that antimoney<br />
laundering is not explicitly mentioned.<br />
Application of the essential criteria of Recommendation 17 to legal persons that make false<br />
declarations or communicate false information (C. IX-8)<br />
474. Legal persons that make false declarations or communicate false information incur penalties for<br />
committing a customs crime. The sanctions applicable depend on the classification of the offence (there<br />
are three classes of customs offences). They comprise the fine, confiscation and imprisonment of up to<br />
three years.<br />
Application of the basic criteria of Recommendation 17 to persons who physically transport across<br />
border, cash or bearer negotiable instruments related to money laundering or financing of<br />
terrorism (C. IX-9)<br />
475. In the absence of a criminalization text, Recommendation 17 cannot be applied to carriers of cash<br />
and negotiable instruments related to the financing of terrorism.<br />
Confiscation of property of persons transporting currency or negotiable instruments (C. IX-10)<br />
476. According to customs practice, a fine representing 20% of the amount is imposed on the convicted<br />
person depending on the procedure of the customs litigation used. The offence is considered as<br />
exclusively customs and there is no particular investigation of the existence of a link between the cash or<br />
bearer negotiable instruments transported and the financing of terrorism. In any case, in the absence of a<br />
legal text criminalizing terrorism financing, no procedure of provisional measures or of ad hoc<br />
confiscation can prosper.<br />
Freezing, seizure under the terms of UN Resolutions (C. IX-11)<br />
477. Benin sent Reports to the UN Security Council to present the status of implementation of<br />
Resolutions 1267 (1999) and 1373 (2001). The authorities indicated their commitment to the<br />
implementation of these resolutions. The lists approved by the Council concerning Resolution 1267<br />
(1999) have been received but are transmitted to banks and financial institutions, which have not yet had<br />
the opportunity to effect freezing and seizures.<br />
478. As for Resolution 1373 (2001), it has not yet been implemented.<br />
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Notification to the country of origin of the discovery of gold or precious metals (C. IX-12)<br />
479. The AML Act made no provision for notification to the country of origin of the discovery of gold<br />
and precious metals.<br />
480. Since Benin has not yet voted a law against the financing of terrorism, no provision exists for the<br />
moment in that regard. In the absence of bilateral agreement in the area, any discovery of transportation of<br />
gold, metals or precious stones is treated in accordance with the Customs Code of Benin.<br />
Protection of information on cross-border transactions (C. IX-132)<br />
481. The management of information is done manually. There is no computerized database.<br />
The information held by the customs and security services are centralized internally, their use is subject to<br />
prior authorizations from the supervisory authorities.<br />
Additional elements - Implementation of best international practices (C.IX-14 and 15)<br />
482. The country plans to examine the possibility of implementing the measures stated in accordance<br />
with the relevant international practices.<br />
2.7.2 Recommendations and Comments<br />
483. Benin, like the other WAEMU countries, has adopted two-pronged declaration system (residents<br />
and non-residents). Hence, residents are not subjected to the obligation of declaration when they transport<br />
within WAEMU member-States monetary signs issued by the BCEAO. This system is not in conformity<br />
with Special Recommendation IX. Besides, terrorism financing is not yet criminalized in the legal<br />
provision of Benin.<br />
484. The Beninese authorities are invited to:<br />
� Ensure that the declaration system put in place is in conformity with the required demands;<br />
� Institute a formal framework for collaboration between the Customs Services and CENTIF for<br />
communication of statistics on declarations relating to physical cross-border transportation of<br />
cash and negotiable instruments;<br />
� Organize, formally, the coordination of the activities between the customs, immigration and<br />
the other competent authorities;<br />
� Ensure the full implementation of Resolution 1267 (1999) and implementation of Resolution<br />
1373 (2001);<br />
� Proceed to the transposition as early as possible of Guideline 04/2007/CM/UEMOA;<br />
� Establish a computerized database for monitoring cross-border transportation of cash and<br />
negotiable instruments and a mechanism for automatic transmission of information to<br />
CENTIF.<br />
85
2.7.3 Compliance with Special Recommendation IX<br />
SR IX NC<br />
Rating Summary of Factors Underlying Rating<br />
Declaration system in place not in conformity with required demands;<br />
Lack of formal framework for collaboration between the Customs Services<br />
and CENTIF for communication of statistics on declarations relating to<br />
physical cross-border transportation of cash and negotiable instruments;<br />
Lack of a text organizing formally the coordination of activities between<br />
customs, immigration and the other competent authorities<br />
Non adoption of the Act on terrorism financing;<br />
Incomplete implementation of Resolution 1267 (1999) and lack of freezing<br />
or seizure under this Resolution;<br />
Lack of implementation of Resolution 1373 (200) on freezing or seizure<br />
3. PREVENTIVE MEASURES – FINANCIAL INSTITUTIONS<br />
(DUTY OF CUSTOMER DUE DILIGENCE AND KEEPING OF<br />
DOCUMENTS)<br />
3.1 RISK OF MONEY LAUNDERING OR FINANCING OF TERRORISM<br />
485. The mission noted some initial awareness of the AML Act in Benin on the part of some of the<br />
persons subject to it, thanks and Comptables in particular to the sensitization and training activities carried<br />
out by the National Financial Information Processing Unit, called CENTIF. Some actors of the system<br />
justify this situation by the recent nature of the establishment of the legal and institutional framework.<br />
486. According to information gathered by the mission, the geographical situation of Benin makes the<br />
country vulnerable to illicit trafficking of narcotic drugs (predicate offence to money laundering crime).<br />
Actions had already been taken by the Government of Benin in the early 2000 to curb this scourge. The<br />
national police body in charge of leading the fight against drug trafficking: Central Bureau for Repression<br />
of Illicit Trafficking of Drugs and Precursors (OCERTID) was created by decree in 1999 and its activities<br />
started in 2000. This body is charged, among others, with coordinating and leading operations aimed at<br />
repression of this trafficking. The OCERTID is supposed to collaborate with the Gendarmerie, the<br />
customs; the forestry and natural resources services. This collaboration is obviously not effective.<br />
487. Despite the existence of vulnerabilities to money laundering in Benin, the AML risk approach was<br />
not envisaged by the Beninese authorities.<br />
488. The authorities seem to have started preparing a draft of a national AML/FT strategy, but the<br />
mission had no elements to confirm its development.<br />
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489. The identification of the risks and vulnerabilities to ML/FT should be envisaged by Benin in order<br />
to define action plans for their reduction.<br />
3.2 OBLIGATION OF CUSTOMER DUE DILIGENCE, INCLUDING ENHANCED<br />
OR REDUCED IDENTIFICATION MEASURES (R.5 TO 8)<br />
3.2.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� -Act 2006-14 of 31/10/2006 on anti-money laundering;<br />
� - BCEAO Instruction 01 /2007/RB of 02/07/2007 relating to the fight against money laundering<br />
within agencies;<br />
� - BCEAO Instruction 01/2006/SP of 31 July 2006 relating to the issue of electronic money issued<br />
in enforcement of Regulation 15/2002/CM/UEMOA of 19 September 2002 relating to payment<br />
systems in WAEMU member-States;<br />
� -Regulation 14/2002/CM/UEMOA of 19/09/2002 relating to freezing of funds and other financial<br />
resources in the framework of combating terrorism financing in member-States of the West<br />
African Economic and Monetary Union (WAEMU);<br />
� -Guideline 04/2007/CM/UEMOA of 4 July 2007 relating to the combating terrorism financing in<br />
WAEMU member-States;<br />
� Regulation 00004/CIMA of 04/10/2008 relating to anti-money laundering and combating the<br />
financing of terrorism in member-States of CIMA.<br />
490. Act 2006-14 of 31/10/2006 on anti-money laundering, called the AML Act, transposing Guideline<br />
07-02/CM/UEMOA of 19 September 2002 relating to the fight against money laundering in WAEMU<br />
member-States, hereinafter called, AML Act, subjects to obligations of prevention and detection of money<br />
laundering (cf. Articles 1 and 5 of the Act) any natural or legal person who, in the framework of his<br />
profession, carries out, controls or offers advice on operations leading to deposits, exchanges, investment,<br />
conversions or all other capital flows or all other assets, namely, concerning financial institutions, Public<br />
Treasury, the BCEAO, financial entities (banks and financial institutions, Post Office financial services,<br />
Caisse des Dépôts et Consignations or assimilated agencies, insurance and reinsurance companies,<br />
insurance and re-insurance brokers, mutual or cooperative savings and lending institutions, BRVM,<br />
DC/BR, SGI, SGP, UCITS, EICF, authorized manual foreign exchange agencies).<br />
491. BCEAO Instruction 01/2007/RB of 02/07/2007 relating to the fight against money laundering<br />
within financial entities, hereinafter called BCEAO AML Instruction, specifies the modalities of<br />
enforcement of the Act. It applies to the financial entities listed in Article 3, as follows: banks and<br />
financial institutions, Post office financial services, Caisse des Dépôts et Consignations or assimilated<br />
agencies, mutual or cooperative savings and lending institutions, structures or organizations not<br />
constituted in the form of mutual or cooperative agencies and having as an objective the collection of<br />
savings and/or granting of credit, authorized manual exchange agencies.<br />
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492. It sets forth for financial entities general obligations of vigilance (in particular, Identification of<br />
customers, Detection of suspicious transactions) as well as specific enhanced vigilance obligations<br />
(Monitoring of typical transactions, Obligations relating to occasional financial transactions, Surveillance<br />
of electronic transactions, Enhanced vigilance with regard to uncooperative countries and territories as<br />
well as persons targeted by measures on freezing of funds (Articles 4 and 6 to 10).<br />
493. Regulation 14/2002/CM/UEMOA of 19/09/2002 relating to the freezing offends and other<br />
financial resources in the context of combating terrorism financing in member-States of the West African<br />
Economic and Monetary Union (WAEMU) establishes the principle of freezing of funds of persons and<br />
entities featuring on the list prepared by the UN Security Council under Resolution 1267 (1999).<br />
494. Guideline 04/2007/CM/UEMOA of 4 July 2007 relating to combating the financing of terrorism<br />
(not transposed as at the time of the mission and, therefore, having no binding force in Benin) orders the<br />
said States to put in place internal ad hoc mechanisms.<br />
495. Regulation 00004/CIMA of 04/10/2008, hereinafter called, the CIMA Regulation, constitutes a<br />
supra-national text, of direct application, defining the procedures applicable by insurance agencies in<br />
member-States of CIMA in the context of the fight against money laundering and financing of terrorism. It<br />
aims at specifying the modalities of enforcement of the regulatory provisions of anti-money laundering<br />
and combating terrorism in member-States of the Inter-African Conference Insurance Markets. It is based<br />
in particular on Guideline 07/2002/CM/UEMOA of 19 September 2002 relating to the fight against money<br />
laundering in member-States of the West African Economic and Monetary Union (WAEU) and on the<br />
Uniform Act of 20 March 2003 relating to the fight against money laundering in member-States of the<br />
West African Economic and Monetary Union (WAEMU).<br />
496. This Regulation is applicable to insurance and re-insurance companies as well as insurance and<br />
re-insurance brokers of member-States of CIMA (Art. 3). It subjects the concerned persons to obligations<br />
of vigilance (Title III, Art. 8 knowledge of the customer, Art. 9 monitoring of client activities, Art. 11<br />
surveillance and verification of means of payment, Art. 12 anonymous capitalization bonds). Although the<br />
Regulation, in principle, is of immediate enforcement, an enforcement time-table accompanies the text of<br />
the Regulation and sets deadlines for its gradual enforcement. Hence, the date of 1 st July 2009 was fixed<br />
for the effective enforcement of the Regulation in all the subsidiaries.<br />
Recommendation 5<br />
Prohibition of anonymous accounts (C.5.1)<br />
497. The legislative or regulatory provisions define the conditions of an account in financial<br />
institutions without, for that matter specifically banning them from keeping anonymous accounts, under<br />
fictitious names or numbered accounts. During the discussions, the evaluators were informed of the nonexistence<br />
of these types of accounts in the portfolios of banks.<br />
Framework for application of due diligence requirements (C.5.2)<br />
498. Article 7 of the AML Act stipulates that “financial entities should be sure about the identity and<br />
address of their customers before opening an account for them, pay particular attention to securities,<br />
stocks or bonds, assigning them a safe deposit box or establishing with them all other business relations”.<br />
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499. Article 8 of this Act stipulates, in paragraph 1, the identification of occasional customers “for any<br />
transaction involving a cash amount equal to or above CFAF 5,000,000 or the counter-value of which in<br />
CFAF is equivalent to or exceeds this amount” (about 7623 euros).<br />
500. Paragraph 2 of this article specifies that it is the same in case of repetition of distinct transactions<br />
for an individual amount below the amount provided for in the preceding paragraph or when the licit<br />
origin of the funds is not certain.<br />
501. Article 8 of the BCEAO AML Instruction also stipulates that financial entities “should, in<br />
accordance with Articles 7 and 8 of the Uniform Act, be sure of the identity of any occasional customer<br />
who demands to effect an operation of an amount equivalent to or higher than CFAF 5 million or the<br />
counter-value of which in CFAF is equal to or exceeds this amount”.<br />
502. Article 9 of this Instruction further specifies that financial entities that authorize the execution of<br />
transactions by Internet or by any other electronic means should have an adapted surveillance system for<br />
these transactions.<br />
503. The AML Act provides for cases of exemption from identification of the customer: when the latter<br />
is a financial entity subjected to this act, (Article 9).<br />
504. In the case of remote financial transactions, financial entities carry out the identification of natural<br />
persons, in accordance with the principles set forth in the annex to the AML Act.<br />
505. It should be pointed out that the mission could not have evidence of the formal adoption by the<br />
National Assembly of the annex to the AML Act, relating to remote financial relations.<br />
506. Only the Instruction provides for constant vigilance on the part of subjected agencies. It should<br />
be noted that in the sense of the FATF, the Instruction has no force of law and does not cover the<br />
other financial institutions which do not fall within its sphere of application.<br />
507. The WAEMU Guideline on combating the financing of terrorism, yet to be transposed into<br />
Benin’s domestic law, specifies the obligations of identification of occasional customers, which should be<br />
imposed on financial entities. It invites member-States (i) to extend to all transactions exceeding CFAF 5<br />
million, including non-cash transactions, and (ii) specifies that they should be applied to any exceeding the<br />
above-mentioned ceiling “whether it is done in one or several transactions between which there seems to<br />
be a link” (Art. 11-1). It also stipulates that member-States require that financial entities request for the<br />
identification of customers as soon as there is suspicion of FT (Art. 11-4).<br />
508. The CIMA Regulation, for its part, stipulates in its Article 8 that “Insurance agencies should,<br />
before establishing a contractual relationship or assisting their customer in the preparation or realization of<br />
a transaction, to make sure of the identity of their contracting party”.<br />
Due vigilance measures required<br />
Identification measures and sources of verification (C.5.3)<br />
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509. The AML Act provides for measures for identification of the natural person. In this case, the<br />
identity is verified through the presentation of a national identity card or any other official document<br />
serving as ID card, still valid and bearing a photograph, of which a copy is made. The verification of the<br />
professional and residential address is effected by the presentation of any document that can prove the<br />
facts. If it is a natural person trader, the latter is under obligation to provide, in addition, any document<br />
testifying to his registration on the RCCM. (Art.7).<br />
510. The identification of the legal person is also prescribed by the act, which stipulates in Art. 7<br />
paragraph 3: “the identity of a legal person or a branch is verified through the provision; on the one hand,<br />
of the original, duplicate or certified true copy of any deed or extract from the Trade and Personal<br />
Property Credit Register, attesting to its legal form and headquarters”.<br />
511. The CIMA Regulation recommends to insurance, re-insurance companies, and their brokers, in<br />
particular to note the identity of all the co-contracting parties, natural persons (surname, first name(s), date<br />
and place of birth, nationality) irrespective of the amounts paid, to request for each co-contracting parties,<br />
a convincing identity card, make a photocopy and carry out all necessary verifications (examine the<br />
document (recto verso for the identity card) in order to confirm its authenticity, compare the person with<br />
his photograph, compare the person with his description: sex, age, etc., compare the signature with the one<br />
featuring on the cheque or on any other contractual or pre-contractual document signed by the person.<br />
Verifications concerning legal persons or legal structures (C.5.4)<br />
512. Concerning persons acting on behalf of a legal person (officials, employees, legal representative),<br />
paragraph 4 of Art.7 of the Act states that fiscal entities must verify their identity and address in the same<br />
conditions as those set forth in paragraph 3 mentioned above. These persons must, in addition, produce<br />
documents attesting, on the one hand, to the delegation of power of mandate given to them, and on the<br />
other, the identity and address of the economic beneficiary.<br />
513. For legal structures (trust funds and assimilated structures in the sense of the FATF), the AML<br />
Act does not provide for specific obligations for financial entities (i) to verify that any person claiming to<br />
act on behalf of the customer is authorized to do so, or a fortiori to identify and verify the identity of this<br />
person, (ii) to verify the legal status of the legal structure.<br />
514. Articles 8.2 and 8.3 of the CIMA Regulation contain specific provisions for identification of legal<br />
persons. When their headquarters is based in a country within the CIMA space, the agencies should note<br />
the name of the executives (chairman, executive directors, main managers), demand, examine and make a<br />
copy, in particular, of an identity card of the executives, representatives of legal persons with their power,<br />
decisions that designated the legal representatives and defined the powers of the other legal<br />
representatives. In the case of foreign legal persons, it is important to note the names of the executives,<br />
executive directors, main managers), if it is a trust, verify that the trustee has powers to subscribe to an<br />
insurance contract, if it is a foundation, demand, examine and make copies of all documents necessary for<br />
identifying the trust, the trustee and the beneficiary of the trust.<br />
515. It should be underlined that the evaluators did not have elements to determine that the legislation<br />
makes no provision for the existence of Trusts in Benin, even if Art. 5 of the AML Act mentions “trust<br />
funds or similar structures” and that the CIMA Regulation targets the trust (cf. previous paragraph).<br />
Measures for identification and verification of beneficial owners (C.5.5)<br />
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516. Article 9 of the AML Act stipulates that: “if the customer is not acting on his own behalf the<br />
financial entity must verify all means the identity of the person on whose behalf he is acting” (Article 9,<br />
paragraph 1).<br />
517. There is no obligation for financial entities to verify the identity of the person on whose behalf<br />
their customer is acting, when the latter is a financial entity subjected to the AML Act.<br />
518. Thus, there is no obligation for financial institutions to take reasonable measures (i) to understand<br />
the ownership and control structure of the customer, (ii) to identify the natural person(s) who ultimately<br />
own or control the customer (including identification of persons who exercise as a last resort effective<br />
control over a legal person or a legal structure), (iii) to verify the identity of the beneficial owners with the<br />
help of pertinent information or data obtained from a reliable source, so that the financial institution would<br />
have satisfactory knowledge of the beneficial owner.<br />
519. The evaluators noted that the Act makes no provision for specific measures to be observed by<br />
financial entities to determine the beneficiary owner and understand the ownership and control structure of<br />
the customer and determine natural persons who ultimately own or control the customer.<br />
520. The measures applicable to trust funds, trusts and other legal arrangements are not provided or by<br />
the AML Act.<br />
521. Article 8-4 of the CIMA Regulation on the insurance sector stipulates that: « When a transaction<br />
appears to have been made on behalf of a third person, the insurance company must verify the true identity<br />
of this third party ». Furthermore, Article 14 of this Regulation institutes the case of “aggravated<br />
suspicion», to be traced back to the anti-money laundering official when « one of the identities (cocontracting<br />
party or beneficiary) is concealed by a legal person posing as a front (trust, trust fund,<br />
foundation, etc.)”.<br />
Information on the purpose and intended nature of the business relationship (C.5.6)<br />
522. Financial institutions are not obliged to obtain information on the purpose and intended nature of<br />
business relationship in the AML Act. However, under Article 13 of the said act financial entities are<br />
obliged to develop internal programmes for combating money laundering within their institutions. This<br />
programme, specifies Article 6 of Instruction 01/2007/RB, must at all times, allow the provision of<br />
specific information on the identity of the actual originator and the actual beneficiary in the contact of<br />
detection of suspicious transactions.<br />
Ongoing due diligence of the business relationship (C.5.7)<br />
523. Under the AML Act financial institutions are under no obligation (i) to exercise ongoing due<br />
diligence on their business relationships, (ii) to scrutinize transactions undertaken throughout the course of<br />
their relationships to ensure that the transactions being conducted are consistent with the institution’s<br />
knowledge of their customers and their business activities, risk profiles and, where necessary, the source<br />
of their funds, (iii) to ensure that documents, data and information collected under the customer due<br />
diligence process are kept up-to-date, by undertaking reviews of existing records, particularly for higherrisk<br />
categories of customers or business relationships.<br />
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524. Only some aspects related to the exercise of due diligence are indirectly dealt with, particularly<br />
the aspects associated with suspicious translation reporting provided for in Article 26 of the AML Act or<br />
the provisions related to a special examination as stipulated in Article 10. For these cases, some amount of<br />
vigilance is required.<br />
525. The BCEAO Instruction specifies that the “know your customer” procedures should be applied<br />
not only to new relationships but also to existing customers. It should be noted, however, that the<br />
instruction is only applicable to part of the subjected person and has no force of law.<br />
Enhanced due diligence measures for higher-risk categories (C.5.8)<br />
526. The AML Act does not specifically indicate that financial institutions should be obliged to take<br />
enhanced due diligence measures for high-risk categories (non-resident customers, legal structure,<br />
companies with capital represented by bearer shares, etc.). Article 7 of the BCEAO Instruction<br />
(Monitoring of unusual transactions), on the other hand, provides for situations in which specific enhanced<br />
due diligence should be adopted by agencies subjected to the instruction. A non exhaustive list of the type<br />
of transactions that deserve special attention features in Article 7. These obligations impose on financial<br />
entities to develop a mechanism for analyzing transactions and customer profile to enable them to track<br />
and closely monitor unusual financial movements and transactions (Article 7, paragraph 1) and define the<br />
types of customers that they cannot accept (Article 4, paragraph 3).<br />
527. Concerning occasional operations and electronic transactions, the BCEAO Instruction provides in<br />
some cases enhanced due diligence measures for certain operations. This article stipulates that electronic<br />
money issuers and distributors should institute an automatic system for monitoring unusual transactions<br />
using electronic money as support.<br />
The implementation of these measures could not be verified by the mission, which was, moreover,<br />
informed about the non-existence of an electronic money company.<br />
Reduced or simplified measures C.5.9)<br />
528. The AML Act (Article 9 paragraph 4) exempts subjected financial entities from observing<br />
enhanced due diligence measures when the customer is a financial entity subjected to the AML Act. In<br />
other words, a financial entity is not required to obtain information of the identity of natural and legal<br />
persons and legal structures on behalf of which another financial entity not subjected to the AML act is<br />
acting.<br />
This total exemption from obligation of identification does not seem consistent with the requirements of<br />
the FATF which requires the observation of a minimum of due diligence.<br />
529. Considering that the AML Act originates from a WAEMU community Guideline, it may be<br />
deduced that the scope of application of Article 9 extends to all financial entities established in member-<br />
States of the Union. The provisions of the annex to the act provide that the measures for identification of<br />
natural persons are not required for remote operations when the counterpart is situated in the Union. This<br />
interpretation seems to be the one retained by the competent authorities.<br />
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530. Article 3 of the annex to the AML Act, however, stipulates that these simplified provisions cannot<br />
be applied if a financial entity has doubts over the transaction and thinks that direct contact is voluntarily<br />
avoided with the objective of concealing the identity of the actual customer.<br />
Limitation of the simplified customer due diligence of countries complying with the FATF<br />
Recommendations (C.5.10)<br />
531. The annex to the AML Act related to remote financial relationships prescribes that when the<br />
counterpart is established outside the Union, the financial entity should verify its identity by consulting a<br />
reliable financial directory (see Recommendation 8.2 below). The financial entity is also obliged to take<br />
“reasonable measures” to obtain information on the customer of its counterpart, namely the effective<br />
beneficiary of the transaction, in accordance with Article 9 of the AML Act. These “reasonable measures”<br />
may be limited - when the country of the counterpart applies equivalent identification obligations, ask for<br />
the name and address of the customer, but may be applied, when these obligations are not equivalent,<br />
request from the counterpart a certificate confirming that the identity of the customer has been duly<br />
verified and registered.<br />
Case of ML/FT suspicion or higher risk (C.5.11)<br />
532. In the cases concerned by this criterion, the acceptance of simplified measures of due client<br />
diligence is not acknowledged.<br />
However, since the AML Act establishes an exempting from verification, when the client is a financial<br />
institution subject to the act, compliance with this criterion cannot be assured.<br />
Compliance with Instructions of the competent authorities (C.5.12)<br />
533. The AML Act does not specifically authorize financial entities to determine the scope of the due<br />
diligence measures to be applied according to the risks presented. They must, in any case, comply with the<br />
provisions of Article 7 of the said act and Article 4 of the BCEAO Instruction related the identification<br />
measures (general due diligence obligation).<br />
Timing of verification – General Rule (C.5.13)<br />
534. Article 7 of the AML Act stipulates that financial entities must determine the identity and address<br />
of their customers before opening an account for them, paying due attention, particularly to securities,<br />
stocks or bonds, assigning them a safe deposit box or establishing with them any other business<br />
relationship. Article 4 of the BCEAO Instruction stipulates that financial institutions, before establishing a<br />
contractual relationship or assisting them in the preparation or realization of transaction, must verify the<br />
identity of the co-contracting party.<br />
535. Concerning occasional customers, the identification is done under conditions provided by the<br />
relevant provisions of Article 7 of this Act and Article 8 of the BCEAO Instruction.<br />
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536. The CIMA Regulation provides that “Insurance agencies must, before establishing a contractual<br />
relationship or assisting their customer in the preparation or realization of a transaction, verify the identity<br />
of their contracting party” (Art.8).<br />
Timing of verification – Special Circumstances (C.5.14)<br />
537. When verification of the identity of the customer and the beneficiary owner is required, there is no<br />
provision authorizing financial institutions to complete the identification after establishing the business<br />
relationship.<br />
538. The evaluators were informed by the financial institutions that, in practice, business relationships<br />
are only established when all identification measures have been taken.<br />
539. Concerning insurance companies, the mission was informed during the discussions with one<br />
insurance company met that the insurance premium is mandatorily paid in the presence of the beneficiary<br />
owner.<br />
Failure to comply with due diligence obligations before initiation of the relationship (C.5.15)<br />
540. Article 4 paragraph 3 of the BCEAO Instruction stipulates that “to efficiently prevent itself<br />
against reputation and counterpart risks, financial entities, targeted by this Instruction, must define the<br />
types of customers that they cannot accept, in view, in particular, the prescriptions of the above<br />
paragraphs, and refrain from entering into any relationship, prior to having satisfactorily determined their<br />
identity, their address and type of operations authorized with the said customers”. It is not explicitly<br />
indicated that if the FI has not complied with the due diligence measures, it should particularly not open<br />
the account or establish business relationship.<br />
541. Article 9 of the AML Act stipulated in paragraph 2 “that when doubt persists, following<br />
verification of the identity of the economic beneficiary, the financial entity must make a suspicious<br />
transaction report in accordance with Article 26 to CENTIF, under the conditions set forth in Art. 27”. The<br />
texts do not clarify that the FI must envisage an STR if it cannot fulfil the due diligence obligations.<br />
542. The CIMA Regulation provides the following clarifications on this point: “If the information<br />
obtained does not permit him to be certain about the identity of the persons for whose profit the operation<br />
is carried out, the insurance company must make a suspicious transaction report to the Financial<br />
Intelligence Unit, irrespective of its own option of refusing the operation” (Art.8.4).<br />
Failure to comply with due diligence obligations, following initiation of the relationship (C.5.16)<br />
543. When a financial institution has already established a business relationship and that it cannot meet<br />
all the identification measures required, there is no mechanism to compel it to end the business<br />
relationship and consider making a suspicious transaction report.<br />
Existing customers – Due diligence (C.5.17)<br />
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544. The AML Act provides no vigilance obligation for existing customers depending on the<br />
importance of the risks they represent or implement vigilance measures for relationships with them at the<br />
opportune time.<br />
545. Article 4, paragraph 4 of the BCEAO Instruction, related to anti-money laundering within<br />
financial entities stipulates that the « know your customer » procedures must be applied, not only to new<br />
relationships, but also to existing customers, particularly those on which hang doubts as to the reliability<br />
of the information gathered previously. However, no specification is given at the opportune time to<br />
implement the due diligence measures nor defines the notion of “know your customer” procedures. The<br />
conditions in which the procedures must be applied to existing customers are not clearly defined.<br />
546. Point 13 of Circular 01-2001/CB of 03 April 2001 of the Banking Commission on<br />
Recommendations for improving business management in banks and financial institutions of WAMU<br />
requires on the part of each institution a code of ethics on customer relationships and necessary due<br />
diligence in the detection of illicit and fraudulent operations.<br />
It is necessary to also note that neither the BCEAO Instruction nor Circular of the Banking Commission<br />
have force of “law or regulation” in the sense of the FATF.<br />
Existing customers –Anonymous accounts (C.5.18)<br />
547. Financial institutions should be under no obligation to apply due diligence measures to their<br />
existing customers if they are customers to which Criterion 5.1 is applicable (Existing customers –<br />
anonymous accounts).<br />
548. The AML Act contains no provision requiring financial institutions to apply due diligence<br />
measures to their existing customers if they hold anonymous accounts, under fictitious names or numbered<br />
accounts.<br />
549. However, Article 4, paragraph 4 of the BCEAO Instruction, related to anti-money laundering<br />
within financial entities stipulates that the “know your customer” procedures should be applicable not only<br />
to new relationships, particularly those on which hangs doubts as regards the reliability of the information<br />
previously collected.<br />
550. However, it should be pointed out that Act 90-018 of 27 July 2007 on bank regulation in the<br />
Republic of Benin, does not provide for keeping accounts under fictitious names or anonymous accounts.<br />
Recommendation 6:<br />
Obligation to identify Politically Exposed Persons (PEPs) (C.6.1)<br />
551. There is no legal provision in Benin requiring financial institutions to identify PEPs.<br />
552. Financial institutions are, therefore, under no obligation to have a risk-management system in<br />
order to determine whether a customer, a potential customer or the beneficiary owner is a Politically<br />
Exposed Person.<br />
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553. Article 15 of the draft uniform CFT Act stipulates that “each member-State must adopt measures<br />
requiring financial entities to apply, based on their assessment of the risk, enhance due diligence on<br />
transactions or business relationships with PEPs residing in another member-State or in a third-party State,<br />
particularly for purposes of preventing or detecting transactions linked to the financing of terrorism. To<br />
this end, it shall take appropriate steps to determine the origin of the wealth or funds”. The bill contains no<br />
provision creating a direct obligation for financial institutions to put in place appropriate risk management<br />
systems to determine whether a potential customer or beneficiary owner is a PEP.<br />
554. The mission was informed about the establishment by certain banks of a system of classifying<br />
customers by category. This system helps to identify politically exposed persons. However, for most<br />
banks, these persons are not necessarily perceived as high-risk customers for money laundering.<br />
555. Article 14 of the CIMA Regulation applicable insurance agencies in member-States of CIMA,<br />
recommends to persons in contact with customers, file managers and internal control officials to adopt<br />
measures aimed at detecting doubtful or suspicious operations and high-risk customers.<br />
Authorization of business relationships with PEPs by Senior Management (C.6.2)<br />
556. Financial institutions are under no obligation to obtain Senior Management approval before<br />
entering into a business relationship with a PEP, or continue the business relationship when a customer<br />
has been accepted and the customer or beneficiary owner is subsequently found to be, or subsequently<br />
becomes a PEP.<br />
557. However, the mission was informed that, in practice, in some banks, the internal officials in<br />
charge of implementation of anti-money laundering programmes solicit the authorization of their Senior<br />
Management before establishing a business relationship with a PEP. Even if the account is opened first, no<br />
movement is authorized before the approval of the Senior Management.<br />
Identification of the source of wealth and source of funds of PEPs (C.6.3)<br />
558. Financial institutions are under no obligation to take all reasonable measures to identify the source<br />
of wealth and source of funds of customers and beneficial owners identified as PEPs.<br />
Enhanced ongoing monitoring of the relationship with a PEP-(C.6.4)<br />
559. Financial institutions are under no obligation to undertake enhanced and constant monitoring of<br />
the business relationships they have entered into with a PEP.<br />
Additional element<br />
Application of R.6 to domestic PEPs (C.6.5)<br />
560. Under the legislation in force, financial institutions are under no obligation to identify domestic<br />
PEPs.<br />
Transposition of the Merida Convention (C.6.6)<br />
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561. The mission was informed about the signing and ratification of the 2003 United Nations<br />
Convention on Combating Corruption by Benin. However, no information concerning its transposition<br />
into the domestic law was communicated to the evaluators. The same is true of the African Union<br />
Convention on Combating Corruption, which Benin had ratified.<br />
Recommendation 7<br />
Sufficient information on cross-border bank correspondents (C.7.1)<br />
562. The AML Act provides no obligation for financial institutions to gather sufficient information on<br />
the respondent institution to understand fully the nature of its business and to determine from publicly<br />
available information, the reputation of the institution and the quality of supervision, including whether it<br />
has been the subject of a money laundering or terrorism financing investigation or regulatory action.<br />
563. No clause of the AML provides for the following measures related to bank correspondents:<br />
� That FIs must gather sufficient information on bank correspondents.<br />
� That FIs must evaluate the controls put in place by bank correspondents on the mechanism for<br />
combating money and the financing of terrorism.<br />
� That FIs must obtain authorization from Senior Management before entering into business<br />
relationships with bank correspondents on the mechanism for combating money and the<br />
financing of terrorism.<br />
� That FIs must specify the respective responsibilities on the AML/FT of each correspondent.<br />
� That FIs must ensure that bank correspondents have applied all usual due diligence measures<br />
to these customers.<br />
� That FIs must ensure that bank correspondents can provide relevant identification data on<br />
these customers at the request of the FI.<br />
564. The annex to the AML Uniform Act on anti-money laundering in WAEMU member-States deals<br />
with the modalities of identification of customers (natural persons) by financial entities in the case of<br />
remote financial transactions. The identification of the correspondent bank is not an obligation clearly<br />
defined by this annex. The Beninese authorities could not prove to the evaluators that the annex was<br />
adopted at the same time as the AML Act.<br />
565. According to the officials of the banks met, the legal constraints weighing, at the national level, on<br />
their correspondent banks usually established in developed countries necessarily impose on them to<br />
observe, in practice, minimal due diligence measures.<br />
Assessment of controls put in place by correspondents (C.7.2)<br />
566. The diligences required when the customer is a financial entity do not cover control systems put in<br />
place by the financial entity customer for anti-money laundering and the financing of terrorism,<br />
irrespective of the country in which the financial entity customer is established.<br />
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567. Financial entities are under no obligation to verify the relevance or effectiveness of the assessment<br />
of the control measures put in place.<br />
Approval from Senior Management before entering into a bank correspondent relationship /<br />
respective responsibilities of each institution (C.7.3 and 7.4))<br />
568. Financial institutions are under no obligation to obtain Senior Management approval before<br />
entering into new bank correspondent relationships and specify in writing the respective responsibilities in<br />
the fight against money laundering and the financing of terrorism of each counterpart.<br />
569. The evaluators were informed about the practical modalities followed by the banks with regard to<br />
correspondent banking. They also have trace of the form to be completed by the Beninese bank before<br />
entering into a correspondent relationship. The reverse is not applied to foreign banks.<br />
Rules pertaining to “payable-through accounts” (C.7. 5)<br />
570. When a correspondent relationship involves the maintenance « payable through accounts »,<br />
financial institutions are under no obligation to determine whether (i) their customer (the respondent<br />
financial institution) has performed all the normal due diligence obligations set out in Recommendation 5<br />
on those of its customers that have direct access to the accounts of the financial institution, and (ii) the<br />
other respondent financial institution is able to provide relevant customer identification data upon request<br />
of the correspondent financial institution.<br />
Recommendation 8<br />
Prevention of the misuse of new technologies (C.8.1)<br />
571. The AML Act contains no specific provisions relating to the abusive use of new technologies,<br />
which constitutes a weakness of the provision. Article 7 of Instruction /2006/SP of 31 July 2006 on the<br />
issue of electronic money and electronic money institutions stipulates: “issuing institutions or electronic<br />
money distributing institutions must put in place an automatic system for monitoring unusual transactions<br />
using electronic money as support”.<br />
572. However, Article 9 of the BCEAO Instruction, related to anti-money laundering within financial<br />
entities stipulates that “financial entities that authorize the execution of transactions by Internet or by any<br />
electronic means must have an adapted system for monitoring these transactions. They are also under<br />
obligation to centralize and analyze unusual transactions by internet or by any other electronic medium”.<br />
It is important to underline that given the fact that the BCEAO Instruction is applicable only to financial<br />
entities, financial institutions not covered by the said instruction are under no obligation to have policies in<br />
place or take such measures as may be needed to prevent the misuse of technological development in<br />
money laundering and financing of terrorism schemes.<br />
Management of risks linked to the physical absence of the parties (C.8.2)<br />
573. The concerns over the management of risks linked to the physical absence of the parties are taken<br />
into account in the last paragraph of Article 7 of the AML Act, which stipulates that in case of non face-<br />
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to-face financial transactions, financial entities must identify natural persons, in accordance with the<br />
principles set forth in the annex to this act. (cf. point 5 of the annex).<br />
574. This annex which, according to its title concerns only natural persons, specifies that the<br />
identification procedures must ensure appropriate identification of the customer, that they may be applied<br />
provided that there is no reasonable cause to believe that direct (i.e. face-to-face) contact is being avoided<br />
in order to conceal the true identity of the customer and that no money laundering is suspected and finally<br />
that they must not be applied to transactions involving the use of cash; the said annex also specifies the<br />
rule the financial institution must observe, according to the following two cases;<br />
1. The counterpart of the financial entity performing the operation is a customer;<br />
2. The counterpart of the contracting financial entity is another institution acting on behalf of a<br />
customer<br />
575. In the first case, the customer is directly identified by the branch or representation office of the<br />
contracting financial entity that is closest to the customer.<br />
576. In the second case, the identification obligation is waived if the financial entity is located in the<br />
WAEMU zone (cf. Article 9 of the AML Act). If it is situated outside the WAEMU, the financial entity<br />
must verify its identity by consulting a reliable financial directory, and in case of doubt, request<br />
confirmation of its identity from the competent oversight authority of the third-party country. The<br />
financial entity must also take “reasonable measures” to verify the identity of the customer of its<br />
counterpart, namely the beneficiary owner of the transaction.<br />
577. For the insurance sector, the CIMA Regulation demands, in its Article 8.5 on distance sale (by<br />
correspondence, telephone, internet), that the following measures be taken, particularly: request for a copy<br />
of an identity card and a bill dating less than 3 month testifying to a residence; R.I.B. (statement of<br />
account information) to verify the correspondence between the cheque and the R.I.B., transmission of the<br />
contract by registered mail with acknowledgement of receipt, while verifying the consistency of the<br />
address, etc..<br />
Analysis of Effectiveness (Recommendations 5 to 8)<br />
578. The mission met with the Professional Association of Banks and Financial Establishments of<br />
Benin (APBEF-B), two (2) banks and one (1) financial institution, one insurance company, one (1) money<br />
transfer company, one (1) microfinance institution, one (1) management and intermediation company and<br />
the national branch of the BRVM.<br />
579. The officials of the APBEF-B indicated that the initiation of the activities of CENTIF has<br />
facilitated the sensitization and training activities in the profession. In this regard, the Association<br />
participated in a seminar for explaining the Mutual Evaluation Questionnaire sent by <strong>GIABA</strong> to the<br />
Authorities prior to the arrival of the mission. The expression “Compliance Officers” is gradually gaining<br />
ground in the profession. Concerning identity checks, the mission was informed about the existence of real<br />
difficulties associated with the lack of reliability of the identity cards, associated with the dysfunctions of<br />
the public registry service. One of the consequences is the tendency to extend the use of false identity<br />
cards. However, ongoing activities, under the aegis of the BCEAO, for the establishment of an<br />
Outstanding Payments Centre offer financial institutions the opportunity to update their client-indices. The<br />
mission also deplored the lack of feedback and apparent absence of criminal penalties against perpetrators<br />
of money laundering attempts previously handed over to the Police (Economic and Financial Brigade) and<br />
the BCEAO.<br />
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580. The evaluators noted that, generally, the banking sector is better impregnated with the AML<br />
measures. In most banks, customer identification due diligence depends mainly on agents in charge of<br />
opening accounts, and should follow written procedures. Some banks extend the vigilance to the review at<br />
higher levels. In these banks, it is necessary to have approval from a higher authority before opening a<br />
new account. For legal persons, most banks verify the legal status or the legal structure and the managers,<br />
as well as the provisions governing the authority to engage the legal person. Most of the banks carry out<br />
correct identification of their customers, natural and legal persons, because they have developed internal<br />
identification rules, which seem to be applied in practice. Concerning the permanent due diligence<br />
obligation, even if the BCEAO Instruction does not impose specific obligations on the subject, in practice,<br />
banks undertake periodic review of their client portfolio in order to update the information on natural or<br />
legal person customers.<br />
581. Microfinance institutions have not taken significant measures to ensure application of the act and<br />
instruction related to AML. However, the risk of money laundering in this sector seems low because of the<br />
modest amounts recorded in individual savings accounts.<br />
582. Although endowed with a more complete Regulation, national actors in the insurance sector do<br />
not seem to be aware and much less have a clear conscience about their AML/FT obligations.<br />
583. The instruction requests subjected establishments to establish an anti-money unit and transmit to<br />
the BCEAO and the BC-WAMU an annual report on implementation of the entire AML mechanism. The<br />
working session with the national Agency of the BCEAO, completed by the analysis of a few reports<br />
helped to observe a transmission of an annual report by virtually all Lending Institutions.<br />
3.2.2 Recommendations and Comments<br />
584. Benin adopted the Anti-Money Laundering Act in October 2006, established the FIU by decree<br />
issued in December 2006 and appointed its members by decree issued in May 2008.<br />
585. The act was completed for certain financial professions by BCEAO Instruction 01/2007/RB of 02<br />
July 2007, on the fight against money laundering in financial entities.<br />
586. The CIMA Regulation on the insurance sector brings useful additions to the due diligence<br />
requirements, even if its enforcement is not yet effective.<br />
587. Generally, the legal framework defining the obligations of financial institutions contains<br />
weaknesses regarding in particular the identification and due vigilance obligations, which are at times too<br />
restrictive (difficulty in identifying the beneficiary owner).<br />
588. The onsite visit showed that apart from banks, the other subjected financial professions, ignorant<br />
of the act, do not apply the anti-money laundering provisions. The effectiveness of the implementation,<br />
too recent, could not be verified by the evaluators.<br />
589. Persons subject to the act have not integrated the risk approach into their scheme; hence, the lack<br />
of categorization of the customers, for example, by financial institutions that have not developed a specific<br />
due vigilance policy for politically exposed persons.<br />
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590. It did not seem obvious to the mission that internal AML/FT measures had been taken at the level<br />
of the National Agency of the BCEAO, the regulatory and oversight authority in the financial sector.<br />
591. Concerning the oversight authorities, the banking and insurance sectors are those most covered by<br />
texts (often of community origin). However, in reality, the absence of guidelines for persons subject to the<br />
act on the anti-money laundering and financing of terrorism component, the weakness or even lack of<br />
supervision of specific relevant aspects constitute obstacles to effective implementation of the<br />
requirements and explain the lack of compliance of the entire control scheme.<br />
Recommendation<br />
592. Given the weaknesses identified, the mission recommends to the competent authorities to take<br />
necessary steps for imposing:<br />
Concerning Recommendation 5<br />
� Review of the AML Act to include the client due diligence obligations, which should naturally<br />
feature in it, as prescribed by GAFI;<br />
� The formal and explicit ban of financial institutions to keep anonymous and numbered accounts or<br />
under fictitious names;<br />
� Clear obligations for identification of the beneficiary owner;<br />
� The obligation to get, in all cases, information on the purpose and nature of the business<br />
relationship;<br />
� The constant due diligence obligation, with verification of the constant update of documents and<br />
information on clients;<br />
� The maintenance of a minimum identification measures, even with regard to customers of<br />
financial entities subjected to the AML Act;<br />
� The obligation to take enhanced due diligence measures for higher risk categories or reduction of<br />
these measures in case of lower risks;<br />
� The obligation of due diligence on existing customers for all subjected financial entities;<br />
� The establishment by the BCEAO, in particular, internal AML/FT provisions and mechanisms;<br />
� The formal adoption of the annex to the AML Act (to be amended to include legal persons) for<br />
rendering opposable to persons subject to the act specific obligations on identification in the<br />
framework of remote operations.<br />
Concerning Recommendation 6<br />
� Put in place adequate risk management systems to ensure efficient detection and monitoring of<br />
politically exposed persons;<br />
� Submit for prior approval the entry into a business relationship with these high-risk persons and<br />
obtain information on the source of their funds.<br />
Concerning Recommendation 7<br />
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� Collect adequate information on the respondent institution (based on publicly available<br />
information) to attest the AML measures observed, prior to entering into any relationship with it;<br />
� Obtain approval from Senior Management before entering into new correspondent banking<br />
relationships.<br />
� Assess the control measures put in place by the respondent institution in the area of anti-money<br />
laundering and financing of terrorism and ensure their relevance and effectiveness.<br />
� Define in writing the respective responsibilities in the AML/FT scheme of each institution.<br />
� Comply with the prescribed due diligence measures in case of use of “payable through accounts”.<br />
Concerning Recommendation 8<br />
593. The adoption of policies and effective implementation of necessary measures, on the one hand, for<br />
preventing misuse of new technologies and, on the other, for controlling specific risks associated with<br />
business relationships or transactions that involve the physical presence of the parties, in the framework of<br />
the fight against money laundering or financing of terrorism.<br />
3.2.3 Compliance with Recommendations 5 - 8<br />
R 5 NC<br />
Rating Summary of Factors Underlying Rating<br />
- Partial coverage of financial institutions by the anti-money laundering<br />
obligations<br />
- No formal and explicit ban on financial institutions to keep anonymous and<br />
numbered accounts or under fictitious names;<br />
- No clear obligations for identification of the beneficiary owner;<br />
- No obligation to collect in all cases information on the intended purpose<br />
and nature of the business relationship;<br />
- No constant due diligence obligation with the verification of the constant<br />
update of documents and information on customers<br />
- No obligation to keep minimum identification measures, even for<br />
customers of financial entities subjected to the AML Act;<br />
- No obligation to adopt enhanced due diligence measures for the high-risk<br />
categories or reduction of these measures as a result of reduced risks;<br />
- No due vigilance obligation in the case of existing customers;<br />
- No opposition to targeted persons subject to the act, for lack of formal<br />
adoption of the annex to the AML Act, specific obligations featuring in it<br />
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pertaining to identification in framework of distance operations;<br />
- Weak or even lack of knowledge of the AML Act on the part of financial<br />
entities other than banks.<br />
R 6 NC No legal or regulatory obligations related to PEPs<br />
R 7 NC No legal or regulatory obligations related to relationships with corresponding banks<br />
R 8 PC No specific provisions on the misuse of new technologies in the AML Act<br />
Doubts on formal adoption of the annex to the AML Act on customer identification<br />
modalities in case of remote financial transactions<br />
Lack of adoption of policies and effective implementation of measures require, on<br />
the one hand, for preventing misuse of new technologies and, on the other, for<br />
controlling specific risks associated with business relationships or transactions that<br />
do not involve the physical presence of the parties, in the framework of AML/FT<br />
3.3 RELIANCE ON THIRD PARTIES AND OTHER INTERMEDIARIES (- R.9)<br />
3.3.1 DESCRIPTION AND ANALYSIS<br />
Legal framework<br />
� Framework Law 90-018 of 27 July 1990 on bank regulation in the Republic of Benin;<br />
� Act 2006-14 of 31/10/2006 on anti-money laundering in Benin;<br />
� Instruction 01/2007/RB of BCEAO of 2 July 2007 concerning AML within financial entities;<br />
� Guideline 04/2007 on combating the financing of terrorism (non transposed as at the time of the<br />
mission);<br />
� Regulation 00004/CIMA of 04/10/2008 concerning anti-money laundering and combating the<br />
financing of terrorism in member-States of CIMA.<br />
Obligation for FIs to immediately obtain from the intermediaries the necessary information<br />
concerning elements of client due diligence measures -C5.3 (C.9.1).<br />
594. According to Article 5 of the Act, intermediaries (business finders) of financial entities (third<br />
parties) are subjected in the same way as FIs to the provisions of the AML Act, as they are subjected to<br />
these provisions. They are, therefore, under obligation to comply with the due vigilance measures.<br />
595. Under the terms of its Article 17, the CIMA Regulation stipulates that “insurance and re-insurance<br />
brokers are financial entities. In that regard, they should meet all the obligations imposed on financial<br />
entities in the fight against money laundering”. The fact that an insurance or capitalization business<br />
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complies or not with the AML obligations does not necessarily exonerate the broker, and inversely.<br />
Moreover, Article 6.2 of the same Regulation obliges the insurance company to request from the broker a<br />
written document, by which it declares having familiarized itself with the regulation on anti-money<br />
laundering and financing of terrorism procedures and obligations.<br />
596. It seems that these texts, nor any other, do not impose on FIs, the obligation to obtain immediately<br />
from intermediaries the necessary information concerning the elements of client due diligence measures.<br />
FIs are under obligation to adopt adequate measures to make sure of the capacity of the third party<br />
to provide within the shortest possible time, copies of the identification data and other documents<br />
associated with the due diligence duty (C.9.2).<br />
FIs are under obligation to ensure that the third party is subjected to a regulation and a surveillance<br />
(R23, 24 and 29) and that it has taken all due diligence measures required by R5 and R10 (C.9.3).<br />
597. The law does not provide that FIs should make sure that the intermediary or third party is<br />
subjected to surveillance with regard to anti-money laundering and financing of terrorism.<br />
The competent Authorities are under obligation to take into account the respect by the country of<br />
establishment of the third party, the Recommendations of GAFI prior to any decision on the said<br />
country of establishment (C.9.4).<br />
598. There is no legal or regulatory provision imposing on the competent Authorities to take into<br />
account the respect by the country of establishment of the third party, the Recommendations of GAFI,<br />
prior to any decision on the choice of the said country of establishment.<br />
In fine responsibility of FIs using third parties for identification purposes (C.9.5).<br />
599. It seems, in practice, that the due diligence obligation is the main responsibility of the financial<br />
institution even if the texts do not explicitly mention that. Indeed, according to Article 7 of the Act, the FI<br />
should, in any case, implement the due diligence obligations (identification measures) on all these<br />
customers, whether they are brought by third parties or not.<br />
600. However, it is not specified that, eventually, responsibility for the identification and verification<br />
of identity should rest on the FI using a third party.<br />
3.3.2 Recommendations and comments<br />
601. The financial institutions met in banking, life insurance and financial market sectors indicated<br />
using third parties to partly ensure their due diligence obligations in the area of AML, without for that<br />
matter exempting them from their own obligations.<br />
602. According to one intermediary met, the SGI (which is itself an intermediary) with which it is in<br />
relationship did not specifically delegate to it any due diligence obligation towards clients whose identity<br />
it could verify itself (to him, this approach is more a matter of common sense than an obligation).<br />
603. In the light of the above observations, the mission makes the following recommendations:<br />
� The legal texts relating to AML should clearly define the conditions under which the use of third<br />
parties and intermediaries in the area of AML/FT is authorized.<br />
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� Financial institutions relying on a third party should be required to immediately obtain from the<br />
third party the necessary information concerning certain elements of the customer due diligence<br />
process (criteria 5.3 through 5.6).<br />
� Financial institutions should be required to take adequate steps to satisfy themselves that copies of<br />
identification data and other relevant documentation relating to the customer due diligence<br />
obligation can be made available by the third party upon request and without delay.<br />
� Financial institutions should be required to satisfy themselves that the third party is regulated and<br />
supervised (in accordance with Recommendations 23, 24 and 29), and that it has measures in<br />
place to comply with the customer due diligence requirements set out in Recommendations 5 and<br />
10.<br />
� In determining which countries the third party that meets the conditions can be based, competent<br />
authorities should take into account information available on whether those countries adequately<br />
apply the FATF Recommendations.<br />
� The ultimate responsibility for customer identification and verification should remain with the<br />
financial institution relying on the third party.<br />
3.3.3 Compliance with Recommendation 9<br />
Rating Summary of Factors Underlying Rating<br />
R.9 NC Absence in the texts of the criteria required in the area of diligence, regulation,<br />
surveillance and verification of the respect of GAFI norms by the country of<br />
establishment of the intermediaries and third parties.<br />
Lack of specification on the ultimate responsibility of FIs in the identification of<br />
clients when they delegate this obligation to intermediaries and third parties.<br />
3.4 PROFESSIONAL SECRECY OR CONFIDENTIALITY OF FINANCIAL<br />
INSTITUTIONS (R.4)<br />
3.4.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� -Framework Law 90-018 of 27 July 1990 on bank regulation in the Republic of Benin;<br />
� -Act 97-027 of 08 August 1997 on regulation of IMCEC;<br />
� -Act 2006-14 of 31/10/2006 on anti-money laundering;<br />
� -BCEAO Instruction 01 /2007/RB of 02/07/2007 on anti-money laundering within financial<br />
entities;<br />
� -Guideline 04/2007/CM/UEMOA of 4 July 2007 on combating the financing of terrorism in<br />
WAEMU member-States.<br />
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Lack of obstacles to implementation of the FATF Recommendations regarding the professional<br />
secrecy applicable to financial institutions (C.4.1)<br />
604. Article 42, last paragraph of the Bank Regulation Act stipulates that professional secrecy is not<br />
opposable either to the Banking Commission, or the Central Bank, or the judicial authority acting in the<br />
framework of a criminal procedure.<br />
605. Concerning microfinance institutions, the lifting of the professional secrecy is set out in Article 68<br />
of Act 97-027 of 08 August 1997, which stipulates that “professional secrecy is not opposable either to the<br />
Minister, or to the Central Bank, or to the Banking Commission, in the exercise of their mission of<br />
surveillance of the financial system. In any case, professional secrecy is not opposable to the judicial<br />
authority.<br />
606. Article 34 of the AML Act stipulates that “notwithstanding any contrary legal or regulatory<br />
provisions, professional secrecy may not be invoked by the persons referred to in Article 5 (persons<br />
subject to the law) for the purpose of refusing to provide information to the oversight authorities and to<br />
CENTIF, or refusing to make the reports required by this act. The same is true of information required in<br />
the context of an investigation pertaining to money laundering actions, ordered by an examining judge or<br />
carried out under that judge’s authority, by government agents charged with detecting and preventing<br />
offences linked to money laundering”.<br />
607. Article 13 of the Constitution of the Regional Insurance Control Commission stipulates that<br />
“professional secrecy or confidentiality of commercial documents is not opposable the Commission, or an<br />
Insurance Commissioner Controller on mission in an enterprise”.<br />
608. On the other hand, there is no specific provision making it possible to ensure that laws on<br />
professional secrecy of financial institutions do not hamper the exchange of information between financial<br />
institutions when it is required by Recommendations 7 and 9 or Special Recommendation VII.<br />
Analysis of Effectiveness<br />
609. During the discussions held on the occasion of the onsite visit, the mission was not informed<br />
about acts impeding the implementation of Recommendation 4.<br />
610. Both the Ministry of Finance and the BCEAO reported good cooperation with financial<br />
institutions in giving them access to information covered by professional secrecy, when necessary, for the<br />
fulfilment of their mandates. The financial institutions met also mentioned the existence of good<br />
collaboration among them and indicated that they communicate easily with the competent authorities<br />
acting in the framework of their missions, (CENTIF, Judicial Authorities and Oversight Authorities in<br />
particular), information required from them.<br />
3.4.2 Recommendations and Comments<br />
611. The mission recommends as follows:<br />
� The authorities should consider establishing provisions making it possible to ensure that the laws<br />
on the professional secrecy of financial institutions do not hamper the exchange of information<br />
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etween financial institutions when this is required by Recommendations 7 and 9 or Special<br />
Recommendation VII.<br />
� In addition, given the sensitivity of aspects concerning professional secrecy, the authorities should<br />
ensure that access to data covered is strictly limited to needs deriving from the mandates entrusted<br />
to AML/FT structures concerned.<br />
3.4.3 Compliance with Recommendation 4<br />
Rating Summary of Factors Underlying Rating<br />
R 4 LC In practice, there seems to be no obstacle hampering implementation of the<br />
GAFI Recommendation associated with the existence of laws on<br />
professional secrecy of financial institutions, notwithstanding the lack of<br />
specific ad hoc provisions.<br />
3.5 RECORD KEEPING AND RULES APPLICABLE TO ELECTRONIC FUNDS<br />
TRANSFERS (R.10 & SR.VII)<br />
3.5.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� -Act 2006-14 of 31/10/2006 on anti-money laundering;<br />
� -BCEAO Instruction 01 /2007/RB of 02/07/2007 on anti-money laundering within financial<br />
entities;<br />
� -Guideline 04/2007/CM/UEMOA of 4 July 2007 on combating terrorism financing in WAEMU<br />
member-States;<br />
� -Regulation 15/2002/CM/UEMOA of 19 September 2002 on payment systems within WAEMU;<br />
� -Regulation 00004/CIMA of 04/10/2008 on anti-money laundering and combating the financing<br />
of terrorism in member-States of CIMA;<br />
� -Regulation 09/98/CM/UEMOA on overseas financial relations.<br />
Recommendation 10<br />
Keeping of all documents required for the reconstitution of the different transactions (C.10.1/<br />
C.10.1.1).<br />
612. Article 11 of the AML Act requires that “without prejudice to the provisions recommending more<br />
constraining obligations, financial entities (i) maintain records and documents pertaining to the identity of<br />
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their usual and occasional customers for a period of ten (10) years, from the date of closure of their<br />
accounts or the cessation of their relationships with them; and (ii) maintain records and documents<br />
pertaining to transactions they have carried out for a period of ten (10) years from the end of the fiscal<br />
year during which the transactions occurred”.<br />
613. According to Article 10 (last paragraph) of the act and related to particular monitoring of certain<br />
transactions, “the main characteristics of the operation, the identity of the originator and beneficiary,<br />
eventually, that of the actors of the transaction are kept in a confidential register, with a view to making<br />
reconciliations, where necessary”.<br />
614. According to Article 5 of the BCEAO Instruction, “financial entities must maintain for ten (10)<br />
years from the date of closure of their accounts or cessation of their relationships, documents pertaining to<br />
the identity of their regular or occasional customers. They also keep documents on transactions carried out<br />
by the latter for ten years from the end of the fiscal year concerned”.<br />
615. Article 13 of the CIMA Regulation covering exclusively the insurance sector stipulates as<br />
follows: “Financial entities are required to keep, for at least ten (10) years, a trace of their transactions. In<br />
the framework of anti-money laundering, it will involve in particular:<br />
� Identity of each of the contracting parties (complete the identification sheet and a copy of an<br />
identity card).<br />
� Identity of all persons paying money (complete the identification sheet and a copy of an<br />
identity card).<br />
� -Form of payment or withdrawal: cash, transfers, cheque drawn on an account opened in the<br />
name of the customer, cheque issued by a third party (notaries, broker, third party without<br />
apparent link with the transaction, etc.), bank cheque, etc. in case cheque, keep a copy.<br />
� -Dates and amount of payments or withdrawals.<br />
� -Source or destination of the funds.<br />
� -Full audit trail.<br />
� -Register of reports to the Financial Intelligence Unit.<br />
� -Register of subscribers of anonymous capitalization funds and persons who request for buyback<br />
or reimbursement.<br />
616. It should be noted that compared to the AML Act, this text applicable only to the insurance sector,<br />
has the advantage of making 10 years a minimum period and providing more details on the nature of the<br />
information to be kept.<br />
Maintenance of identification data, accounts books and business correspondence (C.10.2)<br />
617. Article 11 of the AML Act mentioned above requires financial entities to maintain all records and<br />
documents concerning the transaction they have carried out without clarifying their nature, particularly in<br />
terms of explicitly including books of account and business correspondence as required by R.10.<br />
618. Regulation 15/2002/CM/UEMOA concerning payment systems in the WAEMU also contains<br />
provisions related to the keeping of documents. Hence, in Article 20, it requests banks and financial<br />
institutions to keep the documents in electronic form for a period of five (5) years and define the<br />
conditions of conservation of documents.<br />
108
619. The BCEAO Instruction on electronic money adopted in application of Regulation 15 above,<br />
stipulates in Article 6 that “the issuing institution ensure the traceability, for two (2) years, of the loading<br />
and payments from the electronic money units …”.<br />
Putting at the disposal of the national competent authorities for the accomplishment of their<br />
mission, at the appropriate time, all documents and information on customers and transactions<br />
(C.10.3)<br />
620. Article 12 of the AML Act concerning communication of records and documents stipulates: “the<br />
records and documents concerning the identification obligations set forth in Articles 7, 8, 9, 10 and 15 and<br />
whose conservation is mentioned in Article 11, shall be communicated, at their request, by the persons<br />
mentioned in Article 5, to the judicial authorities, government agents in charge of the detection and<br />
repression of offences associated with money laundering, acting in the context of a judiciary mandate, the<br />
oversight authorities as well as to CENTIF”.<br />
621. Since the notion of availability, which seems to translate the expression “timely” is not<br />
specifically taken into account by the legislation, it does not seem that persons subject to the act are<br />
requested to deal with this element required under R10.<br />
622. Furthermore, Article 6 of the BCEAO Instruction on electronic money mentioned above indicates<br />
that “the issuing institution has information of the loading and payments of electronic money units at the<br />
disposal of the monetary and oversight Authorities”.<br />
Special Recommendation VII<br />
623. The AML Act and BCEAO Instruction contain provisions concerning the customer<br />
identification obligation by the persons subjected to the law. In particular, the annex to the act sets forth<br />
specific provisions concerning remote operations with their natural person customers.<br />
624. Article 6 of the AML Act stipulates that “exchange transactions, capital flows and regulations of<br />
any kind with a third-party State should be carried out in accordance with the exchange regulations in<br />
force”.<br />
625. Article 4 of Regulation 09/98/CM/UEMOA concerning external financial relations stipulates<br />
that for the execution of transfers in amount not exceeding three hundred thousand (300,000) CFA francs<br />
(about 457 Euros), no support document is required for the operation. However, authorized intermediaries<br />
will verify the identity of the originator and the beneficiary so that this provision will not be used to make<br />
split payments or to constitute assets abroad.<br />
626. It should be specified that this general provision is based on the exchange regulations and does<br />
not seem to target specifically AML.<br />
627. Regulation 15/2002/CM/UEMOA concerning the payment systems listed in Articles 42, 132,<br />
133, 134 and 135 and agencies authorized to make wire transfers, in particular, and sets forth the<br />
obligations of the parties to the operation.<br />
109
Obtaining and keeping information on the originator of a transfer order (C.VII.1)<br />
628. The identification obligations set forth by the AML Act are enough to obtain in all cases complete<br />
information on the originator. This is the case for occasional customers who benefit from a control ceiling<br />
of CFA 5,000,000 (five million).<br />
629. Financial entities of the originators are under no obligation to obtain and keep complete<br />
information on the originator (name, account number and address) for all transfers equal to or above 1000<br />
Euros/US Dollars.<br />
Inclusion of information on the originator of a domestic transfer (C.VII.2)<br />
630. Article 14 of the WAEMU CFT Guideline requests member-States to take the necessary measures<br />
to ensure that any cross-border wire transfer is accompanied by accurate information on the originator, in<br />
particular the account number (the list of information to be provided is, therefore, not exhaustive). But<br />
since the law transposing this Guideline has not yet been promulgated, financial entities of the originators<br />
are under no obligation to include information on the originator of a domestic transfer.<br />
Inclusion of information on the originator of a domestic transfer (C.VII.3)<br />
631. Article 214 of the WAEMU CFT Guideline requests member-States to ensure that any domestic<br />
wire transfer includes the same data as in the case of cross-border transfers (see above). But, since the law<br />
for transposing this Guideline has not yet been promulgated, financial entities of the originators to obtain<br />
and keep information on the originator of a domestic transfer.<br />
Transmission of the transfer order with all the information required (C.VII.4)<br />
632. No beneficiary intermediary or financial institution in the payments chain is under obligation to<br />
verify that all the information on the originator required for the transfer are effectively transmitted with<br />
the transfer order. This lack of obligation also exists with regard to keeping the information provided by<br />
the financial institution of the originator when technical limitations prevent, in the context of a domestic<br />
transfer following a cross-border transfer, transmission of complete originator information required for an<br />
initial cross-border transfer.<br />
Adoption of efficient control procedures by the institutions based on a risk assessment (C.VII.5)<br />
633. Financial institutions are under no obligation to adopt efficient procedures based on a risk<br />
assessment in order to identify and process transfers that are not accompanied by complete originator<br />
information.<br />
Existence of efficient measures for controlling the implementation of SR VII (C.VII.6)<br />
634. In the absence of a constraining provision related to the originator, there are no basis and<br />
measures for controlling respect of the implementation rules of SR.VII by financial institutions.<br />
110
Application of criteria 17.1 through to 17.4 in relation to SR VII (C.VII.7)<br />
635. No sanction may be imposed in the absence of any legal obligation accompanied with penalties<br />
with regard to transfer originator information.<br />
Analysis of Effectiveness<br />
636. The officials of lending institutions and insurance companies met informed the mission that they<br />
kept records and documents out of professional practices or regulatory requirements of other sources, in<br />
particular accounting requirements.<br />
637. The banks met with indicated that their primary correspondent relationships were within the<br />
European Union, i.e. outside the WAEMU. Because of the standards applicable there, they pointed out<br />
that the constraints imposed by these standards are also binding on them since they condition the<br />
execution of their transfer orders, in particular in this area.<br />
The mission could, however, not verify the reality of these assertions.<br />
3.5.2 Recommendations and Comments R10 and SR VII<br />
638. The current Regulation should be completed so as to specify the nature and availability of<br />
documents to be kept by financial entities, in accordance with the requirements of R10<br />
639. Concerning SR VII, transfers represent a significant and growing activity for financial institutions,<br />
both within and outside the WAEMU zone. The absence of any measure reflecting the provisions of<br />
Recommendation VII is a particularly striking weakness.<br />
640. Benin should adopt as soon as possible legal provisions to facilitate implementation of R.VII, in<br />
particular, by adopting as soon as possible the Uniform Act transposing the WAEMU CFT Guideline.<br />
This act should, where necessary, be completed so as to compel financial institutions to meet all the<br />
criteria required under this Recommendation, particularly:<br />
- Demand, collect and keep for all transfers accurate and complete information (identity, address<br />
and account number) on the originator.<br />
- In case of treatment of unusual transactions, financial institutions should ensure individual followup<br />
of files and not treat them as a single batch.<br />
- Implement efficient control measures in accordance with SR VII.<br />
3.5.3 Compliance with Recommendation 10 and Special Recommendation VII<br />
Rating Summary of Factors Underlying Rating<br />
R 10 PC Nature and availability of documents to be kept by lending institutions not<br />
specified<br />
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RVII NC Lack of a CFT act due to the non transposition of the relevant WAEMU<br />
Guideline.<br />
Lack of constraining provisions as required under SR.VII, particularly full<br />
originator information and control of compliance.<br />
3.6 MONITORING OF TRANSACTIONS AND RELATIONSHIPS (R.11 & 21)<br />
Unusual or suspicious transactions<br />
3.6.1 Description and Analysis<br />
Recommendation 11<br />
Obligation to pay special attention to all complex abnormally large and unusual transactions having<br />
no economic or lawful purpose (C.11.1)<br />
641. Article 10 of the AML Act stipulates that any payment in cash or by bearer security of a sum of<br />
money, made under normal conditions, involving the unit or total sum of fifty million (50,000,000) CFA<br />
francs (about 76,224 Euros) or more must be carefully examined. The same applies to any transaction<br />
involving a sum of ten million (10,000,000) CFA francs or more, made in unusually complex<br />
circumstances and/or has no apparent economic justification or lawful purpose.<br />
642. Article 7 of the BCEAO Instruction stipulates that “financial entities must make provision for<br />
analysis of the transactions and profile of customers to help trace and monitor all particularly unusual<br />
financial movements and transactions”. A non-exhaustive list enumerates some of the said movements and<br />
transactions.<br />
643. For authorized manual foreign exchange agencies, Article 14 of the act stipulates that they<br />
“should, like banks, pay particular attention to transactions on which no regulatory limit is imposed and<br />
which could be carried out for purposes of money laundering from the moment it involves an amount of<br />
five million (5,000,000) CFAF francs” (about 7622 Euros).<br />
Examination of the background and purpose and recording the results in writing (C.11.2)<br />
644. Article 10, paragraphs 2 and 3 of the AML Act stipulates that persons subject to the act (namely<br />
the FIs) “are required to obtain information from the customer, and/or by any other means, concerning the<br />
origin and destination of the sums of money in question, as well as the purpose of the transaction and the<br />
identity of the persons involved, in accordance with the provisions of paragraphs 2, 3 and 5 of Article 7.<br />
The main characteristics of the operation, the identity of the originator and the beneficiary, eventually, that<br />
of the actors of the transaction are recorded in a confidential register, with a view to making comparisons,<br />
if necessary”.<br />
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645. Concerning the insurance sector, Article 7.2 of the CIMA Regulation stipulates: “Insurance<br />
companies must provide for a mechanism for analyzing the transactions and profile of customers, to help<br />
trace and monitor unusual transactions.<br />
To that end, they must:<br />
� -carefully examine contracts registering high and frequent movements.<br />
� -carefully examine transactions remarkable by their amount, their mode of payment, the origin or<br />
destination of the funds, their collateral, etc.<br />
� -ensure that the special procedure for unusual transactions has been effectively followed and<br />
complied with”.<br />
646. Furthermore, Article 10 of this Regulation contains a list “of unusual transactions” and some of<br />
which are comparable to procedures for laundering money in the insurance sector.<br />
Providing the competent authorities and auditors with results of the examinations for a period of 5<br />
years (C.11.3)<br />
647. Article 12 of the Act stipulates that the records and documents concerning the relevant<br />
identification obligations, in particular this Article 10 and whose conservation is mentioned in Article 11,<br />
are communicated upon request by the persons to which it applies, to the judiciary authorities, government<br />
employees in charge of the detection and repression of money laundering offences, acting in the<br />
framework of a judicial mandate, the oversight authorities, as well as CENTIF. It should be noted that<br />
auditors are not among the addressees.<br />
648. Article 11 of the Act concerning the keeping of records and documents by financial entities,<br />
stipulates for a period of 10 years, well above the 5 years proposed by the FATF.<br />
649. In the insurance sector, Article 13 of the CIMA Regulation stipulates for a minimum period of 10<br />
years for keeping the documents, in particular “the register of subscribers to anonymous capitalization<br />
bonds and persons who request for buy-back or reimbursement”. Article 12 of the text stipulates that “this<br />
register must be represented to the auditors-controllers of insurance companies”. The competent<br />
authorities and auditors targeted by R11 are not mentioned.<br />
Recommendation 21<br />
Special attention to countries that do not or insufficiently apply the FATF Recommendations<br />
(C21.1)<br />
The AML Act did not directly address this issue.<br />
650. Article 10 of BCEAO Instruction 01/2007 stipulates that “financial entities mentioned in Article<br />
3 above are requested to pay particular attention to transactions carried out with countries, territories<br />
and/or jurisdictions declared by the FATF as being non-cooperative and by the persons targeted by assetfreezing<br />
measures on account of their presumed ties to an organized criminal entity. In this regard, the list<br />
of these countries/territories and jurisdictions as well as that of the persons targeted by asset-freezing<br />
measures must be regularly updated and communicated to the staff in the forefront of the fight against<br />
money laundering within the financial entity”.<br />
113
651. In the insurance sector, Regulation CIMA has established, in its Article 8.3 concerning the due<br />
vigilance obligations towards foreign legal persons (including: domiciled abroad), the following nonexhaustive<br />
list of “special cases” for which, in the context of specific monitoring if the request for the<br />
identity of the economic beneficiary is refused, a suspicious transaction report must necessarily be made<br />
to the FIU:<br />
� -International Business Company (Jersey, Guernesey, Isle of Man, Bahamas, Barbados, British<br />
Virgin Islands;<br />
� -Exempt Company ((Jersey, Guernesey, Isle of Man,, Gibraltar);<br />
� -Qualifying company (Bermuda, Cayman Islands);<br />
� -Aruba vrijgestelde vennootschap (AVV)<br />
652. Concerning the institution of efficient measures to ensure that financial institutions are informed<br />
of the above-mentioned concerns resulting from the weaknesses in the AML/FT mechanisms of other<br />
countries, there is no provision to that end.<br />
Examination of transactions having no apparent economic or lawful purpose (C21.2)<br />
Analysis of Effectiveness<br />
653. Generally, the onsite visits helped to observe that the prescribed AML obligations, namely the<br />
particular monitoring of certain operations of transactions are not well known or sometimes not at all by<br />
the actors. Only the banks have started gradually implementing some of the prescribed obligations.<br />
3.6.2 Recommendations and Comments R11 and R21<br />
654. The analysis of the texts reveals too many restrictions (texts applicable to financial entities alone)<br />
and a certain inconsistency between the AML Act and the BCEAO Instruction, particularly concerning<br />
ceilings.<br />
655. The authorities should address the weaknesses identified and consider taking appropriate<br />
measures, in particular:<br />
Concerning Recommendation 11<br />
- Request financial institutions to pay particular attention to any type of unusual transactions when<br />
they are not economically motivated without a priori limitation of ceilings.<br />
- Include auditors among persons authorized to have access to results of the examination of<br />
complex transactions, unusually high amounts or that have no economic or apparent legal<br />
purpose.<br />
Concerning Recommendation 21<br />
- Require financial institutions to pay particular attention to business relationships with residents of<br />
countries that apply the FATF Recommendations inadequately or not at all.<br />
- Put in place effective measures to advise financial institutions of concerns about weaknesses in<br />
the AML/FT systems of other countries.<br />
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- Put in place appropriate counter measures that Benin may decide to implement when a country<br />
continues to apply FATF Recommendations inadequately or not at all.<br />
3.6.3 Compliance with Recommendations 11 and 21<br />
Rating Summary of Factors Underlying Rating<br />
Poor knowledge or even ignorance of these obligations<br />
Auditors not included in the list of beneficiaries of the result of the points<br />
R 11 NC examined<br />
Partial implementation by the banks<br />
R21 NC<br />
Lack of implementation by the other financial institutions<br />
No efficient measures to ensure that financial institutions are informed<br />
about the concerns resulting from weaknesses of the AML/FT provisions of<br />
other countries<br />
No provisions pertaining to countries that apply FATF Recommendations<br />
insufficiently or not at all.<br />
3.7 SUSPICIOUS TRANSACTION REPORTS AND OTHER REPORTING (R.13-14,<br />
19, 25 & SR.IV)<br />
3.7.1 Description and Analysis<br />
Recommendation 13 & Special Recommendation IV<br />
� Act 97-025 of 18 July 1997 on the control of Drugs and Precursors;<br />
� Order 0057/MISAT/DC/SG/DGPN/DPJ/SA of 05 March 1999 on creation of a unit for combating<br />
laundering of money of fraudulent origin at the Judicial Police Department;<br />
� Act 2006-14 on anti-money laundering in Benin;<br />
� BCEAO Instruction 01/2007/RB of 27 July 2007;<br />
� BCEAO Instruction /2006/SP of 31 July 2006 on the issue of electronic money and electronic<br />
money institutions;<br />
� Regulation 00004/CIMA of 04/10/2008 defining procedures applicable by insurance agencies<br />
within member-States of CIMA in the framework of AML/FT;<br />
� Guideline 04/2007/CM/UEMOA of 04 July 2007 on combating the financing of terrorism.<br />
Obligation to make a suspicious transaction report (STR) in the event of suspicion of money<br />
laundering or terrorism (13.1, 13.5 (additional elements) and SR IV.1)<br />
115
656. Article 126 of Act 97-025 of 18 July 1997 on Control of Drugs and Precursors stipulates as<br />
follows: “Persons who, in the exercise of their profession carry out, control or offer advice on transactions<br />
involving capital flows, public and private banking and financial institutions, postal services, insurance<br />
companies, mutual funds, stock markets and manual foreign exchange operators are required to inform<br />
the competent judicial authority from the moment they suspect that sums or transactions on these sums<br />
are likely to come from offences provided for in Articles 95 through to 97 (cultivation, production,<br />
manufacture, high-risk drug trafficking), 100 and 101 (high-risk drugs, precursors, equipment and<br />
materials) even if the transaction whose execution it was impossible to suspend has been carried out”.<br />
657. By Order 0057/MISAT/DC/SG/DGPN/DPJ/SA of 05 March 1999, Benin created a Money<br />
Laundering Control Unit attached to the Judicial Police Directorate and entrusted, in particular, with the<br />
missions of “receiving reports of suspicious transactions forms banks and lending institutions”.<br />
658. Article 7 of BCEAO Instruction /2006/SP of 31 July 2006 concerning the issue of electronic<br />
money and electronic money institutions imposed on electronic money issue or distribution institutions the<br />
obligation to report “anomalies” observed in the context of their money laundering control mechanism to<br />
CENTIF, as provided for in the WAEMU Guideline and derived texts adopted in accordance with the<br />
provisions of this Guideline. The notion of “anomaly” is, however, not specified.<br />
659. Act 2006-14 on AML came to enhance this provision. Hence, Article 26 of this Act stipulates<br />
that “persons targeted in Article 5 are requested to report to CENTIF, under the conditions fixed by this<br />
act and according to a declaration model fixed by order of the Minister of Finance:<br />
� sums of money and other property that are in their possession, when the latter could come from<br />
money laundering;<br />
� transactions on property, when the latter could be associated with money a money laundering<br />
process;<br />
� sums of money and all other property in their possession, when such items suspected of being<br />
intended to finance terrorism, appear to derive from ML-related activities”.<br />
660. Article 9 of the act also sets forth a suspicious transaction reporting obligation when doubt<br />
persists as to the identity of the economic beneficiary after the financial entity has made fruitless<br />
attempts through all means to obtain information on the identity of the person on whose behalf it is acting.<br />
661. It should be noted that the AML Act makes it an obligation to report suspicions only for<br />
transactions associated with money laundering and financing of terrorism. Hence, it does not cover all 20<br />
categories of designated offences considered by the FATF as a minimum.<br />
662. The same provisions are provided for in a restrictive manner in Article 11 of BCEAO Instruction<br />
01/2007/RB. Indeed, this instruction specifies that “financial entities mentioned in Article 3 above (banks<br />
and financial institutions, post office financial services, Caisses de dépôts et consignations or agencies<br />
representing them, mutual-beneficial or cooperative credit and savings institutions, as well as structures or<br />
organizations not constituted in the form of mutual-beneficial or cooperative savings and credit<br />
institutions having as an objective collection of savings and/or credit, authorized manual foreign exchange<br />
agencies) should report suspicious transactions”.<br />
116
663. These reports concern “transactions involving sums that could be part of a money laundering<br />
process, in particular:<br />
� Sums registered in their books that could derive from drug trafficking or organized crime<br />
activities;<br />
� Transactions involving sums, when these could derive from drug trafficking or organized<br />
crime activities;<br />
� Any transaction where the identity of the originator or beneficiaries is doubtful;<br />
� Notwithstanding the execution of activities in accordance with the provisions of Articles 7<br />
through to 9 of the Uniform Act;<br />
� Operations carried out by financial entities on their own account or on the account of third<br />
parties with natural or legal persons, including their subsidiaries or institutions, acting in the<br />
form or on behalf of trust funds or any other management tool of an allocation wealth of<br />
which the identity of the constituents or beneficiaries is not known.<br />
664. It should be noted that compared to the AML Act, the BCEAO AML Instruction comes to extend<br />
the scope of predicate offences that should result in STRs, drug trafficking or “organized crime activities”.<br />
But, this Instruction has no force of law and is targeted at a limited category of persons subjected to it.<br />
665. The CREPMF Instruction issued in November 2009 comprises the same provisions as those of the<br />
BCEAO in the area of STR.<br />
666. Article 15 of the CIMA Regulation stipulates as follows; “The official in charge of the<br />
implementation of anti-money laundering programmes must make the necessary suspicious transactions<br />
reporting to the Financial Intelligence Unit. In exceptional cases, in particular because of the emergency,<br />
any manager or employee of the enterprise can take the imitative of reporting a suspicious transaction to<br />
the FIU, even if he is not the internal official in charge of the implementation of anti-money laundering<br />
programme”. Such an opening must be seriously supervised in order to prevent suspicious transaction<br />
reporting from the insurance sector from losing credibility. It should also be noted that Article 8.3 of this<br />
Regulation imposes an obligation of suspicious transaction reporting to the FIU, when in the exercise of<br />
the due customer diligence, for the purpose of obtaining identity of the economic beneficiary, an insurance<br />
company of CIMA zone is refused by another company domiciled in jurisdictions not long ago considered<br />
as tax haven (Jersey, Caiman Islands, etc.)..<br />
STR obligation in the case of funds related to terrorism (13.2 and SR IV.2)<br />
667. Article 26 of the AML Act creates an obligation to report to CENTIF all ML transactions that are<br />
also suspected of being intended for FT. This provision does not create any new obligation relative to the<br />
other provisions of Article 26, but specifies that transactions linked ML must be reported to CENTIF,<br />
even when they are also suspected of being intended for FT.<br />
668. Apart from funds covered by STR obligation with regard to ML, the obligation to make an STR<br />
does not apply to funds for which there are reasonable grounds for suspecting, or of which it is suspected<br />
that such funds are linked or related to, or are to be used for terrorism, terrorist acts or by terrorist<br />
organizations or those who finance terrorism.<br />
117
669. Furthermore, Article 10 of the WAEMU CFT Guideline requests member-States to take essential<br />
measures to ensure that persons subject to the law proceed without delay to make suspicious transaction<br />
reports to CENTIF when they suspect, or have reasonable grounds to suspect that the funds are linked to,<br />
related to, or are to be used for the financing of terrorism and/or terrorist acts. Since the law transposing<br />
this Guideline has not yet been adopted, the requirement of STR for funds related to terrorism cannot be<br />
met.<br />
Obligation to report all suspicious transactions (C.13.3)<br />
670. According to Article 26 of the AML Act related to the suspicious transaction report obligations,<br />
financial institutions are under obligation to report, without limitation of a ceiling:<br />
- sums of money and all other property in their possession, when the latter could derive from money<br />
laundering;<br />
- transactions that concern property, when the latter could be associated with a money laundering<br />
process;<br />
- sums of money and all other property in their possession, when the latter, suspected of being<br />
intended for the financing of terrorism, seem to derive from transactions associated with money<br />
laundering.<br />
671. Furthermore, Article 3 of the same act describes as money laundering offence “the attempt” to<br />
commit an act that constitutes money laundering.<br />
Hence, even if the act does not explicitly mention it, any attempted transaction should be declared to<br />
CENTIF.<br />
Tax Evasion (C.13.4)<br />
672. The AML Act contains no special provision on tax evasion, but it describes as money laundering<br />
offence, any crime or offence (including tax evasion). Consequently, the suspicious transaction report<br />
obligation should be applicable, whether or not these transactions are considered as covering tax issues as<br />
well.<br />
Analysis of Effectiveness<br />
673. Some of the financial entities visited indicated that they had in the past transmitted suspicious<br />
transaction reports to Money Laundering Control Unit attached to Judicial Police Directorate. Some of<br />
these reports resulted in convictions for predicate money laundering offences. On the advent of the AML<br />
Act, suspicious transaction reports regarding money laundering were sent to the BCEAO, pending the<br />
establishment of CENTIF. CENTIF, on its part, confirmed receiving from the BCEAO STRs received<br />
from local banks. On the other hand, other financial entities subject to the act like insurance and<br />
reinsurance companies, financial institutions, microfinance institutions, the Post Office, the National<br />
Branch of the Bourse Régionale des Valeurs Mobilières (BRVM), authorized manual foreign exchange<br />
agencies, said they had not made suspicious transaction reports in the context of anti-money laundering<br />
and financing of terrorism, at times due to ignorance of the act and their obligations in that respect, in<br />
particular those related to declarations of suspicion.<br />
118
674. Besides, all those concerned by the act in the sector have not yet received the model of the<br />
suspicious transaction report form. Some banks acknowledged having made suspicious transaction reports.<br />
CENTIF admitted that the dissemination of the models of the suspicious transaction report form<br />
concerned institutions organized into associations like banks or insurance companies.<br />
675. There is no formal obligation to declare attempted suspicious money laundering transactions in<br />
Benin.<br />
676. Since the Guideline on combating the financing of terrorism is now being incorporated into the<br />
legal order of Benin, STRs on the financing of terrorism cannot prosper.<br />
677. Moreover, it should be noted that no STR has resulted in prosecution for money laundering in the<br />
Courts of Benin since the adoption of the AML Act.<br />
In total, there is lack of effective implementation of the act in most of the financial entities subject to it.<br />
Recommendation 14<br />
C.14.1 Protection in case of STR<br />
678. Article 128 of Act 97-025 of 18 July 1997 on the control of drugs and precursors stipulates<br />
that: “No prosecution for violation of professional secrecy may be initiated against managers or<br />
employees of the agencies listed in Article 126, even if investigations of legal decisions eventually show<br />
that the declarations, which were made in good faith, were baseless. Compensation for the damage<br />
suffered by the persons concerned by the declaration is the exclusive responsibility of the State”.<br />
679. Article 30 of the AML Act stipulates that “persons or managers of employees of persons<br />
mentioned in Article 5 (i.e. persons subject to the act) who, in good faith, transmitted information or made<br />
any report, in accordance with the provisions of this act, shall be exempted from all penalties for violation<br />
of the professional secrecy. No action in civil or criminal liability may be taken, nor professional sanction<br />
pronounced against persons or managers or employees of persons mentioned in Article 5, who acted under<br />
the same circumstances as those provided for in the previous paragraph, even if justice decisions handed<br />
down on the basis of the declarations mentioned in this same paragraph did not lead to a conviction.<br />
Besides, no action in civil or criminal liability may be taken against the persons mentioned in the previous<br />
paragraph due to material and or moral damages that could result from the blockage of a transaction by<br />
virtue of the provisions of Article 28. The provisions of this are applicable by right, even if the proof of<br />
the criminal nature of the acts at the origin of the declaration is not established or if these acts have been<br />
amnestied or resulted in a decision of non-suit, discharge or acquittal”.<br />
680. Although it does not specify it, the wording of the act suggests that this protection should be given<br />
to the interested persons, even if they did not specifically know the criminal activity in question, and even<br />
if the illegal activity which was the subject of suspicion did not really occur.<br />
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Prohibition against disclosing an STR to the customer (C.14.2)<br />
681. Article 26 paragraph 4 of the AML Act stipulates that “These reports are confidential and may not<br />
be communicated to the owner of the funds or to the originator of the transactions”. This provision does<br />
not exactly reflect the prohibition against communicating an STR in accordance with FATF standards, for<br />
(i) it concerns only an STR and not other information communicated or provided to CENTIF concerning<br />
this STR, (ii) it seem to target only the communication of the declaration and not that of its existence.<br />
682. The violation of this prohibition is liable to criminal sanctions by virtue of the provisions of<br />
Article 40 of the AML Act pertaining to criminal penalties of certain wrongdoings associated with money<br />
laundering, which stipulates that “shall be punishable by a prison term of six months to two years and a<br />
fine of CFAF 100,000 to 1,500,000 or one of the two penalties alone, persons and managers or employees<br />
of natural or legal persons mentioned in Article 5, when the latter shall have intentionally committed the<br />
following acts:<br />
� Revelations on suspicious transaction reporting made to the owner of the amounts or author of the<br />
transactions concerned;<br />
� Information on the persons targeted by the investigation conducted on money laundering acts;<br />
� Communication of information or documents to persons other than those mentioned in article 12.<br />
Hence, penalties are not provided for when a person makes revelations on an unintentional<br />
declaration.<br />
It should be noted that the hypothesis of unintentional violation is not envisaged.<br />
683. Article 15 of the CIMA Regulation stipulates as follows: “The declarant or any other person<br />
attached to the business (manager, salaried worker, employee, principal) should under no circumstance<br />
communicate to suspects the least information on the existence of a declaration of suspicion or its followup<br />
actions. The violation of this professional secrecy shall be liable to criminal sanctions. This<br />
confidentiality must also be applicable to suspicions addressed to the declarant by any person attached to<br />
the business (manager, salaried worker, employee, principal), even if this suspicion does not result in an<br />
effective declaration of suspicion”.<br />
684. Furthermore, Article 17 of the same Regulation specifies, concerning brokers: “Although legal<br />
representatives of insured persons and subscribers, insurance and reinsurance brokers who make a<br />
suspicious transaction report are requested not to inform their principals on penalty of incurring the<br />
penalties provided for by the regulation on anti-money laundering and combating the financing of<br />
terrorism:”.<br />
Additional elements (14.3)<br />
685. The AML Act stipulates that the information held by CENTIF is confidential. Hence, Article 29<br />
of the act stipulates that the CENTIF report to the State Prosecutor is accompanied by all useful support<br />
documents with the exception of the suspicious transaction report. The identity of the staff making STRs<br />
should not appear in the said report, which constitutes evidence until proven otherwise. Consequently, the<br />
confidentiality of the information and names must be respected by CENTIF, in accordance with the act.<br />
120
Analysis of Effectiveness<br />
686. CENTIF acknowledged having received suspicious transaction reports. But they have not yet been<br />
treated mainly due to the recent installation of the CENTIF, which had just received these declarations.<br />
It is difficult, under these conditions, to assess the effective application of the confidentiality criteria.<br />
Furthermore, some persons subject to the act acknowledged having rejected transactions that seemed<br />
suspicious to them for fear of being confronted with problems of confidence with their customers.<br />
Recommendation 19<br />
Study of a system for reporting currency transactions (C.19.1)<br />
687. During the passage of the mission, no study had been conducted to assess the feasibility and<br />
usefulness of the implementing system by which financial institutions would declare all currency<br />
transactions above a certain amount to a national central agency with a computerized database. At<br />
community level, no similar study has been published by the competent authorities.<br />
Recommendation 25<br />
Guidelines to assist persons subject to the act to meet their obligations (C.25.1)<br />
688. Article 13 of the AML Act invites the oversight authorities to specify, where necessary, the<br />
content and modalities of the implementation of money laundering prevention programmes.<br />
689. The BCEAO, indeed, issued an Instruction in February 2007 containing additional clarifications<br />
in the AML Act to enable persons subject to it to better meet their AML obligations.<br />
690. The CIMA did the same with the adoption of an ad hoc Regulation in April 2008, applicable to<br />
insurance companies of member-States.<br />
691. The CREPMF, for its part, issued an Instruction for authorized actors of the WAEMU regional<br />
financial market in November 2009, or five (5) months after the passage of the mission, which enabled<br />
them to take it into account for the evaluation.<br />
Feedback and advice on STRs (C.25.2)<br />
692. Article 28 of the AML Act requests CENTIF to acknowledge receipt of any written suspicious<br />
transaction report.<br />
693. Article 29 of the AML Act stipulates that CENTIF shall inform, at the appropriate time, those<br />
required to make STRs on the conclusions of its investigations.<br />
121
694. Article 15.4 of the CIMA Regulation concerning the insurance sector provides a feedback of the<br />
FIU in these terms: “When the FIU has referred a case to the State Prosecutor, it informs the business<br />
about it at the appropriate time”.<br />
695. The statistics of STRs received are available in the 2008 Activity Report of CENTIF of Benin.<br />
The activity reports at the end of December 2008 and the first quarter of 2009 were communicated to the<br />
BCEAO and the MEF. CENTIF informed the mission that it intended to conduct studies on the<br />
techniques, methods and typologies of money laundering in the Republic of Benin. This study had not yet<br />
started at the time of the passage of the mission.<br />
Analysis of Effectiveness<br />
696. According to CENTIF, the suspicious transaction reports received in writing but only from banks,<br />
were registered and the acknowledgement of receipts were sent within 72 hours on the average. The other<br />
financial entities had not made any suspicious transaction report. Since the full treatment of the files<br />
received was not yet effective, it was not possible to assess the feedback on the conclusions of the<br />
investigations.<br />
697. The mission received a copy of CENTIF’s 2008 Activity Report. A section of the report is<br />
devoted to the treatment of STRs (number, origin, stage of treatment). But, the report was only transmitted<br />
to the Minister of Finance and BCEAO.<br />
Recommendation 32<br />
698. Virtually all the competent authorities do not keep statistics on issues related to the effectiveness<br />
and efficient functioning of the provisions on the fight against money laundering and the financing of<br />
terrorism<br />
699. Concerning the banking sector, since the BC and the BCEAO are community oversight agencies,<br />
it was not possible to have information from the BC, which is based in Abidjan. The national agency of<br />
the BCEAO declared having received from lending institutions reports on the implementation of the AML<br />
scheme in accordance with the relevant Instruction.<br />
The consultations of these reports by the mission made it possible to collect the following statistical data:<br />
Years Number of reports received by<br />
BCEAO<br />
2007 7 13<br />
2008 5 -<br />
Number of STRs contained in<br />
these reports<br />
700. Regarding the other entities concerned, no statistics on the effectiveness and efficient functioning<br />
of the AML/FT provisions were registered.<br />
701. Moreover, statistics on seizures of foreign currency by customs units were presented to the<br />
mission by the Customs Department. They are summarized in the table below:<br />
122
Year Foreign Amount Customs<br />
(place)<br />
Units<br />
2005 CFAF<br />
87,990,000<br />
Kraké<br />
Dollars<br />
Bogus money<br />
2009 Dollars<br />
Euros<br />
66,100<br />
10,000,000<br />
206,600<br />
24,350<br />
3.7.2 Recommendations and Comments<br />
To enable Benin to comply, the mission makes the following recommendations:<br />
Kraké<br />
Kraké<br />
Cotonou-Airport<br />
Cotonou-Airport<br />
R 13<br />
� Extend the STR to include predicate offences as defined by FATF.<br />
� Define requirements for reporting attempted operations;<br />
� Institute the obligation to effect an STR concerning funds for which there are reasonable<br />
justifications to suspect or which are suspected as being associated or in connection with or that<br />
they are going to be used for terrorism, with terrorist acts or terrorist organizations or with those<br />
who finance terrorism, in the framework of the transposition of the WAEMU CFT Guideline;<br />
� Pursue the efforts to disseminate the AML, and the suspicious transaction report model, on the<br />
one hand, and training as well as sensitization, on the other hand, in order to enable those<br />
concerned to better know their obligations in the fight against money laundering and the financing<br />
of terrorism, particularly concerning STRs.<br />
R 14<br />
� Prohibit the disclosure of information on STRs to any third party not duly mandated to have<br />
access to it.<br />
� Ensure effectiveness in the application of the sanctions in case of offence.<br />
R 19<br />
� Get the national and/or community authorities to explore the possibility of putting in place a<br />
system by which financial institutions would report all cash transactions involving sums higher<br />
than a specific amount to a national agency with a computerized database.<br />
R25<br />
� Formulate guidelines for all subjected persons.<br />
123
� Organize and implement in a convenient and appropriate manner the feedback by the competent<br />
authorities, particularly CENTIF for the persons concerned.<br />
3.7.3 Compliance with Recommendations 13, 14, 19, 25.2 and SR.IV<br />
Rating Summary of Factors Underlying Rating<br />
R 13 PC Limitation by AML of STR of money laundering and financing of<br />
terrorism.<br />
No obligation to report attempted operations<br />
Incomplete dissemination of STR templates<br />
Many liable persons are unaware of their STR obligations<br />
Lack of implementation<br />
R 14 LC AML Act vague on FATF requirements due to the fact that it only deals<br />
with STR and other information made available to CENTIF relating to the<br />
STR<br />
R 19 NC No feasibility or desirability study for implementation of a cash transaction<br />
reporting system starting from a given threshold at a national central<br />
agency with computerized database; no plans to do this<br />
R 25 PC Lack of guidelines in some financial entities<br />
Feedback not in conformity with the requirements<br />
SR IV NC Lack of obligation to report FT-related transactions<br />
3.8 INTERNAL CONTROLS, COMPLIANCE AND FOREIGN BRANCHES (R.15 &<br />
22)<br />
3.8.1 DESCRIPTION AND ANALYSIS<br />
Internal controls and other measures<br />
Recommendation 15<br />
Obligation of establishment and maintenance of internal control procedures, policies and measures<br />
(C.15.1)<br />
702. Article 13 of the AML Act stipulates that financial entities are under obligation to develop<br />
harmonized money laundering prevention programmes. These programmes should comprise, in particular:<br />
the centralization of the data on the identity of customers, originators, legal representatives, economic<br />
beneficiaries, treatment of suspicious transactions, appointment of internal officials in charge of the<br />
implementation of the AML programmes, continuing staff training, and establishment of an internal<br />
control system, application and efficiency of measures adopted in the framework of the AML.<br />
703. This obligation is also prescribed by its Articles 13 (establishment of an anti-money laundering<br />
unit), 15 (internal anti-money laundering programme) and 16 (control of the internal anti-money<br />
124
laundering programme). All institutions subjected to this Instruction are under obligation to put in place an<br />
internal AML/FT control system. The anti-money laundering system must be explicitly entrusted to an ad<br />
hoc structure, which may be the one in charge of control or internal audit.<br />
704. Circular 10-2000/CB of the ML-WAMU, relating to internal control in lending institutions<br />
indicate that the internal control system aims at “verifying that the transactions carried out, the<br />
organization, internal procedures are in line with the legislative and regulatory provisions in force (in this<br />
case the AML legislation)”.<br />
705. In the insurance sector, Article 4 of Regulation 00004/CIMA recalls these obligations for the<br />
attention of insurance companies in member-countries of the CIMA, specifying that the function of<br />
Internal Officer in charge of the implementation of the AML programmes may be entrusted to the Internal<br />
Audit or Management Control Officer.<br />
706. Concerning access, at the appropriate time, to all the information on vigilance measures in the<br />
insurance sector, the CIMA Regulation imposes on insurance companies the obligation to ensure that the<br />
Internal AML Officials “have easy access to all useful information”.<br />
707. Such specification is not provided by the texts concerning the other categories of financial entities.<br />
But, in practice, according to the agencies met, the internal procedures applicable in the framework of the<br />
AML system enable the interested parties to have access at any time to all necessary information for the<br />
performance of their duties.<br />
708. At the level of the regional financial market, the CREPMF Instruction issued in November 2009<br />
(after the passage of the mission) imposes on actors of the said market, the establishment of anti-money<br />
laundering mechanisms, in particular the attribution of the implementation and control to the Internal<br />
Controller (Articles 13 and 15) and the training of staff (Article 14). Moreover, the SGI and SGP are<br />
under obligation to put in place an internal control system by virtue of Article 54 of the general regulation<br />
on the organization, functioning and control of the WAEMU financial market.<br />
Putting in place an independent control system endowed with resources (C.15.2)<br />
709. According to the terms of the BC-WAMU circular on internal control in lending institutions, “the<br />
internal control policy is implemented by making available appropriate human, material and technical<br />
resources”.<br />
710. Article 13 of the BCEAO Instruction stipulates that: “The executive body must put at the disposal<br />
of the official in charge of the anti-money laundering system appropriate and adequate resources in order<br />
to guarantee an operational independence for the accomplishment of his mission”. Article 16 of this<br />
Instruction specifies, moreover, that “the internal anti-money laundering programme must be subjected to<br />
the scope of competence and investigation of a structure or authority independent from the one in charge<br />
of its implementation. This structure or body is under obligation to report periodically on its control to the<br />
deliberating body”.<br />
711. In the stock market sector, Article 13 of the new Instruction of the CREPMF stipulates that “The<br />
executive body must put at the disposal of the Internal Controller in charge of the anti-money laundering<br />
system adequate and sufficient (human and material) resources in order to guarantee an operational<br />
independence for the accomplishment of his mission”.<br />
125
712. Article 4.1 of the CIMA Regulation indicates, for its part, that insurance companies should ensure<br />
that the internal officials in charge of implementation of the AML programmes “have sufficient powers”.<br />
During the meetings, the issue of inadequate resources was often raised.<br />
Ongoing staff training (C.15.3)<br />
713. Article 13 of the AML Act provides for ongoing staff training as part of the AML internal<br />
programmes.<br />
714. This obligation is specified in Article 14 of the BCEAO Instruction, which provides for staff<br />
training (communication of the provisions of the legal texts in force) as well as its training (supply of<br />
procedures manual, training plan and sensitization to typologies).<br />
715. The ad hoc provisions of the BCEAO Instruction were recalled by the CREPMF Instruction which<br />
entered into force in November 2009.<br />
716. In the insurance sector, the obligations in the area of training are set for the benefit of AML<br />
Official and the persons concerned (Article 4.1).<br />
717. During the visits to the Financial Institutions, the mission was informed that the AML training<br />
courses were received during the sensitization or training seminars organized by CENTIF, <strong>GIABA</strong> or<br />
other Institutions. These training activities were especially targeted at the front office staff and agency<br />
heads.<br />
718. This information is corroborated by the information contained in the periodic reports transmitted<br />
to the BCEAO and to which the mission had access.<br />
719. However, it was pointed out that the beneficiaries of the training did not systematically pass on<br />
the knowledge to other colleagues and that continuing training has not yet been instituted.<br />
Vigilance measure during hiring of staff (C.15.4)<br />
720. Act 90-018 of 27 July 1990 on bank regulation establishes criteria for hiring bank employees.<br />
Article 17 prohibits the recruitment in a bank or a financial institution of any person convicted for<br />
committing, conspiring to commit or attempting a long list of offences (including forgery, use of forged<br />
public/private documents, fraud). In practice, before hiring, each bank requires presentation of the<br />
criminal record.<br />
721. Article 4.6 of the CIMA Regulation stipulates that “insurance businesses should develop systems<br />
for controlling conformity and appropriate procedures when hiring employees to ensure that it is done in<br />
accordance with the requisite criteria”.<br />
Similar provisions exist in the other FIs like manual foreign exchange agencies, formalized and<br />
decentralized financial institutions.<br />
126
Additional elements - (C.15.5)- Independence of the AML control officer<br />
722. In the FIs met and which have put in place an internal AML control, as prescribed by law, there<br />
seems to be so particular difficulty for the AML control officer to act independently. In practice, the<br />
STRs, for example, are handled in collaboration with the Senior Management. Besides, it does not seem<br />
established that the said officer can communicate with the Board of Directors without passing through the<br />
General Management.<br />
Analysis of Effectiveness<br />
723. The discussions showed that with financial entities and the BCEAO, and from the reading of the<br />
periodic reports that the latter receives annually financial institutions (Article 17 of the AML Instruction),<br />
that only banks have started implementing the AML internal programmes and systems provided for by the<br />
AML Act and the application texts adopted, in particular by the oversight authorities. Even in these cases,<br />
problems of resources and autonomy seem to exist.<br />
724. One of the two banks visited has created a specific AML conformity department. The other bank<br />
has entrusted the control of AML conformity to an internal control agent. Hence, apart from banks, the<br />
other financial institutions do not seem to have created the ad hoc independent system, endowed with<br />
adequate resources.<br />
725. In total, the implementation of the obligations under R.15 does not seem effective in the other<br />
agencies concerned. In particular, virtually all the financial institutions have not implemented continuing<br />
AML/FT training programmes for their staff.<br />
726. Furthermore, the inadequacy of resources often appeared as a major concern of the actors<br />
themselves.<br />
Recommendation 22: Foreign branches<br />
Application of AML/FT measures to foreign branches and subsidiaries (C.22.1)<br />
727. The issue of conformity of foreign branches and subsidiaries of FIs was not explicitly addressed in<br />
the AML Act. However, Article 7 specifies that in case of remote financial transactions, financial entities<br />
identify the natural persons, in accordance with the principles set forth in the annex to the said act (formal<br />
adoption of this annex in Benin remains to be established)<br />
728. The provisions of point 6 of this annex, treat the requisite identification conditions, whether the<br />
counterpart is situated in the Union or not and also, when the identification obligations are not equivalent.<br />
729. Thus, when the counterpart is situated in the Union, the identification by the contracting agency is<br />
not required.<br />
730. When the counterpart is situated outside the WAEMU, the financial entity must verify its identity<br />
by consulting a reliable directory. In case of doubt in that regard, the financial entity must request for<br />
confirmation of the identity of its counterpart from the oversight authorities of the third-party country. The<br />
127
agency is also under obligation to take “reasonable measures” to obtain information on the customer of its<br />
counterpart, namely the beneficiary owner of the transaction.<br />
731. By virtue of the provisions of Article 9 of the AML Act, if the customer is not acting on its own<br />
behalf, the financial entity must obtain information by any means available on the identity of the person<br />
on whose behalf the customer is acting.<br />
732. No provision prescribes to financial institutions that their foreign branches and subsidiaries<br />
established in countries that do not or inadequately apply the FATF Recommendations, observe the<br />
AML/FT measures (C.22.1.1).<br />
733. There are no legal provisions in Benin stipulating that when the minimal AML/FT standards of<br />
host countries and countries of origin differ, the branches and subsidiaries in the host countries should be<br />
required to apply the most rigorous standard, so long as the local legislative and regulatory texts (i.e. in the<br />
host country) permit that (C.22.1.2.)<br />
Information of the supervisor in case of non-compliance with the AML/FT measures (C.22.2)<br />
734. Neither the Beninese legislation nor community texts contain provisions on this point.<br />
Additional elements –Consistency of the vigilance measures at the level of the group (C.22.3)<br />
735. There are no regulatory provisions on this. One of the banking institutions met with during the<br />
mission and the BCEAO mentioned the non-existence of practical cases on that issue in Benin<br />
3.8.2 Recommendations and Comments<br />
736. The competent authorities should ensure:<br />
Concerning R.15<br />
� the appointment of AML officials endowed with powers, in particular of timely access to information<br />
and documents, as well as necessary resources for the accomplishment of their mission;<br />
� institution of continuing staff training;<br />
� the definition of constraining AML/FT criteria at the time of recruitment;<br />
� the verification of the effectiveness of the implementation of the internal control system in all FIs.<br />
Concerning R.22<br />
� Create for all banks and financial institutions an obligation to ensure that their foreign branches<br />
and subsidiaries apply the AML/FT standards and inform their supervisory authorities in case they<br />
cannot comply with the standards.<br />
128
3.8.3 Compliance with Recommendations 15 and 22<br />
Rating Summary of factors Underlying Rating<br />
Lack of compliance with the obligation related to the establishment of an<br />
R 15 PC<br />
internal AML control system and appointment of ad hoc officials in most<br />
financial entities<br />
R 22 NC<br />
3.9 SHELL BANKS (R.18)<br />
3.9.1 DESCRIPTION AND ANALYSIS<br />
Limited training and lack of continuing training<br />
No requirement for financial institutions to ensure that company<br />
subsidiaries and branches outside the country comply with AML/CFT<br />
measures<br />
No requirement for FIs to inform supervisory authorities about a subsidiary<br />
or branch outside the country not complying with AML/CFT measures<br />
Recommendation 18<br />
Countries should not approve the establishment or accept the continued operation of shell banks.<br />
(C.18.1)<br />
The conditions of access to the banking profession, with sanctions attached, especially the<br />
certification process, are a deterrent to the establishment of shell banks in Benin.<br />
737. Article 7 of the Banking Act stipulates that without prior licensing and registration on the list of<br />
banks, no one shall carry on the business of banking as set forth in Article 3, or play the role of a bank or<br />
banker, or create such an impression, by using terms such as bank, banker or banking in the company<br />
name, trade name, publicity or in any other way whatsoever.<br />
738. Without prior licensing and registration on the list of financial institutions, no person shall carry<br />
out the business of banking as set forth in Article 4, play the role of a financial institution, or create such<br />
an impression, by using terms pertaining to one of the activities stated in Article 4, in its company name,<br />
trade name, publicity or in any other way whatsoever.<br />
739. Article 49 of this same law stipulates that any person who, acting on his own on behalf or on<br />
behalf of a third party, violates these provisions, shall be sentenced to one month’s imprisonment and<br />
liable to a fine of CFAF 2 million to 20 million, or only one of these penalties.<br />
740. However, the banking law does not prohibit the establishment of shell Banks in Benin.<br />
741. The AML Act has no specific provisions prohibiting the establishment of shell banks in Benin,<br />
less so on plying their trade in the country.<br />
129
Financial institutions should refuse to enter into, or continue, a correspondent banking relationship<br />
with shell banks (C.18.2)<br />
742. The regulations have no specific provisions forbidding financial institutions to enter into or<br />
continue a correspondent banking relationship with shell banks.<br />
743. The banks met say that they have never had this type of correspondent banking relationship.<br />
Financial institutions should also guard against establishing relations with respondent foreign<br />
financial institutions that permit their accounts to be used by shell banks. (C.18.3)<br />
744. There is no provision requiring financial institutions to guard against foreign financial institutions<br />
that permit their accounts to be used by shell banks.<br />
3.9.2 Recommendations and Comments<br />
745. There is no express provision prohibiting the establishment of shell banks or correspondent having<br />
banking relations with such banks; furthermore there are no provisions requiring financial institutions to<br />
guard against foreign financial institutions that permit their accounts to be used by shell banks.<br />
The competent authorities ought to take clear-cut measures to:<br />
� Prohibit financial institutions from establishing correspondent banking relations with shell banks;<br />
� Compel financial institutions to ensure that respondent foreign financial institutions do not<br />
authorize shell banks to use their accounts.<br />
3.9.3 Compliance with Recommendation 18<br />
Rating Summary of factors underlying rating<br />
No express prohibition against the establishment or operations of shell<br />
banks;<br />
R 18 NC<br />
There is no express requirement to prohibit financial institutions from<br />
entering into correspondent relationships with shell banks;<br />
There is no effective monitoring to ensure that respondent foreign<br />
institutions do not permit shell banks to use their accounts<br />
3.10 THE SUPERVISORY AND OVERSIGHT SYSTEM - COMPETENT<br />
AUTHORITIES AND SROS, ROLES, FUNCTIONS, DUTIES, POWERS (INCLUDING<br />
SANCTIONS) (R.17, 23, 25, 29, 30 &32)<br />
3.1.1 Description and Analysis<br />
Legal framework<br />
130
� BCEAO statutes annexed to the Treaty of 14 November establishing WAMU;<br />
� 24 April 1990 Convention on the establishment of the WAMU Banking Commission (BC-<br />
WAMU) and its annex;<br />
� 3 July 1996 on the establishment of the Regional Council for Public Savings and Financial<br />
Markets (CREPMF) and its annex;<br />
� Treaty on integrated organization of the insurance industry (CIMA Code);<br />
� Regulation 14/2002/CM/UEMOA of 19/9/2002 on freezing of assets and other financial<br />
resources as part of combating terrorism financing in the member-States of the West African<br />
Economic and Monetary Union (WAEMU);<br />
� Guideline 04/2007/CM/UEMOA of 4 July 2007 on combating terrorism financing in<br />
WAEMU member-States;<br />
� Regulation 00004/CIMA of 4/10/2008 on combating money laundering and terrorism<br />
financing in CIMA member-States;<br />
� Statutes of the Regional Commission on Insurance Control (CRCA);<br />
� Act 90-018 of 27 July 1990 on banking regulations;<br />
� Act 97-027 of 8 August 1997 on regulation of mutual institutions or savings and credit<br />
cooperatives;<br />
� Act 2006-14 of 31/10/2006 on combating money laundering;<br />
� WAEMU Instruction 01 /2007/RB of 2/7/2007 on money laundering within financial<br />
organizations;<br />
� WAEMU Instruction 01/2006/SP of 31 July 2006 on electronic currency issue and electronic<br />
currency institutions, pursuant to Regulation 15/2002/CM/UEOA of 19 September 2002 on<br />
payment systems in WAEMU member-States;<br />
� Decree 98/60 of 9/2/1998 pursuant to act 97-027 of 8 August 1997 on regulation of mutual<br />
institutions or savings and credit cooperatives.<br />
746. Regulation and supervision of financial institutions in Benin are based on national and supranational<br />
standards.<br />
747. Guiding the banking and microfinance sector are: Banking regulations Act 90-018 of 27 July<br />
1990, Mutual Institutions and Savings and Credit Cooperatives Act 97-027 of 8 August 1997 and<br />
regulations on their enforcement, by the Ministry of Finance, especially, and WAEMU statutes and<br />
Convention on the establishment of the Banking Commission and its annex.<br />
748. For the stock market sector, regulation and oversight are the responsibility of the Regional<br />
Council for Public Savings and Financial Markets (CREPMF), established per the WAMU Convention of<br />
24 April 1990.<br />
749. For the insurance sector, on the one hand, the Inter-African Conference of Insurance Markets<br />
(CIMA) Code lays down common rules for insurance companies, and provides instructions for its<br />
131
application; the Regional Insurance Supervision Commission (CRCA) has laid down Statutes, and on the<br />
other, the Ministry of Finance has set forth national regulations on the competences of the National<br />
Insurance Directorate.<br />
Recommendations 23<br />
Regulation and supervision of financial institutions (C.23.1)<br />
750. Article 5 of the AML Act extends the scope of application of the act, in addition to the Public<br />
Treasury and BCEAO, to the financial institutions listed in Article 1, mainly comprising banks and<br />
financial institutions, the post office financial services, the Caisse des Dépôts et Consignations, insurance<br />
and reinsurance companies, brokers, mutual savings and credit institutions, the regional stock exchange<br />
(BRVM), central depository/settlement bank, management and intermediation companies, wealth<br />
management companies and their business introducers, fixed capital investment companies and duly<br />
authorized foreign exchange dealers.<br />
Appointment of competent authorities to ensure compliance with the AML Act (C.23.3)<br />
Persons and professions<br />
subject to the act (Act<br />
2006-14, Art. 5 and 15)<br />
Public Treasury M E F<br />
Supervisory<br />
authority<br />
Regulatory and selfregulatory<br />
authorities<br />
Control Authority<br />
AML/CFT<br />
M E F M E F (I G F), IGE)<br />
Supreme Court<br />
(Chamber of<br />
Accounts),<br />
WAEMU WAEMU Council ofWAEMU<br />
Council of WAEMU Board of<br />
Ministers<br />
Ministers<br />
Directors<br />
WAEMU Inspection<br />
and Audit Department,<br />
Commissioner<br />
Controller<br />
Banks and financial<br />
institutions<br />
Post Office financial<br />
services<br />
Caisse des Dépôts et<br />
Consignations<br />
M E F (DAMF) M E F<br />
WAEMU<br />
MEF / Ministry ofM<br />
E F<br />
Communication<br />
MEF MEF<br />
WAMU Bank<br />
Commission<br />
MEF (IGF, IGE)<br />
MEF (IGF, IGE)<br />
Supreme Court<br />
(Chamber of<br />
Accounts)<br />
132
Insurance and reinsurance<br />
companies, insurance and<br />
reinsurance brokers<br />
Mutual funds or savings<br />
and credit cooperatives<br />
Institutions or<br />
organizations not<br />
established as mutual<br />
funds or cooperatives<br />
whose purpose is to<br />
collect savings and/or<br />
grant credits<br />
Regional Stock Exchange,<br />
Central<br />
depositary/Settlement<br />
Bank, management and<br />
intermediation company,<br />
wealth management<br />
company<br />
MEF (Department of<br />
Insurance)<br />
Ministry ofWAEMU<br />
Microfinance MEF<br />
Ministry ofBCEAO<br />
Microfinance MEF<br />
CIMA MEF (License issued - CRCA pursuant to<br />
by MEF upon notification CIMA (Article 16 of<br />
by CRCA<br />
the Treaty)<br />
- Department of<br />
Insurance<br />
MEF – BCEAO<br />
CREPMF CREPMF CREPMF<br />
Mutual fund CREPMF(Article 23CREPMF<br />
CREPMF<br />
of general regulations<br />
annex)<br />
Fixed capital investment<br />
companies<br />
Duly accredited manual<br />
foreign exchange dealers<br />
Business introducers for<br />
financial institutions<br />
NB: The notion of<br />
financial institution with<br />
reference to the Uniform<br />
Act includes banks and<br />
financial institutions, and<br />
insurance companies<br />
CREPMF CREPMF (license) CREPMF<br />
MEF WAEMU<br />
MEF<br />
CREPMF<br />
CIMA<br />
MEF<br />
CREPMF (license)<br />
CRCA, MEF<br />
MEF – BCEAO – CB<br />
WAMU<br />
WAEMU<br />
MEF<br />
CREPMF, CRCA,<br />
MEF (DA)<br />
751. As shown in the table above, regular control authorities are appointed to ensure compliance with<br />
AML/CFT obligations<br />
133
752. In terms of supervision, banks and financial institutions are subject to control by the WAMU<br />
Banking Commission (BC), pursuant to Article 13 of the Convention on the establishment of the BC.<br />
WAEMU also has independent supervisory powers, per paragraph 2 of the same article, which stipulates<br />
that, “The Banking Commission shall conduct or authorize the Central Bank to conduct documentary and<br />
on-site audits at banks and financial institutions to ensure compliance with all relevant provisions. On-site<br />
audits may also be conducted on the subsidiaries of banks and financial institutions, the corporate bodies<br />
that head them, de jure or de facto, and their subsidiaries. The Central Bank may also carry out audits on<br />
its own initiative and inform the Banking Commission of such audits”.<br />
753. Decentralized financial systems are under the joint supervision of the Ministry of Finance’s<br />
microfinance surveillance unit and BCEAO.<br />
754. Per its statutes, Benin’s postal system is under the dual control of the General State Inspectorate<br />
and the Supreme Court Chamber of Accounts. Act 2004-20 of 17 August 2007 on the rules of procedure<br />
for the divisions of the Supreme Court authorizes the Supreme Court Chamber of Accounts to audit “State<br />
corporations and semi-public companies or limited liability companies in which the State and local<br />
government jointly or separately hold over 50% share capital or votes in the deliberative bodies (Article<br />
154).<br />
755. In the stock exchange sector, CREPMF regulates and supervises mutual funds, the regional stock<br />
exchange, the central depositary/settlement bank, management and intermediation companies and wealth<br />
management companies and business introducers.<br />
756. Under Article 22 of the Convention, “The Regional Council shall regulate market operations per<br />
the following provisions:<br />
- Enact a specific regulation for the regional stock market<br />
- Provide general guidelines on the scope of its General Regulations...”<br />
757. Article 23 of this annex stipulates that, “The Regional Council shall control the activities of all<br />
market players, such as market management institutions and licensed traders. It shall further ensure that<br />
security issuers meet their public offering commitments. In this respect, it may, where necessary, carry out<br />
investigations among their shareholders, parent companies and subsidiaries or any legal entity or physical<br />
person that may have direct or indirect links with these market players”.<br />
758. Discussions with market players during the mission point to the fact that CREPMF had never<br />
carried out AML/CFT audit.<br />
759. Insurance institutions are under the supervision of CIMA, which is based in Libreville, Gabon.<br />
CIMA relies on the National insurance directorates to play this role. Insurance intermediaries are subject<br />
to prudential control by the National Insurance Department (DNA).<br />
760. Per Article 6 of the CIMA Treaty, the Conference’s Ministerial Council is its governing body. It<br />
sees to the achievement of the treaty’s objectives. To this end, it has adopted the single insurance<br />
legislation. In this respect, it amends and complements, through regulation, the single insurance code<br />
annexed to the Treaty. It ensures that member-States apply the single legislation and implement the<br />
obligations under the Treaty.<br />
134
761. Article 16 of the Treaty describes the Regional Commission on Insurance Supervision (CRCA) as<br />
the Conference’s regulatory body. It is responsible for auditing companies, has general oversight and<br />
assists in organizing national insurance markets.<br />
762. Article 10 of its statutes stipulates that the Commission shall carry out its assigned role under the<br />
Treaty. It shall specifically be responsible for supervision of companies and have general oversight and<br />
assist in organizing national insurance markets. To this end, it shall have a control body at the CIMA<br />
general secretariat. The national directorates “shall serve as relays for CRCA’s activities in member-<br />
States” (Annex II of the CIMA Treaty).<br />
763. Duly accredited manual foreign exchange dealers are under the control of BCEAO, in conjunction<br />
with the Ministry of Finance.<br />
764. Benin’s postal service is a fully state-owned company, and as such, is audited by its supervisory<br />
ministries, namely the Ministry of Communication and the Ministry of Economy and Finance, through<br />
their control bodies, i.e., the General Finance Inspectorate (IGF) and General State Inspectorate (IGE).<br />
651. FATF recommendations are implemented only by banks.<br />
Preventing criminals or their accomplices from taking over control of financial institutions (C.23.3)<br />
765. The regulation set by the community bodies and national authorities for the control and oversight<br />
of financial institutions provides for measures to prevent criminals or their accomplices from taking<br />
control of financial institutions or becoming their beneficiaries.<br />
Access to the banking profession<br />
766. Articles 29, 30 and 31 of the banking regulations Act sets limits to the amendment of statutes,<br />
transfers by financial institutions, lease management, etc. The Ministry in charge of finance and the<br />
Central Bank must be notified about all authorizations.<br />
767. Article 15 of the banking act bans all physical persons that have been sentenced for certain crimes<br />
and offences from heading, directing or managing a bank or financial institution or any of their agencies.<br />
768. Pursuant to Article 12 of the Convention on the establishment of the WAMU Banking<br />
Commission, licenses are granted to banks and financial institutions per decree by the Minister of Finance,<br />
following due notice from the Banking Commission. With respect to banks, Articles 7 to 13 of the<br />
banking regulations act provides for issuing of licenses to banks and financial institutions, when the<br />
institution is established for the first time in the WAMU zone. In this respect, BCEAO is responsible for<br />
processing license applications, checking the background of venture capitalists and integrity of applicants<br />
for administrative and managerial positions in credit institutions.<br />
769. These rules apply for initial establishment. For banks already established, the single license rule<br />
applies. The single license gives the duly established bank or financial institution, the right to engage in<br />
banking or financial activity in any of the WAMU member-States and freely provide the same type of<br />
services within the Union, without having to apply for new licenses.<br />
Access to the insurance profession<br />
135
770. In the insurance sector, the license documents are transmitted to CRCA by the competent DNA,<br />
which issues a notice (Title II, chapter 1, section 1 of the insurance code). This due notice determines the<br />
issue of the license by the Minister of Finance of Benin. Capital distribution, the quality and integrity of<br />
company directors (criminal conviction exists) are some of the features considered in this process.<br />
Shareholding requires special attention at the time of license application and any time there is a significant<br />
change in the capital or voting rights. Per Article 329-7, any move to increase the equity capital by over<br />
20% or majority vote should be approved by the Minister responsible for insurance, following due notice<br />
by CRCA.<br />
Access to the profession in the microfinance sector<br />
771. Article 9 of the PARMEC Act requires savings collection or credit institutions or bodies to obtain<br />
a license from the Minister of Finance, per modalities set by decree. Decree 98/60 of 9 February 1998<br />
implementing this act sets forth the licensing procedures, recognition or signing of conventions for nonmutual<br />
institutions.<br />
772. The country is currently in the process of adopting a uniform bill on the new regulation for<br />
decentralized financial systems.<br />
Access to the regional financial market<br />
773. There should be distinction between the market institutions (regional stock exchange and the<br />
central depositary/settlement bank) and traders (SGI, SGP, CIB, AA, etc.).<br />
774. For the market institutions, the company established to carry out regional stock exchange<br />
activities within WAMU must submit an application to CREPMF for a license. The application must<br />
comprise: (i) the statutes of the applicant; (ii) equity distribution and identity of shareholders; (iii) the<br />
General Regulation applied to stock brokers; (iv) and any other information that the Regional Council may<br />
deem necessary. This requirement also applies to the company established to carry out central<br />
depositary/settlement bank activities.<br />
775. There are equally requirements for traders (SGI and SGP mainly). Article 27 of the General<br />
Regulation stipulates that “companies applying for licenses must present sufficient guarantees, especially<br />
regarding the composition and amount of their capital, their organization, human, technical and financial<br />
resources, the integrity and experience of their managers, and arrangements for ensuring security of<br />
customer operations. Article 32, for its part, excludes individuals who have been sentenced for<br />
falsification, swindling, embezzlement of public funds, violation of banking and legislation, changes etc.).<br />
Access to the authorized manual foreign exchange dealer trade<br />
776. For manual foreign exchange dealers, manual licenses are issued by MEF decree, following<br />
notification by BCEAO. Per BCEAO guideline 11/05/RC, authorizations issued shall only be valid upon<br />
the start of activities of the beneficiary within a period not exceeding one year from the date of<br />
notification of the said decree. License documents are processed by BCEAO, which exercises control<br />
over the criminal record of the license applicant. BCEAO issues a certified notification and transmits it to<br />
MEF, which issues the license authorization. Foreign exchange dealers must declare the volume of their<br />
transactions to BCEAO. They must observe the provisions of Regulation 09/98/CM/WAMU on the<br />
financial transactions outside the Union area, especially the ceiling for foreign exchange allocations for<br />
resident travellers.<br />
136
777. It is difficult to grasp the ability and integrity of operators in the microfinance and manual foreign<br />
exchange sector, because most of them are in the informal sector (for instance, only 50 of the 180<br />
decentralized financial companies are licensed).<br />
Applying prudential regulations for AML/CFT (C. 23.4)<br />
778. Many financial institutions lack clearly defined AML/CFT guidelines, and therefore do not have<br />
prudential regulations for AML/CFT.<br />
779. As a general rule, prudential regulation and oversight measures are applied to financial<br />
institutions; these include prior authorization or license. However, these prudential measures are not<br />
expressly applied for money laundering and financing of terrorism.<br />
780. Prudential measures are applied to only banks and financial institutions, whose management<br />
process come under scrutiny in order to detect, measure and control significant risks. However, it is not<br />
clear whether the prudential standards for these processes are equally applicable to anti-money laundering<br />
and terrorism financing.<br />
781. The Banking Commission’s Circular 10-2000 of 23 June 2000 on reorganization of internal audit<br />
of credit institutions stipulates that WAMU banks and financial institutions must have an efficient internal<br />
audit system, tailored to their organization and to the nature and volume of their activities as well as to the<br />
risks they are exposed to. This control measure could serve circumstantially for AML.<br />
782. Ultimately, it is up to the control authorities to formulate an internal control policy and see to the<br />
introduction of an appropriate mechanism to detect, measure, oversee and control AML/CFT risks as well<br />
as all other risks faced by the institution, and assess the outcomes.<br />
Prior authorization or registration of money or securities transmission and foreign exchange<br />
services (C.23.5)<br />
See RS.VI<br />
Monitoring and control of money transmission and foreign exchange services (C.23.6)<br />
See RS.VI<br />
Prior authorization or registration and control of other financial institutions (C.23.7)<br />
783. Financial institutions other than banks, insurance companies, collective investment schemes,<br />
market intermediaries and decentralized financial institutions are also subject to prior authorization and<br />
supervision; however, the AML oversight conditions applicable to them are inadequate, if not inexistent.<br />
Effectiveness<br />
784. No implementation: There is no AML surveillance for microfinance institutions, insurance<br />
companies and the financial market. Except for banks, there is no prudential regulation applicable to<br />
AML/CFT.<br />
Monitoring and control are unsatisfactory, as are money transmission services and authorized manual<br />
foreign exchange dealers.<br />
137
Recommendation 25 – Guidelines for financial institutions on issues other than suspicious<br />
transaction reports<br />
Guidelines for financial institutions (C. 25.1)<br />
785. Per Act 2006-14, Article 13, audit authorities may, in their respective areas of competence, state<br />
the content and modalities for implementing anti-money laundering programmes.<br />
786. In this respect, in 2007, BCEAO issued a guideline for banks and financial institutions, postal<br />
financial services, deposit and consignment offices, or institutions that operate as such, microfinance<br />
institutions and manual authorized foreign exchange dealers. However, this instruction only concerns<br />
operations likely to raise suspicions and the measures to be taken to apply the provisions of the act on<br />
AML mechanisms. It calls on the institutions concerned to set up an anti-money laundering unit and<br />
submit an annual report1 to BCEAO and the WAMU Banking Commission on the implementation of the<br />
entire AML system.<br />
787. The applicability of the BCEAO Guideline to government institutions such as the Caisse<br />
Autonome d’Amortissement (clearing house) and Postal Service does not appear to be emphatic from the<br />
legal standpoint, as the activities of these bodies do not fall within the Central Bank’s remit.<br />
788. No circular or letter on AML has been sent to clarify certain points of the BCEAO Instruction, to<br />
help harmonize the AML/CFT measures to be taken within financial agencies.<br />
789. Apart from the banks, most of these institutions have not been complying with this Instruction.<br />
Indeed, the Instruction does not expressly address currency transfer services, which are subject to<br />
regulation by their parent companies.<br />
790. CIMA, for its part, instituted Regulation 00004/CIMA of 4/10/2008, which sets forth the<br />
guidelines for insurance and reinsurance companies and brokers. Instituted in the form of a community<br />
regulation, and therefore having a higher legal force than the act (and more so than the BCEAO<br />
Guideline), this regulation seems to be more complete and replete with details on registration and<br />
archiving procedures, computerized operational, vigilance toward customers and unusual operations (see<br />
developments made on this in several earlier paragraphs).<br />
791. An Instruction was issued for the stock market sector on 23 November 2009, nearly five months<br />
after the mission’s visit. It draws heavily on that of BCEAO, with nearly the same obligations for<br />
financial market stakeholders to set up an internal AML mechanism. Quite clearly, this text did not affect<br />
the rating made for this Recommendation.<br />
1<br />
According to Article. 17, this report should: • describe the organization and means of establishment in the prevention and control of money<br />
laundering; report on training and information activities conducted during the year; • list the controls made to ensure efficient implementation and<br />
compliance with the obligations on client identification, data conservation, detection and declaration of suspicious transactions; • highlight the<br />
results of the investigations, particularly concerning the weaknesses identified in the procedures and their compliance, as well as statistics on the<br />
implementation of the suspicion declaration system; • indicate, eventually, the nature of the data transmitted to third-party institutions, including<br />
those established outside the country; • map out the most frequent suspicious activities, indicating eventually the nature and form of the changes<br />
observed, in the area of money laundering; finally • present the prospects and action programme for the coming period.<br />
138
792. CENTIF informed the mission that it had raised awareness among all the institutions concerned<br />
and AML stakeholders about the need to institute guidelines to assist financial institutions in knowing and<br />
implementing their AML/CFT obligations.<br />
Recommendations 29<br />
C.29.1 Competent authorities, their powers and resources (C.29.1)<br />
In the banking sector<br />
793. Pursuant to Article 13 of the Convention on the establishment of the WAMU Banking<br />
Commission, the commission shall authorize the Central Bank to undertake on-site and documentary<br />
audits of banks and financial institutions, to ensure compliance with relevant provisions on AML.<br />
794. Article 14 adds that “Administrative and judicial authorities of WAMU member-States shall<br />
provide assistance for the inspections carried out under Article 13.<br />
795. Article 18 of the Convention stipulates the non-applicability of bank confidentiality toward the<br />
Banking Commission. This is stipulated in Article 42 of the banking act, which prohibits credit<br />
establishments from resisting its inspections (Article 46 of the act).<br />
796. The Central Bank may also carry out controls on its own initiative. It shall notify the Banking<br />
Commission of on-site audits (Article in the convention). Article 24 of the Bank’s statutes gives BCEAO<br />
the right to communicate all the documents needed to carry out its operations. It may further enter into<br />
direct contact with companies and professional bodies to carry out the necessary investigations on its own<br />
behalf or on behalf of the Council of Ministers. In this regard, BCEAO may very well use such powers<br />
when examining an application for license by a credit institution, to check the origin of the funds making<br />
up the equity capital.<br />
797. Per the banking act, professional secrecy may not be applied to BCEAO (Article 42) and credit<br />
institutions may not oppose its investigations (Article 46).<br />
798. It appears that both the Banking Commission and BCEAO have the necessary powers to carry out<br />
investigations and oversight of the financial institutions within their jurisdiction.<br />
799. According to its annual report, the Banking Commission has conducted a total of 42 on-site<br />
inspections, i.e., the same number as the previous year’s. In terms of AML/CFT, the report states that “the<br />
legal framework has been adopted and CENTIFs are gradually being set up in the whole country. The<br />
institutions have been gradually preparing the framework required for vigilance, but the measures being<br />
taken need to be enhanced. Most institutions need to computerize procedures for detecting suspicious<br />
operations”.<br />
800. Information gathered by the assessors at meetings and in consulting the investigation reports<br />
confirms these assessments made by the Banking Commission in its report. The assessors further found<br />
out that the content of the inspection reports was often wanting in AML/CFT aspects.<br />
In the microfinance sector<br />
139
801. The Control and Surveillance Unit for Decentralised Financial Systems (CSSFD), BCEAO and<br />
the Banking Commission (for apex institutions with financial institution status) are authorised to control<br />
and ensure that the microfinance institutions meet their AML/CFT obligations.<br />
802. For the Benin Postal Service, apart from the Supreme Court Chamber of Accounts, mentioned<br />
earlier, the General State Inspectorate has powers to ensure compliance with requirements.<br />
In the insurance sector<br />
803. Per the CIMA Code, the Regional Insurance Supervision Commission (CRCA or the<br />
Commission) carries out documentary and on-site audits of insurance and reinsurance companies<br />
operating in member-States. The investigative body set up at the Conference’s General Secretariat is used<br />
for this investigation; and any useful findings for the investigations carried out by the National Insurance<br />
Directorate, in its capacity as general market overseer, are communicated to it. On-site investigations may<br />
be extended to parent companies and subsidiaries of the companies under investigation, and to any<br />
intermediary or technical expert, under terms stipulated by the single insurance legislation (Article 17).<br />
804. Whenever the Commission observes lack of compliance with insurance regulations or behaviour<br />
that undermines the execution of commitments made to the insured, it enjoins the company concerned to<br />
take corrective measures. Failure to take corrective measures within the prescribed period shall lead to the<br />
sanctions as stated in paragraph c. below.<br />
In the stock market sector<br />
805. For documentary control, the Regional Council is authorized to request regular information; and<br />
prescribes the kind of information required and the terms for its transmission. It decides the accounting<br />
provisions applicable to market stakeholders. The Regional Council may also call in and listen to any one<br />
likely furnish it with information. (Article 25 of the annex).<br />
Powers to carry out inspections (C.29.2)<br />
In the banking sector<br />
806. As shown above, Article 13 of the Convention on the establishment of the WAMU Banking<br />
Commission gives it the power to authorize the Central Bank to carry out on-site and documentary<br />
investigations to ensure compliance with the relevant AML provisions.<br />
807. The Banking Act prohibits credit institutions from resisting investigations by the Banking<br />
Commission and BCEAO (Article 46 of the act).<br />
808. On-site investigations organized by the BC, based on a duly approved annual programme (ad hoc<br />
investigations are carried out when needed), owing to the need to carry out regular assessments of the<br />
financial institutions concerned, may be extended to the subsidiaries of banks and financial institutions, as<br />
well as to the legal entities that head them de jure or de facto, and their subsidiaries.<br />
140
The investigations made are general or targeted.<br />
809. The 2008 BC report states that these investigations help to assess anti-money laundering and<br />
terrorism financing, as well as check the veracity of the documents and information submitted,<br />
compliance with prudential regulation, in particular, the management quality, efficiency of internal<br />
investigations and risk management.<br />
Effectiveness<br />
810. Seven (7) banks were inspected in 2008 by the WAMU Banking Commission. The<br />
recommendations made by the missions mainly had to do with corporate governance, business strategy<br />
and plan, information system and accounting, the portfolio quality and risk management, the financial<br />
situation and prudential ratios.<br />
811. Meetings held by the mission with the credit institutions point to the fact that the BC inspections<br />
cycle was averagely biennial. However, one financial institution established following a merger said that<br />
it had not been inspected since 2006.<br />
812. On the other hand, one bank said that it underwent on-site investigation in 2007 and 2008. It<br />
seems that this situation occurred because the bank was undergoing close monitoring.<br />
813. Inspection reports consulted showed only feeble attempts at addressing AML/FT issues.<br />
In the microfinance sector<br />
814. Article 66 of the PARMEC (Projet d’appui a la reglementation sur les mutuelles d’epargne et de<br />
credit) Act stipulates that “The Minister may inspect or authorize the inspection of institutions”. Article<br />
67 of the same Act stipulates that “The Central Bank and Banking Commission may, on their own<br />
initiative, or at the request of the Minister, conduct on-site inspections of financial institutions and all<br />
companies under their control.<br />
Effectiveness<br />
815. Documents submitted to the mission by the CSSFB coordinator state that about 68 on-site<br />
inspections have been carried out jointly by BCEAO and the monitoring unit.<br />
816. The largest microfinance institution (in terms of credit volume (CFAF 14.3 billion) met informed<br />
the mission that it had undergone inspection by a joint BCEAO/CSSFD mission in March 2009.<br />
However, the on-site investigations carried out do not cover the area of AML/CFT.<br />
817. For the postal service, the mission could not obtain any information on the content and periods of<br />
the investigations made; however, information gathered on the ground did not show compliance with the<br />
AML Act.<br />
In the insurance sector<br />
141
818. For insurance, the CRCA inspectors exercise control over the market of member countries, and<br />
the national insurance directorates act as the Commission’s relays in member-States.<br />
Effectiveness<br />
819. Three insurance companies underwent on-site investigation by CRCA in 2008. Based on the<br />
reports produced, these investigations do not cover the area of AML/CFT.<br />
In the stock market sector<br />
820. Article 56 of the General Regulations stipulates that “The Regional Council shall carry out<br />
documentary and on-site investigations among management or intermediary companies”. Furthermore,<br />
“the Regional Council has inspectors whose scope of competence extend to all stakeholders who make a<br />
public call for savings or who intervene on the basis of authorization issued by the Regional Council”<br />
(Article 24 of the annex to the General Regulations).<br />
Effectiveness<br />
821. In its 2008 Annual Report, the Regional Council stated that it had carried out an investigation<br />
mission on the BRVM and DC/BR. This was the fourth investigation carried out since their license.<br />
822. According to the report, the Council had conducted on-site investigations on 17 institutions,<br />
compared to 22 in 2007. The investigations were carried out on eight management and intermediation<br />
companies (SGIs), two undertakings for collective investment in transferable securities (UCITS), two<br />
mutual investment funds, one unit trust company, two business introducers, and the two central bodies<br />
(BRVM and DC/BR). On the other hand, the only licensed SGP was not investigated in 2008.<br />
823. Of the four (4) SGIs operating in Benin, the ACTIBOURS company was subjected to an on-site<br />
control in November 2008.<br />
It should be noted that all the investigations made do not cover AML/CFT.<br />
Powers to have access to relevant documents (C.29.3)<br />
In the banking sector<br />
824. Upon the request of the Banking Commission, banks and financial institutions must provide all<br />
documents, information, clarifications and justification needed to carry out their role (Article 16 of the<br />
annex to the Convention establishing the BC). Article 17 states that the auditors of a bank or financial<br />
institution are required to send to it, upon request, all the reports needed to carry out its work. Article 18<br />
states that banking secrecy of the BC cannot be invoked.<br />
825. Article 42 of the banking act also has this provision, which states that “the professional secrecy of<br />
the Banking Commission or BCEAO…” cannot be invoked.<br />
142
826. Article 17 of the BCEAO AML Guideline stipulates that “as part of the investigations set out in<br />
Article 46 of the act on banking regulation, banks and financial institutions must be able to produce all<br />
information needed for assessing their anti-money laundering mechanism. To this end, written procedures<br />
and internal documentation should be made available in French”.<br />
In the microfinance sector<br />
827. Article 68 of the PARMEC Act stipulates that in their oversight role of the financial system, the<br />
professional secrecy of the Minister, Central Bank or the Banking Commission cannot be invoked.<br />
In the stock market sector<br />
828. For on-site investigations, the Regional Council is entitled to request the production of regular<br />
information, of which it shall set the content and terms of transmission (Article 25 of the annex to the<br />
General Regulation).<br />
829. Moreover, the inspectors, or any other person authorized by the Regional Council to conduct<br />
investigations, has the right to request information, and copies thereof, in whatever form, in line with<br />
national legislation. The professional secrecy of persons commissioned by the Regional Council shall not<br />
be invoked (Article 39 of the annex to the General Regulation).<br />
In the insurance sector<br />
830. Article 13 of the CRCA Statutes stipulates that “The Commission may request from the auditors<br />
of an insurance company, any information pertaining to the activities of the institution under investigation.<br />
Professional secrecy may, therefore, not be invoked against the auditors. Professional secrecy or<br />
confidentiality of documents may not be invoked against the Commission or an insurance auditor sent to<br />
audit the insurance company”.<br />
Powers not predicated on need for court order (C.29.3.1)<br />
831. The supervisor’s power to compel production or to obtain access for supervisory purposes should<br />
not be predicated on the need to require a court order.<br />
Adequate powers of enforcement and sanction against financial institutions and their directors<br />
(C.29.4)<br />
832. In the banking sector, Article 34 of the AML Act stipulates that when, as a result of either a<br />
serious lack of vigilance or flaws in the organization of its internal control procedures, a person liable to<br />
the act disregards the preventive obligations instituted by the said act (failure to identify the client, for<br />
instance), the control authority, which has disciplinary action, may systematically take action as stipulated<br />
by act and prevailing regulations.<br />
833. The WAMU Banking Council has powers to take disciplinary action against credit institutions<br />
that have violated the rules, depending on the seriousness of the offence.<br />
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834. In the microfinance sector, the PARMEC Act provides for disciplinary action, a fine or<br />
punishment, as the case may be (Article 30). Depending on the seriousness of the offence, the Public<br />
Prosecutor may take disciplinary action, ranging from a warning to the withdrawal of license, and may<br />
include suspension or outright dismissal of the directors (Article 74).<br />
835. The Banking Commission institutes disciplinary action against financial institutions (Article 75).<br />
836. Disciplinary action shall be taken without prejudice to criminal sanctions, and the Public<br />
Prosecutor shall prosecute, upon referral by the Minister or at the request of BCEAO or the Banking<br />
Commission, in the event of offences committed by financial institutions (Articles 77 and 80).<br />
837. For the Postal Service, apart from the Supreme Court Chamber of Accounts’ administrative<br />
powers to impose financial sanctions (penalties for delay, failure to respond, management in deed, or lack<br />
thereof), it may refer to the competent jurisdictions, acts likely to lead to prosecution. The Principal State<br />
Prosecutor of the Supreme Court shall request the Public Prosecutor’s Office of the competent jurisdiction<br />
to initiate criminal proceedings (Article 161) of the 2007 Act on the Supreme Court rules of procedure.<br />
838. For the insurance sector, Article 15 of the CRCA Statutes stipulates that should a company under<br />
investigation violate an insurance regulation, the Commission shall take disciplinary action ranging from a<br />
reprimand to withdrawal of license, as well as suspension or outright resignation of its managers,<br />
depending on the seriousness of the offence.<br />
839. The Commission may further impose a fine and call for outright transfer of the portfolio of<br />
contracts.<br />
840. In the stock market sector, CREMPF has powers to impose financial, administrative or<br />
disciplinary sanctions, as appropriate, against any action, omission or devices contrary to the general<br />
interest of the financial market and its proper functioning, and/or that may be harmful to the rights of<br />
investors, depending on the merits of the case, without prejudice to any judicial sanctions that may be<br />
levelled against the liable parties, in a legal action for redress, lodged individually by the injured parties<br />
(Article 30 of the annex to the General Regulation).<br />
841. Furthermore, should the Regional Council observe any infringement on the equal investor<br />
information and treatment and violation of the rules governing the proper functioning of the financial<br />
market, the council may directly bring the matter before the courts of the countries where such offences<br />
are taking place or in countries where undue advantage of the situation is being taken, where appropriate,<br />
for the purposes of prosecution and sentence (Article 40 of the annex to the General Regulations).<br />
Recommendation 17<br />
Existence of effective, proportionate and dissuasive criminal, civil or administrative sanctions<br />
(C.17.1)<br />
842. Articles 35 to 45 of the AML Act set out administrative, disciplinary and, especially penal<br />
measures, in the event of failure to comply with AML/CFT provisions. However, there are no known<br />
cases to help assess the efficiency of these measures.<br />
843. Article 23 of the Convention on the establishment of the WAMU BC, Articles 47 and 48 of the<br />
Banking Act, Article 35 of the AML Act all set forth a host of sanctions that include withdrawal of license<br />
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of legal entities and individuals targeted by the FATF Recommendations, who do not comply with<br />
AML/CFT regulations.<br />
844. These sanctions may range from reprimand to withdrawal of license, and may also include<br />
suspension or outright removal of the managers (Article 23 of the Convention on the establishment of the<br />
Banking Commission) with no prejudice to any financial and/or penal sanctions imposed. However, the<br />
decision to appoint an interim director or a liquidator rests with the Minister of Finance, on the proposal of<br />
the BC.<br />
C.17.2 Countries should designate an authority empowered to apply these sanctions<br />
845. Pursuant to Article 35 of the AML Act, control authorities with disciplinary powers, may<br />
automatically take action as stipulated by specific legislation and regulations in force. In this regard, as<br />
stated earlier, the administrative and disciplinary sanctions stipulated by the specific regulations shall be<br />
taken automatically by the control authorities (upon notifying the Principal State Prosecutor, per Article<br />
35 of the AML Act) or referring the matter to same, in the event of a suit against a financial institution<br />
(Article 42 of the AML Act).<br />
Imposing sanctions on directors (C.17.3)<br />
846. Article 40 of the AML Act provides for penalties against persons and directors or the employees<br />
of individuals or corporate bodies subject to the Act. These sanctions range from imprisonment (six<br />
months to two years) to fines (CFA 50,000 to CFA 750,000) depending on the seriousness of the offence<br />
and/or existence of the intentional element. Additional penalties to restrict movement and exercising civic,<br />
family civil and professional rights may also be imposed, per Article 41 of the Act.<br />
Effectiveness<br />
847. It is important to point out that, to date, no sanctions have been imposed, making it difficult to<br />
assess their dissuasive effects.<br />
Broad and proportionate range of sanctions (C.17.4)<br />
848. A broad range of sanctions is available; these include administrative and disciplinary sanctions<br />
(Article 35 of the AML/CFT Act), interim measures (Article 36 of the AML/CFT act), penalties including<br />
compulsory confiscation of proceeds from money laundering activities (Articles 37, 38, 39, 40, 41 and 42<br />
of the AML/CFT act).<br />
849. However, it is difficult to assess the proportionality to the seriousness of the offence and the<br />
dissuasiveness of the sanctions, as AML penalties are not applied.<br />
Recommendation 30 – Investigative bodies, resources, standards and confidentiality<br />
Autonomy of investigative bodies and adequate resources allocated to them (C.30.1)<br />
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850. Generally, the regional investigative bodies (BC, BCEAO, CREPMF, CRCA) enjoy autonomy in<br />
the exercise of their investigative functions. However, they are under-resourced, especially in terms of<br />
human resources, and cannot carry out their functions efficiently. That is why the number of controls<br />
conducted cannot keep pace with the number of institutions to be investigated.<br />
851. According to its 2008 Annual Report, the Banking Commission has a staff of 22 senior officers<br />
(compared to 18 in 2007) to carry out on-site investigations on 116 credit institutions (97 banks and 19<br />
financial institutions) operating as at 31 December 2008. The ratio is thus 1 worker to 5 institutions.<br />
852. Documentary control is carried out by a staff of 25 (compared to 19 in 2007), including 22 senior<br />
officers.<br />
853. The mission was unable to obtain figures on the human and financial resources used by BCEAO<br />
to carry out investigations on banks, financial institutions, microfinance institutions and manual licensed<br />
foreign exchange dealers.<br />
854. For the CRCA, based in Yaounde, Cameroon, the mission could not obtain information on its<br />
supervisory activities.<br />
855. CREPMF has a staff of only three from the Market Control and Surveillance Directorate.<br />
Recruitments are planned to increase the workforce.<br />
856. With regard to national investigative bodies, the Control and Surveillance Unit for Decentralised<br />
Financial Systems (CSSFD) for instance, has some thirty workers, including 19 senior staff. The mission<br />
was unable to obtain information on the number of staff assigned to investigations. Information obtained<br />
on the ground indicated that there was shortage of human resources, including at the DNA.<br />
857. The mission was unable to obtain precise information on the resources of the Audit Office of the<br />
Chamber of Accounts, to carry out investigations on Benin’s postal service.<br />
C.30.2 Integrity and competence of staff of control authorities<br />
858. Article 6 of the annex to the Convention on the establishment of the WAMU BC stipulates that its<br />
members and all persons contributing to its operations shall be held to professional secrecy. To avoid<br />
conflicts of interests, these members may not perform any paid or unpaid work in a bank or financial<br />
institution, or receive remuneration directly or indirectly from a bank or financial institution.<br />
859. Article 47 of the BCEAO statutes stipulates that the Governor, Vice-Governor and all workers of<br />
the BC shall be held to professional secrecy, or face the full rigours of the law.<br />
860. With regard to the Regional Insurance Supervision Commission, Article 25 stipulates that the<br />
members of the Commission and persons on the commission without the right to vote shall be held to<br />
professional secrecy. Likewise, professional secrecy shall be binding on all public service workers.<br />
861. However, there are no specific provisions requiring members of CREMPF and national control<br />
authorities to demonstrate integrity and appropriate skills.<br />
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C.30.3 Training of staff of competent authorities<br />
862. There is no provision in legislation governing oversight authorities such as BCEAO, the Banking<br />
Commission or WAMU, compelling them to train their staff on AML. However, an annual training<br />
programme has been introduced for BC staff. BCEAO, for its part, said it had participated in AML/CFT<br />
training at both the national and international levels.<br />
863. In its 2008 annual report, the BC reported on workshops and meetings in which its workers<br />
participated; however, none of these seemed to have addressed AML/CFT.<br />
864. At the meetings, the President of the Chamber of Accounts, who also oversees Benin’s postal<br />
service, said that in 2006, he participated in an AML/CFT workshop organized by the World Bank, and in<br />
2007, a similar workshop organized by the Association des Juridictions Francophones.<br />
865. BCEAO and CENTIF have also organized some sensitization and training workshops on<br />
AML/CFT; and CSSFD said that it had sent its staff to these workshops.<br />
866. However, all these training and sensitization activities are inadequate to provide thorough<br />
knowledge about AML/CFT obligations or even enhance its level of practice.<br />
Analysis of effectiveness<br />
867. Meetings with market stakeholders met during the mission point to the fact that CREPMF had<br />
conducted no on-site investigations or imposed any sanctions.<br />
3.10.2 Recommendations and Comments<br />
868. Nearly all financial institutions are regulated, the oversight authorities appointed and preventive<br />
measures taken against criminals or their accomplices. However, no arrangements have been made for<br />
AML/CFT. Likewise, there are no official guidelines on AML/CFT in all financial institutions, and many<br />
of them lack prudential regulations.<br />
869. All in all, regional competent authorities like the BC, BCEAO and CRCA have autonomy in terms<br />
of their control powers, but lack training facilities.<br />
870. The competent authorities with disciplinary powers have a broad range of sanctions; however, it is<br />
difficult to assess the proportionality and seriousness of the offence, since sanctions are not applied.<br />
The mission’s recommendations are as follows:<br />
871. The oversight authorities (WAMU BC, BCEAO, CIMA CREPMF and the Ministry of Finance)<br />
should tighten control over financial institutions to ensure that they meet their obligations under<br />
community and national AML acts.<br />
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872. AML-related sanctions should be applied in all sectors targeted under legislation.<br />
873. The supervisory authorities ought to undertake sensitization campaigns for the immediate<br />
institution of guidelines in all financial institutions and ensure their implementation. To this end, the<br />
Regional Council should adopt a sectoral AML guideline for all financial market stakeholders.<br />
874. The supervisory authorities should receive more human resources to ensure their autonomy and<br />
enable them to cope with the additional responsibility of integrating anti-money laundering into their<br />
activities.<br />
875. BCEAO and national authorities should carry out sensitization campaigns among their Western<br />
Union intermediaries to be more stringent in client identification.<br />
3.10.3 Compliance with Recommendations 17, 23, 25, 29<br />
Compliance<br />
rating<br />
Summary of Factors Underlying Ratings<br />
No administrative, disciplinary or penal sanctions have been taken since<br />
the act came into effect;<br />
It is impossible to assess the dissuasiveness of the sanctions, since they<br />
R 17 PC are not applied;<br />
Failure to impose financial sanctions on credit institutions make<br />
assessment of proportionality of sanctions difficult<br />
R 23<br />
PC<br />
R 25.1 PC<br />
Lack of efficient AML monitoring for microfinance, insurance and the<br />
financial market;<br />
Except for banks, no AML/CFT prudential regulations for insurance<br />
companies and UCITS. Fund transfer services do not have licenses as<br />
such.<br />
Unsatisfactory monitoring and control of fund transfer services and<br />
licensed foreign exchange dealers;<br />
Control of aptitude and morality criteria of managers is difficult to grasp<br />
in the case of monetary and financial institutions and licensed manual<br />
foreign exchange dealers, because of the large number of people in the<br />
informal sector;<br />
Lack of implementation<br />
Incomplete existing guidelines and no guidelines for certain institutions<br />
Unauthorized or even no application of existing guidelines<br />
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R 29 PC<br />
AML controls carried out by WAMU BC in banks and financial<br />
institutions are inadequate (one investigation on average, every two<br />
years) and not thorough<br />
DFS monitoring is flawed and does not focus on compliance with AML<br />
standards;<br />
Controls carried out by CREPMF do not have any AML component;<br />
There are doubts on controls of postal services, where they exist;<br />
Controls of insurance companies do not take AML into account.<br />
3.11 MONEY OR VALUE TRANSFER SERVICES (RS.VI)<br />
3.11.1 Description and Analysis<br />
876. Per the regulations in force in Benin, money or value transfer (MVT) operations can only be<br />
carried out by licensed intermediaries (such as banks and the postal financial services).<br />
877. In practice, these intermediaries (grantors) grant their license to professional money transfer<br />
institutions like Western Union, MoneyGram and Money Express, microfinance institutions and<br />
individuals (grantees), who do not have direct licenses to carry out such operations. The licensed<br />
intermediaries sign contracts with these entities or individuals. Market entry thus, is through this means.<br />
878. These contracts are not subject to prior authorization by the competent authorities at the national<br />
or community levels.<br />
879. However, the grantees are subject to the same obligation for vigilance as the grantor<br />
intermediaries. The grantees thus enter into the circle of persons involved in the AML process, even if the<br />
AML Act does not target them directly. In any case, the ultimate responsibility for all operations carried<br />
out lies with the grantor intermediaries.<br />
880. Money and value transfer activities have developed rapidly in Benin, with many informal sector<br />
stakeholders dealing in MVT.<br />
881. The assessors were informed that Benin has no representatives of major money transfer<br />
institutions like Western Union, Money Gram and Money Express and they were therefore unable to meet<br />
any of their managers. However, the operators that deal with these major institutions have AML/CFT<br />
procedure manuals.<br />
Designation of competent authorities to register and/or license natural and legal persons that<br />
perform money or value transfer services (MVT service operators) (C VI.1)<br />
882. No authority has been designated to register and/or license or register MVT service operators in<br />
Benin<br />
Subjection to the FATF 40 Recommendations and the 9 FATF Special Recommendations (VI.2)<br />
883. Money and value transfer services are indirectly subject to the FATF 40 Recommendations and<br />
nine special Recommendations by virtue of how they are run domestically in Benin.<br />
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Control of Money and Value Transfer (C.VI.3)<br />
884. The grantor financial intermediaries (especially banks) say that they only conduct a posteriori<br />
control over the activities of money and value transfer operators. This control does not cover compliance<br />
with the 40+9 FAFT Recommendations. For instance, since they are not in contact with the customers,<br />
they cannot check their identity.<br />
885. The grantor supervisory institutions (BCEAO and the Banking Commission) also do not check<br />
whether these grantors carry out AML/CFT compliance investigations among MVT operators. This<br />
means that the operators completely escape AML/CFT monitoring.<br />
886. However, the national directorate of BCEAO sent a circular dated 29 November 2007, to banks<br />
operating in the country, ordering them to comply with “standard security regulations” on rapid money<br />
transfer. No mention was made of AML regulations. BCEAO further pointed out that the banks were the<br />
sole institutions authorized to carry out money transfers.<br />
Maintaining a current list of MVT agents (C.VI.4)<br />
887. There is no regulation for bank supervisors to maintain a list of money transfer institutions or<br />
MVT agents.<br />
888. However, banks transmit reports of all money transfer operations carried out by themselves and<br />
even their agencies to BCEAO.<br />
Sanctions (application of R17.1 to 17.4) (VI.5)<br />
889. There is no provision for grantor intermediaries to have powers to impose sanctions on MVT<br />
service providers.<br />
890. Supervisory bodies have never imposed sanctions on grantor intermediaries for failure of MVT<br />
operators to apply the AML Act.<br />
Additional elements: Implementing measures set out in the Best International Practices (CVI.6)<br />
891. The measures set out in the international Best Practices paper have not been implemented.<br />
3.11.2 Recommendations and Comments<br />
892. Benin’s authorities should:<br />
� Take measures to regulate “delegation” of MVT licenses by licensed intermediaries, by requiring<br />
prior authorization (or license) from competent authorities like BCEAO and MEF, to operate.<br />
� Require banks to introduce control mechanisms for the activities of these entities by focusing on<br />
AML obligations.<br />
List all stakeholders operating in the sector informally and invite them to regularize their status or cease<br />
activity altogether, or else face the full rigours of the law.<br />
3.11.3 Compliance with Special Recommendation VI<br />
Rating Summary of factors underlying rating<br />
150
RS VI NC<br />
No authorization to practise the profession<br />
No direct submission to AML Act<br />
No control mechanisms<br />
No list of MVT agents<br />
No sanctions;<br />
4. PREVENTIVE MEASURES – DESIGNATED NON-FINANCIAL<br />
BUSINESSES AND PROFESSIONS<br />
4.1 CUSTOMER DUE DILIGENCE AND RECORD KEEPING (R.12) (APPLYING<br />
R.5, 6, AND 8 TO 11)<br />
4.1.1 DESCRIPTION AND ANALYSIS<br />
Legal framework<br />
� -AML Act<br />
� -Inter-ministerial Decree 078/MISATMF/MCAT/DC/DAI on the opening of casinos in the<br />
Republic of Benin<br />
� -Decree 99-442 of 17 September 1999 setting conditions for the practice of the profession of<br />
housing developer in Benin<br />
� -Decree 85-500 of 29 November 1985 on the regulation of travel agencies in the Peoples’<br />
Republic of Benin<br />
� -Decree 96-345 of 23 August 1996 regulating tourism offices in the Republic of Benin<br />
� 1973 Order governing the trade and export of gold and precious stones<br />
� -Act 65-6 of 20 April 1965 instituting the Bar of the Republic of Benin.<br />
� -Act 2002-015 of 30 April 2002 on the status of notaries in the Republic of Benin<br />
� -Act 2004-033 of 27 April 2006 on the establishment of the association of Chartered<br />
Accountants and Licensed Accountants in the Republic of Benin (OECCA-Benin).<br />
893. Article 5 of the AML Act expressly compels, but not in a limited way, the following DNFBPs to<br />
prevent and detect money laundering activities:<br />
i. Members of independent legal professions;<br />
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ii. Business introducers for financial institutions<br />
iii. Auditors<br />
iv. Real Estate Agents<br />
v. Dealers in high value items like artefacts, precious stones and metals<br />
vi. Money couriers<br />
vii. Owners, directors and managers of casinos and gaming establishments, including national<br />
lotteries<br />
viii. Travel agencies<br />
ix. Non-governmental organizations<br />
894. First, this list does not cover DNFBPs as far as FAFT is concerned; chartered accountants, for<br />
instance, are not listed (auditors are, though); and secondly, the list goes beyond the FAFT list to cover<br />
travel agencies, money couriers, artefact dealers and NGOs.<br />
Application of R.15 to DNFBPs (C.12.1)<br />
895. All DNFBPs are required to undertake customer due diligence measures just as the financial<br />
institutions stated in Title II of the AML Act.<br />
Generally, the weaknesses identified in financial institutions, in the area of due diligence towards clients,<br />
are also found in the DNFBPs.<br />
For casinos and gaming establishments:<br />
896. In addition to the general customer identification obligations, Article 15 of the Act sets forth the<br />
following specific obligations for managers, owners and directors (and not for the legal entity owner<br />
itself):<br />
- “Upon requesting authorization to commence business, inform the public authority of the legal<br />
origin of the funds needed to set up the establishment”;<br />
- Check the identity of gamblers who buy, bring or exchange chips or tokens to the tune of one<br />
million (1,000,000) CFA francs or above (about 1,525 Euros), or the counter value of which is<br />
higher than or equal to this amount, by requesting the person to present an valid identity card with<br />
a picture or any other original and valid official document, and make a copy of it;<br />
- Keep records of gaming transactions in chronological order in a special register, indicating the<br />
nature of transaction and the amount, the names of the players, and the identity number presented,<br />
and maintain the records for 10 years following the last recorded transaction;<br />
- Keep records of all funds transfer made by casinos and gaming establishments in chronological<br />
order in a special register and maintain it for 10 years following the last recorded transaction.<br />
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897. In the event that the casino or gaming establishment is controlled by a legal entity with branches,<br />
the chips should identify the branch that issues them. Under no circumstances should another branch be<br />
unable to redeem the chips issued by a particular branch, be it situated in the same country, in another<br />
member-State of the Union or in a third country.<br />
898. Article 12 of Decree 078/MISATMF/MCAT/DC/DAI on the opening of casinos in the Republic<br />
of Benin requires that casinos keep a special register that is assessed, initialled and signed by the Minister<br />
of Interior and Security.<br />
The mission could not obtain proof of the respect by casinos of their client due diligence obligations.<br />
899. Real estate agents seem to show some concern when they buy or sell property for their customers.<br />
While the sector is subject to the AML Act, it is not regulated in Benin. Only the profession of estate<br />
developer, which, per Article 3 of Decree 99-442 of 17 September 1999 on the conditions for practising<br />
the profession in Benin, describes an estate developer as “any individual or corporate body who,<br />
habitually takes the initiative to carry out real estate development and is responsible for coordinating<br />
study, financing, control and management operations.”<br />
900. The mission met with an officer of the Real Estate Professionals Association of Benin (APIB),<br />
who admitted the association’s ignorance of the AML Act and the fact that they buy and sell property<br />
without any regulation or control, except for fiscal purposes by the Ministry of Finance. He also informed<br />
the assessors about a boom in the housing industry since the early nineties and the existence of cash<br />
transactions to the tune of three hundred million (300,000,000) CFA francs in the sector.<br />
901. It thus appears that estate agents do not comply with obligations to be vigilant toward their<br />
customers.<br />
902. The authorities of the Ministry of urban development, housing, land reform and coastal erosion<br />
met all admitted to being fully aware of the problem and said they were working on laws to improve<br />
regulation of the sector.<br />
903. The mission felt that the entire real estate sector needs to be reorganized as soon as possible,<br />
especially as the sector now seems to be a vector of money laundering, as revealed by a recent typology<br />
study conducted under <strong>GIABA</strong> (see details of the study at www.giaba.org).<br />
904. The activities of dealers in precious metals and stones are governed by a 1973 order on trade<br />
and exports of gold and other precious stones. The General Directorate of Mines under the Ministry of<br />
Mines carries out controls on the quantity of gold for export, but the origin of the gold is not checked,<br />
neither is the cost of the transaction.<br />
The mission could not obtain proof of the respect, by dealers in previous metals and stones, of their client<br />
due diligence obligations.<br />
905. The legal profession is regulated by the Act 65-6 of 20/4/1965 instituting the Benin Bar. Checks<br />
are carried out by the Council of the Bar Association and the Appeal Court, which controls and sanctions<br />
malpractice by the members of the profession, who are 150 in number.<br />
906. The AML Act requires them to be vigilant “when they represent or assist clients outside normal<br />
judicial procedures, and which entail the following activities: purchase and sale of property, trading<br />
enterprises, businesses, handling of money, securities or assets belonging to the client, opening or<br />
managing bank accounts, savings or securities, establishment and management of companies, trusts or<br />
similar concerns and execution of other financial operations”.<br />
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907. The mission met with the President of the Bar and another member of the association who<br />
bemoaned the poor knowledge of the AML Act within the profession, and expressed the need to raise<br />
awareness about it. To this end, a draft information bulletin was being prepared. The bar association has<br />
not organized any training or sensitization sessions on AML.<br />
908. The situation, according to them, is however improving since the start of the activities of<br />
CENTIF, which has been inviting members of the association to workshops and seminars.<br />
909. They expressed concern about the difficulty in applying the provisions of the AML Act, which<br />
has to do with “betrayal of professional secrecy”, on the part of their counterparts; an issue that must be<br />
addressed.<br />
All in all, it is clear that lawyers do not exercise the required vigilance toward their clients.<br />
910. The notary profession is regulated by Act 2002-015 of 30/12/2002. The Chamber of Notaries<br />
provides oversight for the profession, in conjunction with the Principal State Prosecutor. The country has<br />
25 notaries, most of whom are based in Cotonou. They often intervene in real estate transaction and in<br />
the establishment of companies.<br />
911. The mission held meetings with the President and Secretary of the Chamber of Notaries of Benin,<br />
who admitted that the profession had little knowledge of the AML Act. CENTIF had invited the<br />
association to a seminar in 2009.<br />
912. The profession had not observed the existence of trust companies; neither were there trust<br />
service providers in Benin.<br />
913. In practice, vigilance is poor and no money laundering case has been detected.<br />
914. The chartered accountant profession is regulated by Act 2004-033 of 27 April 2006 on the<br />
establishment of the association of authorized accountants in the Republic of Benin (OECCA-Benin),<br />
which has 71 members. Chartered accountants are defined as those who are registered with the<br />
association and engage in the following:<br />
� Audit, assess, revise and remedy the accounts of companies and institutions with whom they have<br />
no work contract;<br />
� Certify the consistency and sincerity of the summary financial statements of companies per<br />
prevailing legal and regulatory provisions;<br />
� Carry out accounting and financial audits.<br />
915. The AML Act makes reference to auditors, but in actual fact, one has to be first a chartered<br />
accountant before becoming an auditor.<br />
916. The association’s board exercises initial disciplinary control (Article 35); and the National<br />
Disciplinary Chamber is the appeal body. Disciplinary sanctions (without prejudice to penal sanctions)<br />
range from reprimand to disbarment. The Ministry of Finance is the supervisory ministry.<br />
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917. The mission met with the Deputy Treasurer, who admitted that the level of knowledge of the<br />
AML Act was very poor. However, the situation was improving, following in-house workshops held, and<br />
external ones organized by CENTIF and <strong>GIABA</strong>.<br />
No violation of the AML Act has been detected and no suspicious report made.<br />
The mission could not obtain proof of the respect, by Chartered Accountants, of their client due diligence<br />
obligations.<br />
Applying Recommendations 6, and 8 - 11 to DNFBPs C.12.2)<br />
918. For DNFBPs the same shortcomings mentioned above for financial institutions are true, in terms<br />
of the absence in the AML Act of relevant provisions on:<br />
� PEPs (R 6);<br />
� Policies and measures to be adopted and implemented to prevent misuse of ICT and control risks<br />
in business relations or transactions that do not involve the physical presence of the parties as part<br />
of AML/CFT (R8);<br />
� Resort to intermediaries and third parties (R9);<br />
� Nature and availability of documents to be maintained (R10);<br />
� Specific monitoring of unusual and suspicious transactions (R11).<br />
4.1.2 Recommendations and Comments<br />
919. The authorities should take the following measures:<br />
� Ensure wide propagation of the AML Act among DNFBPs concerned;<br />
� Establish guidelines for DNFBPs to facilitate respect of their obligations;<br />
� Regulate and control professions predisposed to money laundering, such as real estate agent;<br />
� Include in legislation, relevant provisions on R6, 8, 9, 10 and 11, as recommended for financial<br />
institutions;<br />
� Make an inventory of DNFBPs.<br />
4.1.3 Compliance with Recommendation 12<br />
Rating Summary of Factors Underlying Rating<br />
155
R 12 NC<br />
- DNFBPs do not seem to respect the client due diligence obligations<br />
imposed on them by the AML Act.<br />
- Are also valid for DNFBPs, the weaknesses identified in financial<br />
institutions concerning the absence in the AML Act of pertinent provisions<br />
regarding:<br />
- PEPs (R 6), policies and measured to be adopted and implemented to<br />
prevent abusive use of the new technologies and control the specific risks<br />
associated with business relations or transactions that do not imply the<br />
physical presence of the parties, in the context of anti-money laundering<br />
and financing of terrorism (R9), the nature and availability of documents to<br />
be kept (R10), the specific monitoring of unusual or suspicious transactions<br />
(R11).<br />
- DNFBPs’ ignorance of the AML Act and their obligations towards it...<br />
-Lack of regulation of certain professions that may be vectors of money<br />
laundering (Estate Agents, in particular)<br />
- Total lack of implementation.<br />
4.2 MONITORING SUSPICIOUS TRANSACTION REPORTING AND OTHER<br />
ISSUES (R.16) (APPLYING R.13-15, 17 & 21)<br />
4.2.1 Description and Analysis<br />
Obligation to report suspicious transactions to CENTIF (applying R.13 to 15, 17 and 21 to DNFBPs)<br />
Obligation to report suspicious transactions (C.16.1)<br />
920. Designated non-financial businesses and professions are liable to the general provisions of Article<br />
26, AML Act 2006-14, on the obligation to report suspicious transactions to CENTIF 2 .<br />
921. DNFBPs are also required to meet all the requirements mentioned above for financial institutions,<br />
in applying Recommendation 13.<br />
Suspicious transaction reports to self-regulatory organizations (16.2)<br />
922. Article 26 does not provide for STRs to be sent to organizations (such as self-regulatory<br />
organizations) other than CENTIF.<br />
Applying recommendations 14, 15 and 21 (16.3)<br />
Recommendation 14<br />
Protect genuine STRs and prohibit disclosure of STR information to clients (C.14.1 and 2)<br />
2 Article 26 of the AML Act stipulates that the persons referred to in Article 5 must report to CENTIF (i) any sums of money or other assets in<br />
their possession, that could be derived from money laundering; (ii) the transactions involving such assets, should these transactions be part of a<br />
money laundering activity; (ii) any sums of money or assets in their possession suspected to be intended for terrorist financing and that appear to<br />
be derived from transactions related to money laundering.<br />
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923. Article 30 of the AML Act stipulates that persons, directors and the employees of DNFBPs, who<br />
in good faith, have filed an STR shall be exempt from sanctions. Likewise, the prohibition from “warning<br />
the customer”, as set forth in Article 26 of the Act, shall prevail against them.<br />
Recommendation 15<br />
Internal control and staff ongoing training (C.15.1 to 4)<br />
924. DNFBPs should also institute procedures, policies and internal control measures to prevent money<br />
laundering (cf. Article 13 of AML Act).<br />
They should also undertake ongoing training for staff.<br />
Recommendation 21<br />
925. There is no provision for DNFBPs to pay special attention to countries that do not or inadequately<br />
apply the FATF Recommendations; there is equally no provision for special scrutiny of transactions with<br />
these countries or the possibility to implement counter measures.<br />
926. With regard to special provisions, only casinos and gaming establishments have special<br />
obligations, but do not comply with the criteria under Recommendation 16.<br />
Additional elements - extending STR to other professional accounting activities (C.16.4). STR on<br />
proceeds from predicate offences (16.5)<br />
(C.16.4)<br />
927. The AML Act only targets “Auditors”, which may include chartered accountants, but not licensed<br />
accountants<br />
(C.16-5)<br />
928. As mentioned under R13, the AML Act only targets money laundering and terrorism financing<br />
offences.<br />
4.2.2 Recommendations and Comments<br />
929. The recommendations and comments made for financial institutions under R 13 14, 15 and 21<br />
(see section 3 above) are also true for DNFBPs.<br />
4.2.3 Compliance with Recommendation 16<br />
Rating Summary of Factors Underlying Rating<br />
157
R 16 NC<br />
Inadequate control;<br />
No internal controls to prevent money laundering;<br />
No special attention to countries that do not adequately apply FATF<br />
recommendations;<br />
No anti-money laundering programmes<br />
No effective implementation of requirements of R. 16<br />
4.3 REGULATION, SUPERVISION AND MONITORING (R.24-25)<br />
4.3.1 Description and Analysis<br />
816. The following table shows the competent authorities responsible for control and monitoring of<br />
DNFBPs in Benin.<br />
158
Professions concerned Supervisory<br />
authorities<br />
Independent legal<br />
professions:<br />
Lawyers<br />
Notaries<br />
Bailiffs<br />
Auditors<br />
Real Estate Agents<br />
Ministry of Justice<br />
Ministry of Justice<br />
Ministry of Justice<br />
Regulatory and selfregulatory<br />
authorities<br />
AML/CFT control<br />
authority<br />
Lawyers Ministry of<br />
Justice<br />
Prosecutor’s<br />
(General<br />
Notaries Association<br />
Office)/Bar<br />
Council/ President of the<br />
Bar<br />
Notaries<br />
Justice<br />
Ministry of<br />
(General<br />
Bailiffs Association<br />
Prosecutor’s Office) /<br />
Notarial Association)<br />
Bailiffs Ministry of Justice<br />
(General Prosecutor’s<br />
Office) – Bailiffs<br />
Association<br />
Bar Council<br />
Ministry of EconomyCouncil<br />
of CharteredCouncil<br />
of the<br />
and Finance Accountants and CertifiedChartered<br />
Accountants<br />
Accountants<br />
and<br />
Accountants<br />
Certified<br />
MEF<br />
Ministry of Trade Ministry of Urban<br />
Development<br />
159
Dealers in valuable items Ministry of Trade<br />
such as artefacts and<br />
precious<br />
metals<br />
stones and<br />
Money couriers<br />
Owners, directors and<br />
managers of casinos and<br />
gaming establishments,<br />
including the national<br />
lotteries<br />
Travel Agencies<br />
Non-governmental<br />
organizations<br />
Ministry of Trade<br />
Ministry of Interior<br />
Ministry of Interior<br />
Ministry of Economy<br />
MEF<br />
and Finance<br />
Ministry of Trade<br />
.<br />
Ministry of Tourism Ministry of Tourism<br />
Recommendation 24<br />
Regulation and supervision of casinos (C. 24.1)<br />
Opening and operations<br />
National NGO – National NGO – Ministry<br />
Ministry of Interior / of Interior/ Ministry in<br />
Ministry in charge ofcharge<br />
of relations with<br />
relations<br />
institutions<br />
with Institutions<br />
International NGO -<br />
International NGO -<br />
Ministry of Interior /<br />
Ministry of Interior /<br />
Ministry of Foreign<br />
Affairs<br />
Ministry of Foreign Affairs<br />
Decree 2001 – 234<br />
MEF<br />
Ministry of Tourism<br />
930. The conditions for opening and operating casinos, mostly housed in the major hotels, are set forth<br />
in Inter-ministerial Decree 078/MISATMF/MCAT/DC/DA of 2 June 1997, on the opening of casinos in<br />
the Republic of Benin.<br />
931. The application for temporary authorization for opening a casino must be attached with the<br />
following documents:<br />
1)-An application together with the following documents:<br />
� Criminal record dating back three months at most;<br />
160
� Certified true copy of lease,<br />
� Two copies of the registered statutes of the company established to operate the casino;<br />
� A sheet showing full identification, profession and residence of the company director.<br />
2) The Director and Deputy Director must provide an individual file comprising:<br />
� Birth certificate;<br />
� Criminal record dating back three months at most;<br />
� A nationality certificate;<br />
� A curriculum vitae;<br />
� Three recent ID photos.<br />
3) Individual documentation for staff comprising the same papers as for the Director and Deputy Director;<br />
4) A pay-in slip for CFAF 250,000 being cost for studies, paid at a bank selected for this purpose;<br />
5) A pay-in slip for an amount of CFAF 5,000,000 paid at a bank selected for this purpose;<br />
6) Specifications;<br />
7) Application for license for casino staff.<br />
932. Prior to starting operations, the managers and staff of the casino must be licensed by the Minister<br />
of Interior and Security, following security checks made on them.<br />
933. The casino director is obligated to keep a separate accounting for gambling and a separate one for<br />
the commercial operations of company. At all times, he is also required to make available for the<br />
ministries of Interior and Finance, all company documents, which are to be kept at the company’s<br />
premises.<br />
934. The Ministry of Interior prohibits access to the casino by minors and nationals.<br />
Controls on opening and operating casinos, and sanctions<br />
935. The staff of the Ministry of Interior are responsible for supervising the casino (general oversight,<br />
entry conditions, hours, etc.); the Ministry of Trade is responsible for controlling the general and special<br />
161
accounting of the casino; and the Ministry of Trade controls application of operating standards for the<br />
premises, quality of services, etc. Holders of warrants issued by the competent Ministers and casino<br />
directors must subject themselves to their control and avail themselves to all investigations. They must<br />
have an office within or outside the casino premises.<br />
936. Any violation to the rules may lead to withdrawal of the authorization, temporary or permanent<br />
closing of the casino, temporary or permanent withdrawal of the license given to the director or his<br />
deputy, all without prejudice to penalties against the offender.<br />
937. The assessors met with a casino director who operates two gaming rooms. He admitted that<br />
before participating in a workshop organized on AML/CFT by <strong>GIABA</strong> in Abidjan, he had no knowledge<br />
of the AML Act. According to him, the risk of money laundering with casinos is rare because of the<br />
relatively small amount of earnings (CFAF 8 million per night maximum, with a face value of CFAF<br />
100,000 worth of chips).<br />
938. Foreign exchange is accepted at the gaming tables. This, however, is against foreign exchange<br />
regulations.<br />
939. Checks, sometimes, surprise ones, are conducted, although none of them has to do with money<br />
laundering.<br />
Regulation and supervision of other DNBFPs (C. 24.2)<br />
Notaries<br />
940. The notary profession is guided by Act 2002-015 of 30 December 2002. Notaries are public<br />
officers empowered to draw up all documents and contracts for which the relevant parties must or wish to<br />
establish the authenticity ascribed to instruments of the public authority. They are responsible for<br />
certifying the dates of these documents and contracts, recording the information submitted and issuing<br />
copies and certificates thereof (Article 1 of the Act).<br />
941. Notaries are appointed by decree by the Council of Ministers, on the proposal of the Minister for<br />
Justice, upon notification by the commission responsible for providing opinion or making<br />
recommendations on the location of the offices of notaries, depending on the public need, the geographical<br />
area, population growth and economic development. They may also be appointed following the<br />
establishment of a professional civil society.<br />
942. They swear an oath at the Court of Appeal, which is their supervisory body and where their<br />
accounting records are kept.<br />
943. The duties of the notary are incompatible with the professions of traders, judges, lawyers, bailiffs,<br />
auctioneers and public servants, except in the case of notary clerks at the Appeal Court, where there is no<br />
notary office. The notary is prohibited from speculating on the stock market or carrying out trading,<br />
discounting and brokering.<br />
162
944. Notaries are required to make a down payment of two million CFA francs, in cash, as a safeguard<br />
for possible conviction in the event of any form of malpractice.<br />
945. In the event of breach of discipline by the Notary, Article 113, of the Notarial Act 2002-015 of 30<br />
December 2002 stipulates that the Principal State Prosecutor, upon notification by the National Chamber<br />
of Notaries, may call the notary to order or discipline him.<br />
946. With regard to other penalties (suspension for one year maximum or removal), the Principal State<br />
Prosecutor submits, following notification by the Chamber of Notaries, proposals that he deems necessary<br />
to the Keeper of the Seals, Minister of Justice. By decree, the Keeper of the Seals declares the suspension<br />
of the defaulting notary, following a hearing. The removal is pronounced by decree issued by the Council<br />
of Ministers, on the proposal of the Keeper of the Seals. Pursuant to Article 117 of the same Act,<br />
violations to the law and other infringements on discipline shall be liable to proceedings by the Principal<br />
State Prosecutor at the competent Appeal Court, even where there is no complainant.<br />
947. Legal proceedings leading to a fine or damages, are brought before the district court of his area.<br />
Lawyers<br />
948. The Council of the Ordre des Avocats (Bar Association), which sits as a disciplinary council, may<br />
take legal action and punish malpractice by lawyers registered on their list and those on the internship list.<br />
Article 27, Act 65-6 of 2 April 1965 establishing the Bar of the Republic of Benin stipulates that the<br />
General Legal Council, sitting as a disciplinary council, shall prosecute and punish malpractice by lawyers<br />
registered on their list or on the internship list. This shall be done automatically, at the request of the<br />
Principal State Prosecutor and or on the initiative of the President of the Bar. It shall rule by decree and<br />
impose, where appropriate, one of the following disciplinary penalties as stipulated in Article 29:<br />
- Warning;<br />
- Reprimand;<br />
- Temporary ban, not exceeding three years;<br />
- Removal from the Roll of Lawyers or the internship list;<br />
- Warning, reprimand or temporary ban may also entail forfeiting membership rights on the General<br />
Legal Council for a period not exceeding 10 years.<br />
949. A lawyer who is removed may not be registered on the roll or as an intern of any jurisdiction in<br />
Benin.<br />
950. No disciplinary action may be taken if the defaulting lawyer has not been heard or summoned<br />
within one month - the President of the Bar shall notify by registered letter, with acknowledgement of<br />
receipt, any decision taken by the Disciplinary Council, within 10 days of the notification. He shall also<br />
notify the Principal State Prosecutor of the decision within three days of the notification, when the issue is<br />
brought before the General Legal Council, and in other cases, only where temporary prohibition or<br />
disbarment has been ruled. The Principal State Prosecutor ensures that these disciplinary actions are<br />
carried out.<br />
163
951. Cases of malpractice submitted by the Principal State Prosecutor to the General Legal Council<br />
should be acknowledged within eight days. If, within a period of three months (where the lawyer in<br />
question is in the country), and six months (where he is absent), no decision has been taken by the<br />
Disciplinary Council, the Principal State Prosecutor may directly bring the matter before the Appeal<br />
Court, which will determine the merits of the case as follows.<br />
952. The same rule shall apply where the Principal State Prosecutor, prior to hearing about a complaint<br />
lodged with the General Legal Council for indiscipline, would have notified the Council, with no decision<br />
being taken within the same period, as from the date of the notification, receipt of which should be<br />
acknowledged within eight days.<br />
953. Should he deem it necessary, the Principal State Prosecutor, may request a copy of any<br />
disciplinary decision taken by the General Legal Council, even when the Council is not obliged to notify<br />
him of such decision.<br />
954. Exercising disciplinary rights in no way hinders any legal action that the Public Prosecutor or<br />
plaintiffs may take to seek redress for actions constituting offences or crimes.<br />
Auditors<br />
955. The AML Act used the term “Auditors”, but per the regulation in force, it appears that only<br />
Chartered Accountants registered on the Role of lawyers may be appointed to practise the profession of<br />
Auditor.<br />
956. The profession of Chartered Accountant is guided by Act 2004-033 of 27 April 2006, on the<br />
establishment of the Association of Chartered Accountants and Licensed Accountants of Benin (OECCA-<br />
Benin). The 2009 roll lists 55 Chartered Accountants and 25 Licensed Accountants. A Chartered<br />
Accountant is defined by the above Act as one who is registered with the association and normally carries<br />
out the following functions:<br />
� Audit, assess, revise and improve the accounts of companies and organizations with whom<br />
the Chartered Accountant has no work contract;<br />
� Certify the consistency and accuracy of summary financial statements of companies, in line<br />
with prevailing legislative and regulatory provisions;<br />
� Conduct accounting and financial audits.<br />
957. The council of the association exercises initial disciplinary action (Article 35), the National<br />
Disciplinary Chamber is the appeal body. Disciplinary actions (without prejudice to penal sanctions)<br />
range from warning to expulsion.<br />
Real Estate Agents<br />
958. Apart from the obligation to hold a professional card issued by the Ministry of Trade, the estate<br />
agent profession is not regulated.<br />
164
959. On the other hand, we find on the real estate market, estate developers whose profession is<br />
regulated and supervised by the Ministry of Urban Planning.<br />
960. There is a score of people in this sector who are all grouped within the Association of Real Estate<br />
Professionals of Benin (APIB), established to defend the interests of the profession.<br />
961. The profession of money courier is not yet regulated.<br />
962. The only money courier company in Benin benefited from a special decree authorizing it to<br />
practise under the supervision of the Ministry of Security.<br />
Other institutions subject to the act<br />
963. Others, like dealers in valuable items, travel agencies and NGOs are regulated and supervised by<br />
supervisory institutions, as shown in the table above.<br />
964. Most designated non-financial professions are subject to supervision by a control authority;<br />
however, AML controls do not take place. This was due to lack of human, financial and material<br />
resources.<br />
Recommendation 25<br />
Guidelines for DNFBPs (C.25.1)<br />
965. The mission observed that the DNFBP authorities had not drawn up any guidelines on AML.<br />
CENTIF has planned some training sessions in this regard. DNFBPs have no information or<br />
documentation to help them comply with AML requirements.<br />
Feedback to DNFBPs by the FIU and the competent authorities (C.25.2)<br />
966. DNFBPs sent no suspicious transaction reports to CENTIF, and there is therefore no information<br />
feedback.<br />
967. Moreover, CENTIF’s first activity report was not sent to the DNFBPs to inform them about this<br />
key AML/CFT institution.<br />
4.3.2 Recommendations and Comments<br />
968. The authorities should:<br />
- See to the application of sanctions, in the event of violations;<br />
- Ensure wide dissemination of the AML Act;<br />
- Draw up guidelines to help DNFBPs to apply and comply with their AML obligations. These<br />
guidelines should particularly describe money laundering techniques and methods, and show<br />
additional measures for DNFBPs;<br />
165
- Ensure compliance with AML/CFT obligations of casinos and other categories of designated<br />
non-financial businesses and professions;<br />
- Distribute the CENTIF activity report among DNFBPs;<br />
- Take measures to ensure efficiency of anti-money laundering and combating financial terrorism<br />
operations;<br />
- Organize AML/CFT training and sensitization sessions for DNFBPs.<br />
4.3.3 Compliance with Recommendations 24 and 25<br />
Rating Summary of Factors Underlying Ratings<br />
Lack of regulation of the estate agency profession<br />
Failure by casinos to apply AML regulations<br />
R24 NC Authorities’ failure to control non-compliance with AML obligations by<br />
casinos and other DNFBPs<br />
R25 NC<br />
Failure to implement sanctions<br />
Lack of guidelines;<br />
DNFBPs control authorities unaware of this recommendation<br />
No training and sensitization programmes by authorities for DNFBPs<br />
No STRs<br />
Failure to send CENTIF activity report to DNFBPs<br />
4.4 OTHER NON-FINANCIAL BUSINESSES AND PROFESSIONS - MODERN<br />
SECURE TRANSACTION TECHNIQUES (R.20)<br />
4.4.1 Description and analysis<br />
Applying Recommendations 5, 6, 8, 11, 13-15, 17 and 21 to other businesses that present money<br />
laundering risks (C.20.1)<br />
969. The AML Act imposes anti-money laundering obligations on institutions subject to it other than<br />
DNFBPs targeted by GAFI. They include dealers in valuable items, such as works of art, travel agencies,<br />
conveyors of funds, gaming establishments (other than casinos), national lotteries and non-governmental<br />
organizations.<br />
But, these subjected institutions, whose level of vulnerability to money laundering risk has not yet been<br />
studied, have no knowledge of their obligations in the area of AML resulting from the act due to their<br />
ignorance of the latter.<br />
166
970. The mission met with the representative of a money courier company, who confirmed that there<br />
was no regulation for the profession and admitted his ignorance of the AML Act.<br />
971. The travel agency met also said it had no knowledge of the AML Act.<br />
Development of modern, secure money management techniques C.20.2)<br />
972. Regulation 15/2002/CM/UEMOA on payment systems in WAEMU member-States sets forth the<br />
promotion and use of non-cash payment methods.<br />
973. This text grants the “right to an account”, with minimum banking service, to all natural and legal<br />
persons that have a regular income. It obligates all traders to open an account. In transactions among<br />
themselves or with their clients, the traders are required to accept payments by cheque, the threshold of<br />
which shall be fixed by the Minister of Finance of each member country.<br />
974. In the same vein, per Guideline 01/2003/SP of 8 May 2003, applying Guideline<br />
08/2002/CM/UEMOA of 19 September 2002, on promoting the extension of banking facilities and<br />
utilization of non-cash payment methods, WAEMU set at one hundred thousand (100,000) CFA francs the<br />
baseline for carrying out non-cash payment transactions between private persons and public persons<br />
(mainly salaries and taxes).<br />
The mission could not assure itself of the effective implementation of the results of these measures, in<br />
particular the promotion of extension of banking facilities, as no control or evaluation has been conducted<br />
and made available in that regard.<br />
4.4.2 Recommendations and Comments<br />
975. The AML Act certainly contains obligations for businesses and professions other than DNFBPs.<br />
976. At the initiative of the community authorities, measures were taken to encourage the use of noncash<br />
payment trnsacctions.<br />
977. However, the lack of vulnerability studies on institutions subject to the act, knowledge of their<br />
AML obligations by the interested parties, control, evaluation, and lack of effectivement appeared as<br />
obstacles to compliance with R20.<br />
978. The authorities should therefore:<br />
- Conduct studies to determine the level of vulnerability of institutions subject to the ML Act;<br />
- Ensure dissemination of the AML Act to entities other than DNFBPs, so they know their<br />
obligations;<br />
- See to the control and evaluation of the effective implementation of measures to promote the<br />
extension of banking facilities and non-cash payment methods.<br />
167
4.4.3 Compliance with Recommendation 20<br />
Rating Summary of Factors Underlying Ratings<br />
R 20 NC<br />
-Lack of studies on the level of vulnerability of institutions subject to the<br />
.<br />
AML Act<br />
- Ignorance of the law by those concerned;<br />
- Lack of control and assessment of prescribed measures<br />
- No effective measures to promote extension of banking facilities and noncash<br />
payment methods<br />
5. LEGAL PERSONS AND ARRANGEMENTS & NON-PROFIT<br />
ORGANIZATIONS<br />
5.1 LEGAL PERSONS – ACCESS TO BENEFICIAL OWNERSHIP AND<br />
CONTROL (R.33)<br />
5.1.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� Uniform Act on General Commercial Law (AUDCCG);<br />
� OHADA Uniform Act on Commercial Companies and Economic Interest Groups (AUDSC-GIE);<br />
� Act 90-005 of 15 May 1990 stipulating conditions for conducting commercial activities in the<br />
Republic of Benin.<br />
Legal and regulatory obligation to ensure transparency concerning ownership and control of legal<br />
persons (C.33.1)<br />
979. Act 90-005 of 15 May 1990 on conditions for conducting commercial activities in Benin Republic<br />
stipulates that “the conducting of commercial activities and services deemed to be commercial shall be<br />
free, subject to the application of legal inabilities and inconsistencies provided for by current laws and<br />
regulations” (Article 1). The nationality of the company is determined by the level of participation of<br />
private nationals or the Government (51% threshold of the capital). The law also stipulates the obligation<br />
to hold a professional card issued by the Minister of Trade<br />
980. Furthermore, by virtue of the provisions of relevant articles of the Uniform Act of the General<br />
Commercial Law, “Any natural person with the status of a trader, as defined in the present Uniform Act,<br />
must in the first month of operation of his business, apply to the Registrar of the competent court within<br />
168
whose jurisdiction the business operates, to be registered in the commercial register. In Benin, this is the<br />
responsibility of the Court of First Instance. Responsibility for the centralization of the Trade and Personal<br />
Property Credit Register lies with the Registry of the First Class Court of First Instance of Cotonou.<br />
Applications for registration must provide the following information:<br />
For natural persons:<br />
1) Full name and personal residence of the applicant;<br />
2) date and place of birth;<br />
3) nationality;<br />
4) where necessary, the name under which the applicant conducts the trade, as well as the sign or<br />
logo used;<br />
5) business activity (activities) and form of operation;<br />
6) date and place of marriage, system of matrimonial property adopted, clauses binding on parties<br />
restricting the freedom to dispose of the property of spouses or the absence of such clauses,<br />
requests for the separation of property;<br />
7) full names, dates and places of birth, residences and nationalities of persons mandated to render<br />
by their signature the concerned party liable;<br />
8) address of the main establishment, and, where necessary, that of each of the other establishments<br />
or branches operating on the territory of the State Party;<br />
9) where appropriate, the nature and location of the last business establishments the applicant<br />
operated previously indicating their business registration and Credit on Personal Property<br />
number(s) of such establishments;<br />
10) date of commencement, by the concerned party, of the operation of the main establishment and,<br />
where applicable, of other establishments.<br />
The applicant shall support his/her statements with the following documents:<br />
1) A copy of birth certificate or any administrative document testifying to his/her identity<br />
2) A copy of marriage certificate where necessary;<br />
3) Criminal record, or its equivalent; where the applicant is not a citizen of the State Party in which<br />
he makes his/her registration, he/she should also provide a copy of the applicant’s criminal record<br />
issued by the Authorities of his/her country of birth, and by default any equivalent document;<br />
4) A certificate of residence;<br />
5) A copy of the document of title or lease of the main establishment, and where applicable, that of<br />
other establishments;<br />
6) In case of acquisition of funds, or leasing management, a copy of the acquisition act or leasing<br />
management act;<br />
7) Where necessary, prior authorization to conduct the trade.<br />
For legal persons concerned by the Uniform Act:<br />
1) Corporate name;<br />
169
2) Firm name, acronym or sign;<br />
3) Activity (activities) undertaken;<br />
4) Form of the company or legal person;<br />
5) Amount of nominal capital indicating the amount of cash contributions and an assessment of<br />
contributions in kind;<br />
6) Address of head office and, where applicable, that of the main business establishment and each of<br />
the other establishments;<br />
7) Duration of the company or the legal person as defined by its statutes;<br />
8) Full names and personal residence of business associates who have unlimited liability for the<br />
company’s debts, indicating their dates and places of birth, their nationality, date and place of<br />
marriage, system of matrimonial property, clauses binding on parties restricting the freedom to<br />
dispose of the property of spouses or in the absence of such clauses, requests for the separation of<br />
property<br />
9) Full names, date and place of birth and residence of managers, administrators or business<br />
associates mandated to commit the company or the legal person;<br />
10) Full names, date and place of birth, addresses of the auditors, where their appointment is required<br />
by the Uniform Act in respect of Company Law and Economic Interest Groups.<br />
To this application may be added the following supporting documents:<br />
1) Two certified true copies of the statutes;<br />
2) Two copies of statement of validity and conformity, or legally authenticated statement of<br />
subscription of payment;<br />
3) Two copies of the certified true list of managers, administrators or business associates liable<br />
without limits and personally responsible or mandated to commit the company;<br />
4) Two copies of criminal records of the persons mentioned in the above paragraph; where the<br />
applicant is not a national of the State Party in which he/she applied for registration, he/she should<br />
also provide a copy of personal criminal records issued by the Authorities of his/her Country of<br />
birth, or an equivalent document.<br />
981. As indicated above, the Uniform Act on the General Commercial Law requires legal persons<br />
mentioned in the Uniform Act on Commercial Company Law and the GIE to apply for their registration in<br />
the month of their entry in the RCCM of the jurisdiction within which their head office falls (Article 27<br />
AUDCG).<br />
982. Pursuant to Article 98 of AUSGIE, any company has legal personality upon registration in the<br />
RCCM.<br />
983. With regard to obligation for commercial companies to register, this particularly concerns general<br />
partnership companies, limited partnership companies, private companies (SARL), public limited<br />
companies and economic interest groups.<br />
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984. Furthermore, Article 10 of AUSCGIE requires that the statutes of the aforementioned companies<br />
must be established by notarial deed or by any instrument that ensures legal validity in the country of<br />
company’s head office and be deposited in the notary’s office together with the certification of the<br />
writings and signature by all the parties. The statutes must include the following:<br />
� The identity of cash contributors indicating the amount of each contribution, the number and value<br />
of shares issued in exchange for each contribution;<br />
� The identity of the contributors in kind, the nature and assessment of each one, the number and<br />
value of shares issued in exchange for each contribution;<br />
� The identity of persons enjoying special benefits and the nature of such benefits;<br />
Registration has a personal status;<br />
Article 33 of AUDCCG stipulates, with regard to the updating of information, that any changes in<br />
information provided initially must be mentioned in the RCCM.<br />
Timely access to information on beneficial ownership (C.33.2) - Additional element (34.3)<br />
985. Information contained in the RCCM is available to the public, prosecuting agencies (police and<br />
gendarmerie and judicial authorities) and financial institutions. In fact, it is mainly persons trading with<br />
registered legal persons and those involved in legal disputes who request access to the RCCM. Despite<br />
some level of computerization, access to information contained in the RCCM is not easy.<br />
986. However, the prosecution agencies indicated that, in practice, they obtain information on legal<br />
persons from tax authorities. The latter have more detailed information on legal persons than those listed<br />
in the RCCM, especially with regard to the shareholders of a legal person.<br />
987. Legal persons are compelled to inform tax agencies of each change in their management and body<br />
of shareholders and the agencies can mete out sanctions if such information is not provided. In practice,<br />
such sanctions are enforced. Prosecution agencies must obtain such information the same day: even if the<br />
comptroller of taxes always requests prior approval, this is generally granted within 24 hours. General<br />
information (including information on management) is stored in a computerized database. More specific<br />
information is stored in hard copy in the tax departments.<br />
Prevention of the misuse of bearer shares (C.33.3)<br />
988. Article 744 and following of AUSCGIE stipulates that public limited companies are authorized to<br />
issue securities (shares and bonds), in the form of “bearer shares or registered shares”. For companies that<br />
are not publicly traded, bearer shares may be conveyed by mere delivery; the bearer of the share is deemed<br />
to be the owner (Art. 764 Paragraph 1). In the case of publicly traded companies, AUSCGIE provides that<br />
apart from mere delivery, bearer shares “may be represented by registration in an account opened in the<br />
name of their owner and held either by the issuing company or by a financial intermediary licensed by the<br />
Ministry of Economy and Finance; the shares may then be conveyed by transfer from one account to<br />
another”.<br />
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989. The provision of the Uniform Act does not make it possible to ensure that bearer shares issued by<br />
limited public companies are not misused. The mission could not obtain figures on the number of persons<br />
issuing this type of share and the amount and value of shares in circulation.<br />
990. However, according to the authorities the team met with, no such case has yet been detected.<br />
Analysis of Effectiveness<br />
991. In commercial matters, it is the OHADA Law which is applicable in Benin. Admittedly, the<br />
assessment team was unable to ascertain actual compliance with various obligations outlined in the<br />
different legal instruments but, overall, the entire commercial fabric and legal persons operate in<br />
accordance with the OHADA regulations. Similarly, the team was unable to ascertain whether the data<br />
had been updated.<br />
992. There is indeed a central national RCCM file at the First Class Court of First Instance of Cotonou<br />
and an RCCM in each of the eight courts of Instance of Benin and it is the location of the head office of a<br />
company that determines its registration. The central RCCM of Cotonou was computerized in December<br />
2006 and registrations resumed since then.<br />
993. The team was informed about the existence of a deputy judge near the Commercial Court<br />
responsible for the control of the RCCM located at the Registry of the Court of First Instance of Cotonou.<br />
Furthermore, the team was informed that responsibility for ascertaining the accuracy of information<br />
produced by legal persons lies with the notary.<br />
994. Furthermore, the team obtained extracts from the RCCM, but the assessors were unable to<br />
measure their reliability or ensure the effectiveness of the updates made.<br />
995. The team also learnt that information held by the tax authorities was more reliable and up-to-date,<br />
with the exception of a case involving the inclusion of a foreign company among the shareholders of a<br />
limited public company. In this case, the authorities could not provide information on the management and<br />
shareholders of the foreign company, namely the actual beneficiaries. In fact, such cases are rare. In view<br />
of the insignificant level of foreign interests, this does not represent a high risk.<br />
996. Also, it is worth noting that independently of the compliance with the set of rules prescribed by<br />
the OHADA regulations with regard to registration and statues of companies, the large size of the informal<br />
sector in the economy of Benin did not make it possible to obtain adequate, relevant and up-to-date<br />
information. The authorities confirmed the existence of many economic actors who operate as legal<br />
persons without being registered.<br />
997. Lastly, the Beninese authorities did not mention measures specially taken to prevent legal persons<br />
from issuing bearer shares that can be used for money laundering.<br />
5.1.2 Recommendations and Comments<br />
998. The Beninese authorities should take steps to:<br />
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� Implement the provisions of OHADA regulations, notably with regard to the updating of data<br />
contained in the RCCM ;<br />
� Monitor bearer shares (number of issues, value and state of circulation) to prevent legal persons<br />
from issuing shares for the purpose of money laundering;<br />
� To ensure that public services, notably those pertaining to taxes obtain more information on<br />
foreign companies holding shares in Beninese companies<br />
� To monitor the fulfilment by notaries of their obligations to obtain, verify and preserve documents<br />
on actual ownership and control of legal persons.<br />
5.1.3 Compliance with Recommendation 33<br />
Rating Summary of Factors Underlying Rating<br />
R 33 NC<br />
Absence of verification of compliance with OHADA obligations<br />
Inaccurate information contained in RCCM.<br />
Irregular updating of information<br />
Information contained in RCCM does not make it possible to identify<br />
beneficial ownership;<br />
No measures preventing the illegal use of legal persons issuing bearer<br />
shares for money laundering.<br />
5.2 – LEGAL ARRANGEMENTS – ACCESS TO INFORMATION ON BENEFICIAL<br />
OWNERSHIP AND CONTROL INFORMATION (R.34)<br />
5.2.1. – Description and Analysis<br />
999. Beninese law does not provide for the creation of trusts and comparable arrangements. According<br />
to information garnered by the evaluation team, there is no foreign trust in the country.<br />
1000. Article 5 of the AML Act makes reference to “the constitution, administration or management of<br />
companies, trusts or similar structures, execution of financial operations” in operations conducted by<br />
members of legal professions. The fact that the word “trust” is mentioned in the law gives the impression<br />
that it would be possible to establish one in Benin. But the authorities and PNFD representatives met<br />
clearly indicated that such arrangements did not exist in Benin and that there is no legal arrangement to<br />
guide its establishment (There is no provision in the OHADA Act on such a structure).<br />
5.2.2. Compliance with Recommendation 34<br />
R 34 NA<br />
Rating Summary of Factors Underlying Rating<br />
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5.3 NON-PROFIT ORGANIZATIONS (SR.VIII)<br />
5.3.1 DESCRIPTION AND ANALYSIS<br />
� Law of 1 st July 1901 on Memorandum of Association;<br />
� Decree 2001 – 234 of 12 July 2001 stipulating the conditions of existence and modalities of<br />
operation of NGOs and their umbrella organizations.<br />
� Law 2006-14 of 31 October 2006 on the fight against money laundering<br />
� Law 2006-14 of 31 October 2006<br />
� Article 136 of criminal code procedure<br />
� Decree 2006 – 752 of 31 December 2006 on the creation, jurisdiction, organization and operation<br />
of the National Financial Information Processing Unit (CENTIF)<br />
� Guideline 04/2007/CM/WAEMU on the CFT in WAEMU member-States<br />
1001. In order to carry out their activities in Benin, Non-Profit Organizations (NPOs) are required to<br />
register either at the Ministry of Interior, in Prefectures or in Town Halls and have this published in the<br />
Gazette. They are governed by the Law of 1 July 2001 on memorandum of association and by Decree<br />
2001 – 234 of 12 July 2001 defining the conditions of existence and modalities of operation of NGOs and<br />
umbrella organizations. The documents required for the application include the statutes. They clearly<br />
outline the purpose, aim of activities and identity of persons who constitute their various structures.<br />
1002. This information is subsequently published in the Gazette and in the press media in accordance<br />
with current regulations.<br />
1003. The AML Act subjects Non-Governmental Organizations (NGOs) to the relevant obligations,<br />
notably those relating to vigilance, preservation and communication of documents.<br />
Review of the adequacy of laws and regulations pertaining to NPOs (VIII.1)<br />
1004. The Beninese authorities view the risk of financing of terrorism to be low and have not<br />
undertaken a review of the adequacy of current legislation applicable to associations and NGOs or<br />
conducted a specific study to assess the vulnerability of the sector to this risk.<br />
1005. Furthermore, in the absence of the transposition into national law of the WAEMU guideline on<br />
CFT, and a relevant article devoted to NPOs, there is no provision on the control and regulation of NGOs<br />
that could be misused for the purposes of financing of terrorism as part of their activities .<br />
Assistance to the NPO sector (VIII. 2)<br />
1006. No outreach action has been undertaken in Benin for Non Profit Organizations (NPOs) in Benin<br />
pertaining to money laundering or financing of terrorism. However, the Centre for the promotion of Civil<br />
Society of the Ministry responsible for relations with Institutions assists NPOs to organize themselves and<br />
conform to current Laws and Regulations. There are plans to set up a Committee in charge of establishing<br />
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a national NPO coordinating structure to ensure greater effectiveness in their missions and relations with<br />
their partners namely the Government and external technical and financial partners.<br />
Support for the monitoring and oversight of NPOs (VIII. 3)<br />
1007. There are no support measures for the monitoring and oversight of NPOs despite the substantial<br />
financial resources available to some or the significant role played by the sector in international relations.<br />
Only financial controls relating to taxation are carried out when an NPO receives public funds.<br />
5.3.2 Recommendations and Comments<br />
1008. The authorities should:<br />
� Review the adequacy of the current legislation applicable to associations and NGOs and conduct a<br />
specific study to assess the vulnerability of the sector to AML/CFT risks;<br />
� Transpose as early as possible the WAEMU guideline on CFT in the country’s laws, notably to<br />
define provisions for the monitoring and regulation of NGOs and avert their misuse for the<br />
financing of terrorism as part of their activities.<br />
� Undertake awareness raising campaign on AML/CFT for NPOs.<br />
� Undertake adequate monitoring of NPOs to ensure their compliance with AML requirements<br />
stipulated by law.<br />
� Effectively enforce sanctions in case of violation of AML Act.<br />
5.3.3 Compliance with SR VIII<br />
S R<br />
VIII<br />
Rating Summary of Factors Underlying Rating<br />
NC<br />
Lack of knowledge of the AML Act by NPOs<br />
Lack of monitoring and oversight of NPOs under AML;<br />
Lack of awareness of NGO sector<br />
Legal vacuum with regard to CFT;<br />
Absence of implementation<br />
6. NATIONAL AND INTERNATIONAL COOPERATION<br />
6.1 NATIONAL COOPERATION<br />
6.1.1 Description and Analysis<br />
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Effective Mechanisms of Cooperation and Coordination to Combat Money Laundering and<br />
Financing of Terrorism (C.31.1)<br />
1009. Apart from Article 19 of the AML Act instituting the counterparts of the CENTIF, notably within<br />
the National Police, Gendarmerie, Customs and Judicial Services, the AML Act makes no specific<br />
provision for cooperation between the competent authorities and the coordination of their activities.<br />
1010. In practice, apart from cooperation in general law organized by the Criminal Code Procedure<br />
between law enforcement agencies, the evaluation team was also informed that the Economic and<br />
Financial Brigade of the Criminal Police Directorate collaborates with the Gendarmerie in the area of<br />
AML.<br />
1011. But, in general, the team noted that further efforts should be made in the sharing of information<br />
between the various agencies (viz. Police, Gendarmerie and Customs).<br />
1012. It would also appear that cooperation between the CILAD and the OCERTID, which are both also<br />
inter-ministerial structures, is inadequate. The OCERTID should play its role as coordinator of narcotic<br />
control better by centralizing data on this activity. To this end, there is a need for better collaboration<br />
among agencies involved in the control of narcotics, particularly and as an initial step, by appointing<br />
liaison officers at the OCERTID. This would facilitate the keeping of statistics.<br />
1013. On the other hand, there does not appear to be any cooperation problem with CENTIF in view of<br />
effective establishment of its networks of counterparts (whose formal appointment is yet to be made) in<br />
the Administrations. However, the provision of information by the Customs Department, particularly<br />
concerning cross-border physical transportation of currency should be activated.<br />
Additional elements-Mechanisms of consultation between competent authorities, the financial sector<br />
and other sectors (C.31.2)<br />
1014. There is no consultative mechanism between the competent authorities, the financial sector and<br />
other sectors (including END).<br />
6.1.2 Recommendations and Comments<br />
1015. The authorities should:<br />
� formally institute effective mechanisms of cooperation and coordination of their AML/CFT<br />
activities at national level<br />
� regularly assess the effectiveness of such mechanisms<br />
� put in place mechanisms of consultation between Government services and the actors of the<br />
AML/CFT system, particularly in the financial sector and that of CNFBP<br />
6.1.3 Compliance with Recommendation 31<br />
Rating Summary of Factors Underlying Rating<br />
-Absence of formal cooperation and coordination mechanisms<br />
R.31 PC -Inadequate information sharing and cooperation on AML domestically<br />
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6.2 UNITED NATIONS CONVENTIONS AND SPECIAL RESOLUTIONS (R.35 &<br />
SR.I)<br />
6.2.1 Description and Analysis<br />
Recommendation 35<br />
Ratification of Anti-Money Laundering Conventions (C.35.1)<br />
1016. Benin has ratified the following AML conventions:<br />
- The United Nations Convention against Illicit Trafficking in Narcotics and Psychotropic<br />
Substances, concluded on 20 December 1988 in Vienna (Vienna Convention), ratified on<br />
23 May 1997;<br />
- United Nations Convention against Transnational Organized Crime of 15 December 2000<br />
(Palermo Convention), ratified on 30 August 2004;<br />
1017. Although the authorities met with claimed that instruments for the ratification of these<br />
Conventions were available by the evaluation team was unable to ascertain this. Based on the provisions<br />
of these two conventions, in July 1997 Benin passed Act 97-025 of 18 July 1997 establishing the control<br />
of narcotic drugs and precursors in 2006 and Act 2006-14 of 31 October 2006 on anti-money laundering.<br />
Through these laws, the provisions of the two conventions were largely incorporated in the national<br />
legislation.<br />
1018. The drug and precursors control law entered into force in 1997 and it is regularly enforced by the<br />
relevant agencies. Statistics provided to the evaluation team show that drug seizures occur. However, the<br />
prosecution agencies appear not to be interested in the proceeds of crime as the absence of statistics on the<br />
freezing, seizure or confiscation of proceeds from this type of crime shows.<br />
1019. Although the AML Act has been passed, it does not include all the provisions contained in the<br />
United Nations Convention against Transnational Organized Crime of 2000 known as the Palermo<br />
Convention.<br />
Additional elements –Ratification and Implementation of Appropriate International Conventions<br />
C.35.2)<br />
Special Recommendation I<br />
Ratification of Conventions related to the AML (C.I.1)<br />
1020. Benin has ratified the International Convention for the Suppression of the Financing of Terrorism<br />
on 30 August 2004, the Convention for the Suppression of Terrorist Bombing, on 31 July 2003, the OAU<br />
Convention on the Prevention and Combating of Terrorism, 1 st March 2004.<br />
1021. Benin has not yet transposed the WAEMU Guideline on the combating of the financing of<br />
terrorism into national law. The relevant bill is at the Supreme Court for approval.<br />
Implementation of Resolutions 1267 and 1373 (C.I.2)<br />
177
1022. United Nations Security Council Resolutions (1267 and 1373) are direct application.<br />
1023. With regard to Resolution 1267 (1999), it was implemented by Regulation 14/2002/CM/UEMOA<br />
of 19 September 2002, on the freezing of funds and other financial resources as part of the fight against<br />
the financing of terrorism in WAEMU member-States. This Community Regulation sets out the principles<br />
of the said freeze which is backed by Decisions issued periodically by the Council of Ministers based on<br />
lists drawn up by the United Nations Security Council under this Resolution. In practice, the lists<br />
established by decision of the Council of Ministers are addressed to the BCEAO which communicates<br />
them to credit establishments for application. The Security Council lists as well as those drawn up by<br />
some countries reach relevant financial institutions through other channels (ministries or foreign<br />
embassies).<br />
First, this dissemination appears to be limited and, secondly, it is not intended for other financial<br />
resources, which does not follow the requirements of Resolution 1267.<br />
1024. On the other hand, Resolution 1373 (2001) has not been subjected to any application<br />
.<br />
6.2.2 Recommendations and Comments<br />
1025. Benin should:<br />
� implement the Vienna and Palermo Conventions more fully;<br />
� Implement the International Convention for the Suppression of the Financing of Terrorism.<br />
� Transpose the WAEMU Guideline on AML into national law.<br />
� Implement more fully Resolution 1267(1999).<br />
� Implement Resolution 1373(2000).<br />
6.2.3 Compliance with Recommendation 35 and Special Recommendation I<br />
Rating Summary Underlying Rating<br />
R 35 PC Partial implementation of Vienna and Palermo Conventions.<br />
Non-implementation of the International Convention for the Suppression of<br />
the Financing of Terrorism, due to the non transposition of the WAEMU<br />
SR I NC<br />
Ad Hoc Guideline.<br />
Partial implementation of Resolution 1267(1999)<br />
Non-implementation of Resolution 1373 (2001)<br />
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6.3 MUTUAL LEGAL ASSISTANCE (R.32, 36-38, SR.V)<br />
6.3.1 DESCRIPTION AND ANALYSIS<br />
Legal Framework<br />
� Benin has signed cooperation and mutual legal assistance with OCAM countries (12 September<br />
1961), member-States of the Council of the Entente (20 February 1997), France, ECOWAS<br />
member-States (Mutual Legal Convention and Extradition Convention), the quadripartite<br />
agreement between Ghana, Nigeria, Togo and Benin of 1984;<br />
� Articles 53 to 70 of the AML Act and Articles 12 to 16 of the International Convention for the<br />
Suppression of the Financing of Terrorism (ratified on 30 August 2004), provide responses to the<br />
concerns expressed in Recommendation 36 (36.1 to 36.7);<br />
� Law of 10 March 1927 on extradition defines the principles of extradition in Benin;<br />
Recommendation 36<br />
The range of AML/CFT mutual assistance measures (C. 36.1) Application of the powers of<br />
competent authorities prescribed by R28 (C.36.6 and 36.8-Additional element)<br />
1026. The AML Act provides for a range of unconditional legal assistance measures, and at the request<br />
of a third party state, subject to reciprocity.<br />
In all cases, mutual assistance encompasses:<br />
� Gathering testimonies or statements<br />
� Making detained persons or other persons available for testimony or assistance in conducting<br />
investigations;<br />
� Providing legal documents;<br />
� Carrying out searches and seizures;<br />
� Examination of objects and inspection of places<br />
� Providing information and exhibits;<br />
� Providing the originals or certified true copies of relevant files and documents including banking,<br />
accounting and business records.<br />
� Article 54 of the AML Act indicates the form of request (written) as well as the list of<br />
documentary elements that must accompany it.<br />
Timely, constructive and effective mutual assistance (C.36.1.1)<br />
1027. According to the authorities met, although the AML measures are conventional, they have not yet<br />
been tested as part of implementation, since no case has yet been presented.<br />
179
1028. But the Beninese authorities affirm that once a request for mutual assistance meets all the required<br />
conditions, there is no reason why it should not be granted in a timely, constructive and effective manner.<br />
In practice, it is generally the requesting country that is responsible for the shortcomings (insufficient<br />
exhibits justifying the request for additional assistance).<br />
Mutual legal assistance not subjected to unreasonable, disproportionate or unduly restrictive<br />
conditions (C.36.2)<br />
1029. Reasons for refusal of assistance are outlined by Article 55 of the AML Act:<br />
� Irregular transmission or transmitted by non competent authority;<br />
� Risk of breaching public peace, sovereignty, security or fundamental principles of law;<br />
� Acts already subject of a criminal prosecution or have been definitively judged<br />
� Measures requested or analogous measures are not authorized or are not applicable to the offence<br />
cited in the requested;<br />
� The money laundering offence has lapsed under Beninese law or that of the requesting country;<br />
� The decision is not legally enforceable;<br />
� Foreign decision was not backed by adequate guarantees of the rights of the defendant;<br />
� Measures requested are motivated solely by considerations of race, religion, nationality, or ethnic<br />
origin.<br />
Clear and efficient processes for the execution of mutual legal assistance requests (C.36.3)<br />
1030. The provision of the AML Act is clear and, therefore, likely to enable effective cooperation<br />
without unnecessary delay.<br />
1031. However, the regulations make reference to a “competent authority” without specifying the entity<br />
to which the request should be addressed. But the Beninese authorities stated that, in legal matters, it is the<br />
Ministry of Justice which is mandated to do so, as is the case in most countries in the sub-region. The<br />
modalities for mutual legal assistance with regard to money laundering are not likely to cause<br />
unreasonable delays in the country.<br />
1032. Furthermore, the evaluation team was unable to assess the actual efficiency of the system in the<br />
absence of effective implementation.<br />
Mutual legal assistance on fiscal matters (C.36.4)<br />
1033. There is no clarification as to whether the fact that the offence relates to fiscal matters could be<br />
ground for the refusal of mutual legal assistance. Be that as it may, the cases of refusal listed above do not<br />
include fiscal matters. In this regard, in principle, the Beninese authorities cannot turn down a request of<br />
mutual legal assistance based solely on fiscal matters.<br />
180
Refusal of mutual legal assistance based on laws imposing secrecy or confidentiality (C.36.5)<br />
1034. Professional secrecy cannot be grounds for refusal to execute a request for mutual legal assistance<br />
as stipulated in Article 55 paragraph 2 of the AML Act.<br />
C. 36.7 Jurisdictional conflicts<br />
1035. Although Article 47 of the AML Act authorizes the transfer of prosecutions, the act makes no<br />
provision for a mechanism that can be used to determine the appropriate venue for prosecutions in case of<br />
conflict of jurisdiction.<br />
Special Recommendation V<br />
1036. In the absence of national legislation incriminating the financing of terrorism, mutual legal<br />
assistance in respect of CFT is not possible.<br />
R.37 Dual Criminality<br />
Dual criminality and mutual legal assistance (C.37.1 and 37.2)<br />
1037. The AML Act does not expressly state dual criminality as a condition of the execution of a request<br />
for mutual legal assistance.<br />
1038. But Article 553 of the Penal Procedure Code (CPP) stipulates that “Any citizen of Benin who has<br />
committed an offence outside the country which is recognized as such by Beninese law may be prosecuted<br />
and tried by Beninese courts, if the offence is punishable by the country in which the offence was<br />
committed”. Interestingly, this provision of the CPP does not specify the crime.<br />
1039. Article 554 of the CPP deals with the issue of “anyone who, while in Benin, is an accomplice of a<br />
crime or an offence committed outside the country”. In such a case, the suspect may be prosecuted and<br />
judged by Beninese courts only “if the offence is punishable by both the foreign law and that of Benin and<br />
if it is definitively deemed to be a crime or an offence by the foreign jurisdiction”.<br />
1040. By virtue of this provision of common law, dual criminality appears to be applicable to mutual<br />
legal assistance in cases of offences committed outside the country.<br />
1041. Notwithstanding the existence of the principle of dual criminality in Benin (as in most democratic<br />
countries), the authorities informed the evaluation team that this rule would be interpreted in a flexible<br />
manner in the context of money laundering. It is worth noting that the AML Act (which does not expressly<br />
make dual criminality an impediment), is consistent in all the eight WAEMU member-States, which<br />
indicates that the dual criminality condition needs to be qualified.<br />
1042. The criminality of the predicate conduct of the offence is determined by the law (even though not<br />
all predicate offences of money laundering are considered as specific offences in Benin as indicated<br />
above). With regard to legal and practical impediments resulting from technical differences between the<br />
laws of countries concerned by the mutual assistance, it is for the jurisprudence to resolve such problems<br />
since it is a characterization which can be made only by the judges. Since the passing of the AML Act in<br />
2006, Benin has not experienced such cases and there is no precedent in this regard.<br />
181
NB: for more details on extradition, cf. Section 6.4<br />
Special Recommendation V<br />
1043. For the specific case of mutual legal assistance in the financing of terrorism, the foregoing<br />
remarks are still valid. It is worth noting, however, that this offence is not yet a crime in Benin.<br />
Recommendation 38<br />
Mutual legal assistance requests from foreign countries related to provisional or confiscation<br />
measures (C.38.1)<br />
1044. The ECOWAS Extradition Convention A/P1/8/94 of 6 August 1994 and the AML Act deal<br />
extensively with requests for identification, freezing, seizure or confiscation. The ECOWAS Convention<br />
and Article 62 of the AML Act mention “exhibits” (intended to cover all proceeds of the crime), with<br />
regard to search and seizure. Article 63 on request for confiscation involving “an asset constituting the<br />
proceeds or instrument of one of the offences defined by the law”. It is worth noting that these articles of<br />
the AML Act do not expressly mention “instruments used” and “instruments intended to be used to<br />
commit a given offence” related to money laundering, financing of terrorism or any other predicate<br />
offence. However, the concept of “exhibits” is wide enough to cover this relative loophole. It is worth<br />
considering that, in any event, the provisions of the AML Act may be complemented with those of the<br />
general law (penal code and penal procedure code).<br />
Application of relevant measures to property of corresponding value (C.38.2)<br />
1045. The AML Act does not expressly provide for the application of measures pertaining to the<br />
identification, freezing, seizure or confiscation, where the request relates to assets of corresponding value.<br />
1046. The authorities informed the evaluation team that although in practice, for one reason or another,<br />
assets into which laundered money has been converted cannot be seized, the judge could still order the<br />
confiscation of assets of corresponding value and have it executed on the property of the accused. But the<br />
team was not informed about the existence of a precedent that has been applied to predicate offences.<br />
Coordination of seizure and confiscation actions with other countries and sharing of confiscated<br />
assets (C.38.3 and 38.5)<br />
1047. There is no coordination arrangement with other countries for the seizure and confiscation of<br />
assets.<br />
1048. Pursuant to Article 66 of the AML Act related to the outcome of confiscated assets, a country may<br />
dispose of assets confiscated on its territory at the request of the foreign authorities, unless an agreement<br />
with the requesting government decides otherwise. To date, Benin has not yet signed any such agreement<br />
with another country. In the absence of an agreement, the State of Benin remains the sole owner of<br />
confiscated assets.<br />
C.38.4 Funds for seized or confiscated assets<br />
1049. The AML Act does not provide for the establishment of such a fund to receive seized or<br />
confiscated assets.<br />
182
Special Recommendation V<br />
1050. None of the above-mentioned AML provisions can be applied in the absence of any reference to<br />
the financing of terrorism and the specific ad hoc law. The transposition into national law of the WAEMU<br />
CFT Guideline can help address this issue.<br />
R.32 Statistics<br />
1051. Statistics were provided by the judicial authorities, but they do not include elements pertaining to<br />
mutual legal assistance in the area of AML.<br />
6.3.2 Recommendations and Comments<br />
1052. To a large extent, the mutual legal assistance put in place by Benin makes it possible to provide<br />
assistance to foreign countries since the grounds for refusal outlined are those that are generally allowed.<br />
However, for the mechanism to be complete, the Beninese authorities should:<br />
� Strengthen the mechanisms to make it possible to provide more timely assistance;<br />
� Set up a mechanism to determine the venue of the seizure in case of conflict of jurisdiction;<br />
� Clarify the criminality of the predicate conduct;<br />
� Set up provisional measures for the confiscation of assets of corresponding value;<br />
� Institute a fund for seized and confiscated assets, notably to finance the cost of prosecution or<br />
welfare institutions for the victims<br />
� Provide for the sharing of assets as part of cooperation and coordination efforts with other<br />
countries.<br />
6.3.3 Compliance with Recommendations 32, 36, 37, 39 and Special Recommendation V<br />
Rating Summary of Factors Underlying Rating<br />
R 36 LC Lack of determination of venue of seizure in case of jurisdictional conflict<br />
Lack of statistics making the assessment of implementation and<br />
effectiveness of the mechanism difficult<br />
R 37 LC Lack of clarification of the criminality of the predicate conduct and<br />
removal of legal and practical impediments affecting the mutual legal<br />
assistance<br />
R 38 PC Absence of provisions on the seizure and confiscation of assets of<br />
corresponding value<br />
Lack of mechanism for the coordination of initiatives with other countries<br />
Lack of funds for seized and confiscated assets<br />
Absence of provisions on sharing of assets with other countries in case of<br />
coordination<br />
SR V NC Absence of law on financing of terrorism.<br />
183
6.4 EXTRADITION (R. 37 & 39, & RS.V)<br />
6.4.1 ANALYSIS AND DESCRIPTION<br />
Legal Framework<br />
� The Franchise Act of 10 March 1927 relative to the extradition of foreigners promulgated in<br />
French West Africa by Order of 10 March 1927;<br />
� OCAM General Convention on Judicial Cooperation between member-States of 12 September<br />
1961;<br />
� Extradition Convention A/P1/8/94 of the Economic Community of West African States of 6<br />
August 1994;<br />
� International Convention for the Suppression of the Financing of Terrorism.<br />
Recommendations 39 and 37<br />
Money laundering as an extraditable offence- Effects of dual criminalization (C.39.1 and R37.2)<br />
1053. According to the AML Act, money laundering is an extraditable offence. Article 71 of the<br />
conditions of extradition stipulates as follows: “Shall be subject to extradition:<br />
- Persons prosecuted for the offences indicated by this Act irrespective of the duration of the<br />
sentence to which they may be liable on the national territory;<br />
- Persons, who in respect of the offences described in this Act, are sentenced once and for all by the<br />
courts of the requesting country, irrespective of the need to take into account the sentencing.<br />
(paragraphl.1).<br />
1054. However, paragraph 2 also poses the principle of dual criminalization in stipulating that “it shall<br />
not be exempt from the rules of the general law governing extradition, especially those pertaining to<br />
dual criminalization”.<br />
1055. On this point, Article 3 of the franchise law of 10 March 1927 on the extradition of foreigners,<br />
which is still applicable in Benin indicates that “extradition shall be granted only where the offence,<br />
grounds for the request, has been committed … outside the territory of the requesting country by a nonnational<br />
of the said country, if the offence is classified among those whose prosecution is authorized in<br />
France, even though they may have been committed by a foreigner outside the country’.<br />
Extradition of its own nationals by a country (C.39.2 (a)<br />
The AML Act is silent on this point.<br />
1056. Article 5 of the Franchise Act of 10 March 1927 on the extradition of foreigners, not yet repealed<br />
by Benin, stipulates that extradition shall not be granted: “Where a person who is the subject of the<br />
request, is a French citizen or protégé, with the status of citizen or protégé being determined at the time of<br />
offence for which the extradition is being requested”. On this basis, Benin has not extradited its nationals.<br />
184
Cooperation in the prosecution of its own nationals (C.39.2 (b) “Aut dedere, aut judicare” and<br />
C.39.3)<br />
1057. The provisions of Article 47 of the AML Act allows Benin to apply the principle of "aut dedere,<br />
aut judicare" (extradite or arbitrate) by assuming responsibility for prosecuting the suspect at request<br />
of a WAEMU member country or a third party country on the condition of reciprocity.<br />
1058. The request for extradition to the Beninese authorities is accompanied by documents, evidence,<br />
items and information in the possession of the Authority of the requesting country. Pursuant to Article 48<br />
of this same, the Beninese authorities may refuse the request if on the date of dispatch of the request,<br />
criminal proceedings have closed or if a final ruling has already been made in the case against the<br />
interested party in accordance with the rule of “non bus in idem". Prosecutions completed in the<br />
requesting country remain valid in so far as they are compatible with the current legislation of Benin.<br />
1059. The competent authorities inform the requesting country about the outcome of the process<br />
together with copies of any past final court decision (Article 50).<br />
Effectiveness of extradition procedures (C.39.4)<br />
1060. The evaluation team was unable to assess the effectiveness and efficiency of the procedures due to<br />
the non-existence of executed cases of money laundering and statistics concerning cases of extradition in<br />
respect of predicate offences.<br />
Additional element – Existence of simplified extradition procedures (C. 39.5)<br />
1061. Article 72 of the AML Act lays out a simple procedure by which requests are sent directly to the<br />
Principal Public Prosecutor with copies for information to the Minister of Justice. In contrast, the<br />
simplified procedure of access to criminal records stipulated in Article 61 of the AML Act as part of<br />
mutual legal assistance does not appear to be applicable to extradition.<br />
Special Recommendation V<br />
1062. None of the aforementioned provisions of the AML Act relating to extradition can be applied in<br />
the absence of any reference to the financing of terrorism and the specific ad hoc act. Transposing the<br />
WAEMU AML Guideline into national law will help resolve this issue.<br />
6.4.2 Recommendations and Comments<br />
1063. The current arrangement in Benin on extradition appears to be adequate and in line with<br />
international standards. Subject to effective application, it can provide significant assistance to requesting<br />
foreign countries.<br />
1064. However, the Authorities should endeavour to:<br />
185
- Relax the condition of dual criminalization so that it does not become an impediment to the<br />
execution of the measures;<br />
- Provide clarifications on the issue of criminalization of the predicate conduct and removal of legal<br />
and practical impediments that may hamper extradition;<br />
- Establish statistics to render the system of extradition effective;<br />
- Pass the law on the financing of terrorism to enable extradition related to this kind of offence.<br />
6.4.3 Compliance with Recommendations 37, 39 and Special Recommendation V<br />
Rating Summary of Factors Underlying Rating<br />
R 37 LC Lack of clarification of the criminalization of the predicate conduct and<br />
removal of legal and practical impediments that may affect extradition<br />
R 39 LC In the absence of statistics it is not make possible to assess the effectiveness<br />
of the system of extradition<br />
SR V NC The law on the financing of terrorism has not been passed, which makes<br />
extradition for the offence impossible.<br />
6.5 OTHER FORMS OF INTERNATIONAL COOPERATION (R.<br />
40, RS.V & R.32)<br />
LEGAL FRAMEWORK<br />
� ECOWAS Criminal Police Cooperation Agreement;<br />
� Protocol on Creation of the Regional Criminal Investigation Agency.<br />
DESCRIPTION AND ANALYSIS<br />
Recommendation 40 (C.40.1 to 40.9)<br />
Range of international cooperation measures (C40.1)<br />
1065. In accordance with the relevant provisions of international agreements and conventions, as well<br />
as national regulations, notably the AML Act and the decree establishing CENTIF, the relevant Beninese<br />
authorities are in a position to grant their foreign counterparts a broader condition than a mere request<br />
from such countries, subject to reciprocity.<br />
Cooperation between criminal prosecution agencies<br />
1066. The INTERPOL network places cooperation systems and mechanisms at the disposal of the<br />
Gendarmerie.<br />
186
1067. The authorities mentioned spontaneous information sharing with foreign countries, notably<br />
through the National Central Bureau (BCNC).<br />
1068. On the basis of a Memorandum, Benin has been cooperating with Nigeria and joint surprise and<br />
permanent patrols are organized in some border areas at risk (Operation “Fire to Fire”).<br />
1069. Furthermore, Beninese security services exchange information with their counterparts in border<br />
countries as part of an agreement signed in Lome between Nigeria, Togo, Ghana and Benin.<br />
1070. Other agreements signed at the level of ECOWAS underpin this sub-regional cooperation,<br />
especially the ECOWAS Criminal Police Cooperation Agreement and the 2006 Protocol of 2006 on the<br />
Creation of the Regional Criminal Investigation Agency within ECOWAS.<br />
Customs Cooperation<br />
1071. Benin is a member of the World Customs Organization (WCO). Also, there is direct cooperation<br />
between Beninese customs officers and their foreign counterparts through the Custom Enforcement<br />
Network (CEN) aimed at preventing, searching and punishing customs offences (but not those related to<br />
the AML Act). Furthermore, there are agreements at sub-regional level but it does not appear that such<br />
cooperation instruments have already been used under the AML/CFT.<br />
Cooperation between FIUs<br />
1072. Articles 23 and 24 of the AML Act, incorporated in the decree establishing CENTIF, enjoins the<br />
latter to communicate, at the request of a CENTIF of a WAEMU member country, any information and<br />
data related to investigations conducted following the declaration of suspicion at national level. Subject to<br />
reciprocity, the same provisions are applicable to third-party countries. To this end, CENTIF Benin has<br />
already shared information with two CENTIFs in the sub-region.<br />
1073. Concerning the FIUs of third-party countries, CENTIF may, subject to reciprocity, share<br />
information with them, where the latter are subjected to similar professional secrecy obligations. To this<br />
end, CENTIF is planning to enter into an agreement with TRACFIN in France, to which CENTIF<br />
members have already made preliminary visits. A prior authorization by the Minister of Finance is<br />
required for information sharing agreements.<br />
1074. In its 2009 first quarter activity report, CENTIF indicates that “the lack of international<br />
recognition which prevents it from obtaining information from other countries constitutes a major<br />
impediment to the analytical work carried out”.<br />
1075. Hence, to accomplish its mission it is urgent and necessary that CENTIF, with assistance from the<br />
national authorities, implements measures that would enable it to gain international recognition which it<br />
currently lacks, notably by joining the EGMONT Group (cf. also Section 2.5).<br />
Cooperation between Supervisors<br />
In the Banking Sector<br />
1076. At regional level, BCEAO is represented on the CREPMF Board and is a member of the<br />
Association of Central African Banks (ABCA.<br />
187
1077. The Banking Commission (BC) has signed a cooperation agreement with the Central Bank of<br />
Guinea and a convention with the Banking Commission of Central Africa (COBAC). The initial meetings<br />
between these two supervisory bodies under the convention were held in 2008, according to the annual<br />
report of the BC.<br />
1078. In addition, BC is a member of the Committee of Banking Supervisors of West and Central<br />
Africa (CSBAOC) whose 14th general meeting held in October 2008 in Banjul considered the way<br />
forward in the area of AML supervision (see 2008 Annual Report)<br />
1079. At international level, a Cooperation Agreement exists between the French Banking Commission<br />
and the BC is a member of the Group of Francophone Banking Supervisors created by Central Bank<br />
Governors of the of 34 countries including France. The Group collaborates with the Basel Committee.<br />
They also have ties with the World Bank which, as part of the evaluation of the West African financial<br />
system at regional level including a component on AML/CFT, works in relation with the BCEAO<br />
Banking Commission on issues pertaining to this area.<br />
1080. In the stock exchange sector, CREPMF indicated in its 2008 Annual Report that it actively<br />
participated in various meetings at the international level in the area of financial market regulation,<br />
particularly within the International Organization of Securities Commissions (ISCO) and the Francophone<br />
Institute of Financial Regulation (IFREFI). At the regional level, the Regional Council works in close<br />
collaboration with other Bodies and Institutions of the Union, especially the Central Bank of West African<br />
States (BCEAO), the West African Development Bank (BOAD) and the WAEMU Commission on issues<br />
and subjects related to the financial system of the Union on which the Conference of Heads of State and<br />
the Council of Ministers has provided guidelines.<br />
In the Insurance Sector,<br />
1081. The Inter-African Conference on Insurance Markets (CIMA) and the Regional Council of Public<br />
Savings and Financial Markets (CREPMF) signed a cooperation and information sharing convention on<br />
14 November 2008 in Lome, Togo.<br />
Recommendation 32<br />
1082. The evaluation team was unable to statistics on international cooperation related to AML/CFT.<br />
There does not appear to be ad hoc quantified data.<br />
.<br />
6.5.2 Recommendations and Comments<br />
The Authorities should:<br />
� Pass the law on the transposition of the WAEMU Guideline on anti-money laundering;<br />
� Assist CENTIF to gain international recognition, the absence of which is impeding its cooperation<br />
with foreign countries;<br />
� Put in place an information collection system related to AML/CFT<br />
� Keep reliable and regular statistics on requests for mutual legal assistance received and responses<br />
provided to measure the effectiveness of the cooperation framework.<br />
6.5.3 Compliance with Recommendations 32, 40 and Special Recommendation V<br />
188
Rating Summary of Factors Underlying Rating<br />
R 40 PC Absence of criminalization of FT<br />
Lack of recognition of CENTIF at international level<br />
Absence of system of collection of information relating to international<br />
cooperation on AML/CFT<br />
Lack of statistics<br />
Lack of implementation.<br />
SR.V NC Lack of criminalization of FT impedes other forms of international<br />
cooperation.<br />
7. OTHER ISSUES<br />
7. 1 RESOURCES AND STATISTICS<br />
1083. The description and analysis of Recommendations 30 and 32 are contained in the relevant<br />
portions of the report. Hence an overall rating for each Recommendation that are cross-cutting and<br />
concern several portions of the report.<br />
7.1.1- Resources<br />
Compliance with Recommendation 30<br />
R Rating Summary of Factors Underlying Rating<br />
R30 PC Budget allocation to CENTIF is insufficient and cannot ensure its full autonomy.<br />
CENTIF is understaffed (lack of analysts, IT specialists and support staff).<br />
Investigative and criminal prosecution agencies are well-structured, but woefully<br />
lack financial, human and material resources to adequately handle AML/CFT<br />
matters.<br />
Furthermore, the training of these investigative and prosecution agencies<br />
authorities does not cover AML/CFT, be they judges, public prosecutors, police<br />
officers, customs officials, gendarmes etc. some have not even been sensitized<br />
on the issue.<br />
Resources provided control and supervisory organizations are inadequate. This is<br />
also true for their staff.<br />
189
7.1.2- Statistics<br />
Compliance with Recommendation 32<br />
R Rating Summary of Factors Underlying Rating<br />
R32 PC General lack of statistics on AML/CFT, which makes an assessment of the<br />
effectiveness of the system difficult;<br />
Non-existence of relevant statistics on declaration of suspicion and other<br />
declarations<br />
Absence of statistics on prosecutions and sentencing, freeze, seizure and<br />
confiscation related to AML/CFT.<br />
Absence of statistics on the number of sanctions related to AML<br />
Non-existence of centralization mechanisms at national level of data provided by<br />
the various AML/CFT actors.<br />
Keeping of incomplete statistics on cross-border declaration or communication<br />
of the physical transportation of cash or negotiable bearer instruments.<br />
Lack of detailed statistics on mutual legal assistance and extradition<br />
There are no statistics on international cooperation<br />
Absence of an overall mechanism for assessing the effectiveness of the<br />
AML/CFT system.<br />
7.2 OTHER RELEVANT AML/CFT MEASURES<br />
N/A<br />
22-févr.-10<br />
190
TABLE 1. RATINGS OF COMPLIANCE WITH FATF<br />
RECOMMENDSATIONS<br />
C: Compliant<br />
NC: Non Compliant<br />
LC: Largely Compliant<br />
PC: Partially Compliant<br />
40 Recommendations<br />
Legal System<br />
Rating Summary of Factors Underlying Rating<br />
R1. Money laundering offence PC Absence of criminalization at national level of<br />
insider dealings and market manipulation on<br />
the stock exchange<br />
R2. Mental element and corporate criminal<br />
liability<br />
Lack of clarity on self-money laundering<br />
Enforcement of law not yet efficient<br />
PC Enforcement of law not yet efficient<br />
Difficulties in assessing the proportionality<br />
and dissuasive nature of sentences.<br />
R3. Confiscation and provisional measures LC Absence of arrangements for assets of<br />
corresponding value<br />
Preventive Measures<br />
Impossibility of freezing, seizure and<br />
confiscation of assets related to financing of<br />
terrorism due to lack criminalization of this<br />
offence in the national law.<br />
Lack of implementation of freezing, seizure<br />
and confiscation mechanisms for money<br />
laundering<br />
Lack of statistics<br />
R4. Secrecy laws LC Absence of a mechanism ensuring that<br />
professional secrecy does not impede the<br />
sharing of information between financial<br />
institutions when required.<br />
191
R5. Customer due diligence NC Partial coverage of financial institutions<br />
through anti-money laundering obligations<br />
Absence of regulations prohibiting the keeping<br />
of anonymous accounts<br />
Unduly lenient identification requirements<br />
particularly for beneficial owners<br />
No obligation to maintain constant vigilance<br />
(existing customers and high risk groups)<br />
Poor or lack of knowledge of AML regulation<br />
by those subject to the Act other than banks<br />
R6. Politically exposed persons NC Absence of PEP requirements<br />
R7. Correspondent banking NC Absence of requirements on relations with<br />
correspondent banking.<br />
R8. New technologies and non face-to-face<br />
business<br />
PC Absence of specific arrangements in the AML<br />
Act pertaining to the misuse of new<br />
technologies<br />
Doubts about formal adoption of the Annex to<br />
the AML Act relating to modalities of client<br />
identification in cases of non face-to-face<br />
financial transactions<br />
Failure to adopt AML/CFT policies and<br />
measures needed to prevent misuse of new<br />
technologies and to control specific risks<br />
related to business relationships or transactions<br />
that do not involve the physical presence of the<br />
parties<br />
R9. Third parties and intermediaries NC Lack of clear and comprehensive<br />
requirements in the regulations on the use of<br />
third parties and intermediaries in AML/CFT<br />
matters, although the practice exists<br />
R10. Record-keeping PC Nature and availability of documents to be<br />
kept by credit establishments not specified<br />
R11. Unusual transactions NC Partial or complete lack of knowledge of<br />
requirements<br />
Unconcerned auditors included among<br />
beneficiaries of release of outcome of points<br />
examined<br />
Partial implementation by banks<br />
Not implemented by other banks<br />
192
R12. Designated non-financial businesses<br />
and professions– R.5, 6, 8-11<br />
NC -Lack of awareness by DNFBPs of AML Act<br />
and their attendant obligations due to lack of<br />
dissemination of Act and guidelines.<br />
-Absence of regulation and supervision of<br />
some professions that are vectors of money<br />
laundering (especially real estate agents)<br />
-No customer due diligence (PEP, preventive<br />
measures against misuse of new technologies,<br />
non fact-to-face relationships, use of<br />
introducers, record- keeping).<br />
-Total lack of implementation<br />
R13. Suspicious transaction reporting PC Limitation by AML of STR of money<br />
laundering and financing of terrorism.<br />
No obligation to report attempted operations<br />
Incomplete dissemination of STR templates<br />
Many liable persons are unaware of their STR<br />
obligations<br />
Lack of implementation<br />
R14. Protection and no tipping off LC AML Act vague on FATF requirements due to<br />
the fact that it only deals with STR and other<br />
information made available to<br />
CENTIF relating to the STR.<br />
R15. Internal controls, compliance and<br />
audit<br />
Lack of effectiveness, no STR has since been<br />
fully treated<br />
PC With the exception of banks, no AML internal<br />
system of control has been put in place and no<br />
interim officials have been appointed in most<br />
financial institutions<br />
Limited training and continuing professional<br />
training.<br />
R16. DNFBP – R.13-15 & 21 NC Lack of regulation;<br />
STR requirement limited to ML/FT to the<br />
exclusion of predicate offences<br />
Absence of internal control to prevent money<br />
laundering;<br />
Absence of special attention to countries not<br />
sufficiently applying FATF recommendations;<br />
Absence of AML programmes;<br />
Lack of effectiveness.<br />
R17. Sanctions PC No type of sanction (administrative,<br />
disciplinary or penal) applied since act came<br />
193
into force<br />
Impossibility to assess the actual dissuasive<br />
nature of sanctions in the absence of any<br />
application.<br />
Absence of monetary sanctions for credit<br />
institutions therefore making it difficult to<br />
determine the proportionality of the sanctions.<br />
R18. Shell banks NC No prohibition against operating shell banks;<br />
No requirement prohibiting financial<br />
institutions from entering into a correspondent<br />
relationship with shell banks;<br />
No obligation to ensure that the FI customers<br />
abroad do not authorize SBs to use their<br />
accounts.<br />
R19. Other forms of reporting NC No feasibility or desirability study for the<br />
implementation of a cash transaction reporting<br />
system starting from a given threshold at a<br />
national central agency with computerized<br />
database; no plans to do this.<br />
R20. Other NFBP and secure transaction<br />
techniques<br />
R21. Special attention for higher risk<br />
countries<br />
NC<br />
Incomplete list of businesses and professions<br />
other than DNFBPs<br />
- Lack of awareness of law by subject persons<br />
- Lack of control<br />
- Absence of effective measures to promote the<br />
use of banks and cashless payments.<br />
NC No requirement to pay particular attention to<br />
business relationships with customers residing<br />
in countries that insufficiently or do not apply<br />
FAFT Recommendations<br />
No measure in place to ensure that financial<br />
institutions are advised about noted flaws in<br />
the AML/CFT systems of other countries<br />
There are no counter measures being applied<br />
to countries that do not or insufficiently apply<br />
FAFT recommendations<br />
R22. Foreign branches and subsidiaries NC No requirement for financial institutions to<br />
ensure that company subsidiaries and branches<br />
outside the country comply with AML/CFT<br />
measures<br />
No requirement for FIs to inform supervisory<br />
authorities about a subsidiary or branch outside<br />
the country not complying with AML/CFT<br />
measures<br />
194
R23. Regulation, supervision and<br />
monitoring<br />
R24. DNBP- regulation, supervision and<br />
monitoring<br />
R25. Guidelines and feedback<br />
Institutional and other measures<br />
PC Lack of effective AML monitoring at the level<br />
of microfinance institutions, insurance<br />
companies and the financial market<br />
No prudential regulation applicable to<br />
AML/CFT for insurance companies and stock<br />
market operations.<br />
No formal certification of funds and security<br />
transfer services<br />
Inadequate monitoring and supervision of<br />
money remittance businesses and exchange<br />
bureaux<br />
Difficult to determine the criteria of expertise<br />
and integrity of MFI managers and currency<br />
changers<br />
Numerical strength of foreign exchange<br />
operators in the informal sector;<br />
No implementation<br />
NC Inadequate regulation;<br />
AML regulation not implemented by casinos;<br />
Lack of monitoring by the authorities of<br />
compliance with AML requirements by<br />
PC<br />
casinos and other DNFBPs.<br />
No guidelines for some subject persons<br />
Incomplete nature of some existing guidelines<br />
Non-compliant application or non-application<br />
of existing guidelines<br />
R26. The Financial Intelligence Unit PC Powers of CENTIF do not cover financing of<br />
terrorism;<br />
Ministerial order on suspicion reporting<br />
template not disseminated to all liable entities;<br />
CENTIF counterparts in relevant<br />
administrations not appointed by their<br />
supervisory ministers;<br />
Lack of security standards in head office<br />
premises;<br />
No autonomy guaranteed as a result of<br />
inadequate credits and procedure used<br />
195
Non Egmont Group membership<br />
R27. Law enforcement authorities PC Lack of specialization by judicial structures in<br />
AML (investigative chambers especially) and<br />
insufficient territorial competencies.<br />
R28. Powers of competent authorities LC Not effective<br />
Deferred arrest of suspects or seizure or failure<br />
to undertake such arrests or seizures not<br />
expressly prescribed in AML regulations<br />
R29. Supervisors NC Insufficient and lack of rigour in AML<br />
controls by BC-WAMU in credit institutions<br />
No AML component in controls conducted by<br />
CREPMF<br />
AML issues are not included in controls in<br />
insurance companies by supervisory<br />
authorities<br />
Incomplete supervision of SFD and AML not<br />
covered<br />
Insufficient or lack of control of the entire<br />
currency exchange sector and AML issues<br />
overlooked<br />
R30. Resources, integrity and training PC Insufficient financial, material and human<br />
resources for CENTIF to guarantee its<br />
autonomy.<br />
Lack of or insufficient financial, material and<br />
human resources allocated to investigative and<br />
prosecution agencies to adequately support<br />
AML/CFT activities.<br />
Lack of training in AML/CFT for these<br />
authorities.<br />
Insufficient financial, material and human<br />
resources allocated to CENTIF for control and<br />
supervision organizations.<br />
Insufficient training of their staff<br />
R31. National cooperation PC Absence of formal cooperation and<br />
coordination mechanism<br />
-lapses in information sharing and cooperation<br />
between agencies<br />
196
R32. Statistics PC Lack of general evaluation mechanism for<br />
effectiveness of AML/CFT system.<br />
Lack of mechanism at national level for<br />
centralization of data provided by the various<br />
AML/CFT entities.<br />
No system to determine effectiveness of AML<br />
system;<br />
Lack of statistics especially on breakdown of<br />
STRs analysed and transmitted<br />
Since no ML case has been handled in Benin,<br />
there is no system for the collection of relevant<br />
information in place for the moment<br />
Since the financing of terrorism is currently a<br />
criminal offence, no relevant information<br />
collection mechanism is in place<br />
No statistics since the 2006 law. This makes<br />
it difficult to assess the effectiveness of the<br />
system<br />
Partial or lack of statistics on regular capital<br />
inflows and outflows in cross-border reporting<br />
or communication.<br />
No system of collection of relevant statistics<br />
on suspicious transaction and other reporting<br />
Lack of statistics on the number of sanctions<br />
by BC, at least partially, on breaches of AML<br />
standards<br />
Lack of detailed statistics on mutual legal<br />
assistance and extradition<br />
No statistics on international cooperation<br />
There are no statistics regarding cases of<br />
prosecution, sentencing, freezing and<br />
confiscation related to AML/CFT.<br />
R33. Legal persons beneficial owners NC Lack of monitoring of compliance with<br />
OHADA requirements<br />
Unreliability of information contained in<br />
RCCM.<br />
Information not always up-to-date<br />
Information contained in RCCM not adequate<br />
enough to identify beneficial ownership;<br />
Lack of measures to avert the misuse of legal<br />
entities who issue bearer shares for money<br />
197
R34. Legal arrangements – beneficial<br />
owners<br />
International cooperation<br />
N/A<br />
laundering purposes.<br />
R35. Conventions PC Partial implementation of Vienna and Palermo<br />
Conventions.<br />
R36. Mutual legal assistance LC Place of prosecution in the event of<br />
jurisdictional conflict is not determined<br />
Lack of statistics<br />
R37. Dual criminality LC Lack of clarification of the criminality of<br />
predicated conduct and removal of legal and<br />
practical impediments affecting mutual legal<br />
assistance<br />
R38. Mutual legal assistance confiscation<br />
and freezing<br />
PC No provisions on seizure and confiscation of<br />
assets of corresponding value<br />
Lack of mechanism for coordination of<br />
initiatives with other countries<br />
No funds for seized and confiscated assets<br />
No arrangements on sharing of assets with<br />
other countries<br />
Lack of statistics<br />
R39. Extradition LC Lack of statistics to assess the effectiveness of<br />
extradition mechanism<br />
R40. Other forms of co-operation PC No system of information collection relating to<br />
international cooperation in the area of<br />
AML/CFT.<br />
Nine Special Recommendations<br />
No implementation.<br />
Lack of statistics<br />
SR.I Implement UN instruments NC Failure to implement International Convention<br />
on the Suppression of the Financing of<br />
Terrorism due to absence of law on financing<br />
of terrorism<br />
Partial implementation of Resolution<br />
1267(1999)<br />
Non-implementation of Resolution 1373<br />
(2001)<br />
198
SR.II Criminalize terrorism financing NC Absence of criminalization of terrorism due<br />
to non-transposition of relevant WAEMU<br />
Guideline.<br />
SR.III Freeze and confiscate terrorist<br />
assets<br />
NC Incomplete nature of mechanism for freezing<br />
of funds under Resolution 1267 (1999<br />
Non implementation of Resolution 1373(2001)<br />
SR.IV Suspicious transaction reporting NC No obligation to report FT-related operations<br />
SR.V International cooperation NC Law on financing is not passed<br />
SR VI AML/CFT requirement for<br />
money/value transfer services<br />
SR VII AML requirements for<br />
money/value transfer services<br />
NC No authorization for undertaking the<br />
profession<br />
Lack of direct submission to AML Act<br />
No control mechanism<br />
No list of money/value transfer agents<br />
Absence of sanctions<br />
NC No law on CFT due to non transposition of<br />
relevant WAEMU Guideline.<br />
No restrictive arrangements on SR VII<br />
requirements, notably full information on<br />
originator and control of compliance.<br />
SR.VIII non-profit organizations NC Lack of awareness by NPOs of AML Act<br />
No supervision of NPOs in respect of AML ;<br />
Lack of sensitization of NGO sector<br />
Legal vacuum with regard to CFT<br />
SR. IX<br />
NC Law on financing of terrorism not passed,<br />
Cross-border declaration or disclosure<br />
WAEMU residents do not have to disclose<br />
cross-border physical transportation within<br />
WAEMU zone of cash or bearer negotiable<br />
instruments issued by the BCEAO<br />
There is no formal framework of collaboration<br />
between Customs and CENTIF for<br />
communicating statistics on cross-border<br />
transportation of currency and negotiable<br />
instruments.<br />
Violations uncovered by Customs are<br />
considered solely as customs offences and<br />
treated in accordance with customs rules.<br />
199
TABLE 2: RECOMMENDED ACTION PLAN FOR IMPROVING<br />
THE AML/CFT SYSTEM<br />
40 + 9 FATF<br />
Recommendations<br />
Legal System and Institutional Measures<br />
Scope of enforcement of the<br />
money laundering offence (R<br />
1, R 2)<br />
Criminalization of terrorist<br />
financing (SR II)<br />
Confiscation, freezing and<br />
seizing of property of criminal<br />
origin (R3)<br />
Confiscation of proceeds of<br />
crime or assets used for<br />
terrorist financing (SR III)<br />
Financial Intelligence Unit<br />
(R26)<br />
Principal Recommendations<br />
The Beninese authorities should:<br />
- Criminalize migrant trafficking in a more extensive<br />
manner;<br />
- Criminalize terrorism and its financing, insider dealing and<br />
manipulation of the market;<br />
- Clarify self-money laundering;<br />
- Implement measures needed to render the enforcement of<br />
the AML Act effective, notably through its wider<br />
dissemination among authorities in charge of enforcement,<br />
backed by appropriate training;<br />
- Implement measures required to assess the effectiveness of<br />
the AML system.<br />
The law on the transposition of the CFT and WAEMU Guideline should<br />
be passed in order to criminalize the financing of terrorism.<br />
The authorities should take the following steps:<br />
- Include in the legislation mechanisms relating to assets of<br />
corresponding value;<br />
- Enable the freezing, seizure and confiscation of goods<br />
related to the financing of terrorism by criminalizing this<br />
offence in the country’s laws;<br />
- Implement mechanisms for freezing, seizure and<br />
-<br />
confiscation of assets related to money laundering;<br />
Compile and keep statistics.<br />
The freezing measures stipulated in Resolution. 1267 (1999) should be<br />
fully implemented, particularly by expanding the list established by the<br />
United Nations Security Council to include other liable persons .<br />
Resolution 1373 (2001) should be implemented, particularly by<br />
establishing lists at national and sub-regional level<br />
The powers of CENTIF should be extended to cover financing of<br />
terrorism<br />
The dissemination of the template for suspicious transaction reporting<br />
200
Law enforcement, prosecution<br />
and other competent<br />
authorities (R 27, R28)<br />
Cross-border declarations or<br />
disclosure (RS IX)<br />
Preventive Measures Applicable to Financial Institutions<br />
Risk of money laundering or<br />
terrorism financing<br />
determined by a ministerial order should be expanded to include all<br />
subject persons;<br />
The appointment of CENTIF counterparts at level of administrations<br />
concerned should be regularized through ad-hoc decisions by their<br />
Supervisory Minister;<br />
The necessary security standards must be established for access to head<br />
office, protection of members and information held by the FIU<br />
Adequate financial and human resources must be made available to<br />
CENTIF to ensure its autonomy.<br />
Specialized structures should be created in the courts, notably to<br />
investigate AML.CFT cases<br />
The special anti-narcotic techniques defined should include AML/CFT<br />
Resources available to authorities must be significantly strengthened<br />
Specific and relevant training in AML and CFT to investigative and<br />
prosecution agencies including themes covering the scope of predicate<br />
offences, typologies of money laundering, investigation techniques and<br />
retracing financial channels etc.<br />
The Authorities should:<br />
� Make the system of disclosure put in place compliant with<br />
requirements;<br />
� Institute a formal framework of collaboration between<br />
Customs and CENTIF to communicate statistics on<br />
disclosure of cross-border transport of cash and negotiable<br />
instruments;<br />
� Organize, in a formal manner, the coordination of activities<br />
between customs, immigration and other competent<br />
authorities<br />
� Ensure the full application of Resolution 1267(1999) and<br />
implementation of Resolution 1373 (2001);<br />
� Undertake the early transposition of Guideline<br />
�<br />
N°04/2007/CM/UEMOA<br />
Put in place a computerized database to monitor the crossborder<br />
transportation of currency and negotiable instruments<br />
and a mechanism for the automatic transmission of<br />
information to CENTIF<br />
Customer due diligence: Benin should identify risks and vulnerabilities related to AML/CFT in<br />
201
Identification and record<br />
keeping obligation (R. 5 to 8)<br />
order to define an action plan to mitigate them. The authorities should<br />
endeavour to remedy flaws in the current legislation (particularly some<br />
of the customer diligence obligations) and have the Annex to the AML<br />
Act formally adopted (to be amended to include legal persons) to render<br />
specific requirements for identification with regard to non face-to-face<br />
operations<br />
To that end, the authorities are also urged to institute and impose on<br />
financial institutions:<br />
� the formal and explicit prohibition to hold anonymous or<br />
numbered accounts or in fictitious names;<br />
� clear requirements for the identification of beneficial owners;<br />
� In all cases obtain information on the intended purpose and<br />
nature of the business relationship;<br />
� Due diligence in ensuring constant updating of customer<br />
documents and information;<br />
� The need to maintain a minimum of identification measures<br />
even with regard to financial institutions subjected to the AML<br />
Act:<br />
� The requirement to introduce enhanced measures for higher risk<br />
categories or reduce such measures in cases of lesser risks;<br />
� Due diligence on existing customers for all subject financial<br />
institutions<br />
Recommendation 6<br />
Put in place an adequate system of risk management to improve the<br />
detection and constant monitoring of politically exposed persons<br />
Subject the entry into a relationship with such high risk persons to prior<br />
approval and ensure that the origin of the funds are determined<br />
Recommendation 7<br />
Gather adequate information about a respondent institution (based on<br />
publicly available information) to ascertain whether it has been subject<br />
to AML measures prior to entering into any relationship with it;<br />
Obtain approval from Senior Management before establishing new<br />
correspondent relationships.<br />
Assess respondent institution’s AML/CFT controls and ascertain that<br />
they are adequate and effective.<br />
Specify in writing the internal liabilities with respect to the AML/CFT<br />
system.<br />
Observe prescribed due diligence in the cases of the use of payable<br />
through accounts.<br />
Recommendation 8<br />
Pass legislation on specific measures relating to the misuse of new<br />
202
technologies;<br />
Formal adoption of Annex to AML Act on modalities for customer<br />
identification in case of non face-to-face financial operations<br />
Adoption of policies for the effective implementation of AML/CFT<br />
measures needed to prevent the misuse of new technologies and to<br />
control specific risks related to business relationships or non face-to-face<br />
transactions.<br />
Third Parties (R9) The AML regulations should clearly define conditions authorizing the<br />
use of third parties and intermediaries in AML/CFT matters.<br />
Financial institution secrecy<br />
and confidentiality (R4)<br />
Record keeping and wire<br />
transfers (R10 and RS VII)<br />
When deciding in which countries the third-party who is compliant with<br />
the criteria may be established, the competent authorities should<br />
consider available information ascertaining whether such countries duly<br />
apply the FATF Recommendations.<br />
In the final analysis, responsibility for the identification and verification<br />
of the identity should lie with the financial institution using the third<br />
party<br />
Financial institutions using third parties should:<br />
Immediately obtain from such third parties information pertaining to<br />
customer due diligence (Criteria 5.3 to 5.6).<br />
Take necessary steps to ensure that a third party is capable to provide, on<br />
request and within the shortest possible time, copies of relevant<br />
identification and other documents related to CDD to ensure that the<br />
third party is subjected to regulations and supervision (in accordance<br />
with Recommendations 23, 24 and 29), and that he has taken steps to<br />
comply with CDD measures set out in Recommendations 5 and 10.<br />
The authorities should put in place measures ensuring that laws on<br />
professional confidentiality of financial institutions do not hamper the<br />
sharing of information between financial institutions where it is a<br />
requirement of Recommendations 7 and 9 or Special Recommendation<br />
VII.<br />
Furthermore, in view of the sensitivity of aspects related to financial<br />
institution confidentiality, the authorities should ensure that access to<br />
data covered is strictly limited to needs related to tasks entrusted to the<br />
structures concerned by AML/CFT.<br />
The current regulations should be complemented to ensure consistency<br />
with R10 of the nature of records to be kept by financial organizations<br />
Benin should adopt as early as possible, legal measures for the<br />
implementation of SR.VII, notably by adopting the uniform act on the<br />
transposition of WAEMU Guideline relating to CFT. This act should be<br />
amended to ensure that financial institutions are under obligation to fulfil<br />
all the necessary requirements of R10 especially:<br />
Require, gather and keep, for all transfers, accurate and complete<br />
information on the originators (identity, address and bank account<br />
203
Monitoring of operations (R11<br />
and R21)<br />
Suspicious Transaction<br />
Reporting (R. 13, R14, R19, R<br />
25 and SR IV)<br />
number).<br />
Indicate the nature of records to be kept and their availability<br />
In dealing with unusual transactions, the financial institutions should<br />
ensure the monitoring of each case on individual basis and not in a<br />
single batch.<br />
Implement effective control measures in line with SR VII<br />
The authorities should consider remedying the inadequacies noted and<br />
take the necessary steps for doing so:<br />
Compel financial institutions to pay particular attention with any unusual<br />
operation without any economic rationale irrespective of the sums<br />
involved.<br />
Include auditors among persons who may have access to the outcomes<br />
of the review of complex transactions, involving abnormally high sums<br />
or without any apparent economic rationale.<br />
Pay special attention to business relationships and transactions with<br />
customers residing in the countries that do not implement the FATF<br />
Recommendations<br />
Put in place effective measures to ensure that the financial institutions<br />
are informed of concerns raised in relation to lapses in AML/CFT<br />
mechanisms in other countries.<br />
Introduce counter-measures applicable to countries that do not or<br />
insufficiently apply the FAFT Recommendations<br />
R 13<br />
It is recommended that the Beninese Authorities should:<br />
-extend the STR to include predicate offences as defined by FATF;<br />
-define requirements for reporting attempted operations<br />
-ensure the exhaustive dissemination of STR templates<br />
-ensure that all subjected persons are aware of their STR obligations<br />
-ensure effective implementation<br />
R 14<br />
The authorities must prohibit the disclosure of information on STR to<br />
any third party not duly mandated to have access to it;<br />
CENTIF must take the necessary steps to ensure that STRs received are<br />
handled diligently and in line with the regulations pertaining to<br />
confidentiality in order to assure subject persons. Consequently, the<br />
application of the regulations related to sanctions (Article 40) must be<br />
effective in the event of violation in order to dissuade the subject persons<br />
who would be tempted to intentionally undertake STRs<br />
R 19<br />
The national and/or sub-regional authorities must explore the possibility<br />
of putting in place a system by which financial institutions would report<br />
all cash transactions involving sums higher than a specific amount to a<br />
204
Internal controls, compliance<br />
audit and foreign branches<br />
(R15 and R22)<br />
national agency with computerized database<br />
R25<br />
Guidelines must be formulated for all subjected persons.<br />
The competent authorities, and CENTIF in particular, must provide<br />
designated financial institutions that are required to report suspicious<br />
operations with useful and appropriate feedback in keeping with FATF<br />
guidelines<br />
The competent authorities should:<br />
R.15<br />
- appoint AML officials mandated to gain speedy access to information<br />
and documents as well the necessary resources to carry out their<br />
mission;<br />
- put in place continuing training for the staff;<br />
-define AML/CFT requirements at the time of recruitment;<br />
-ascertain that the internal control system is effectively implemented in<br />
all FIs.<br />
R.22<br />
Introduce for all banks and financial institutions a requirement to ensure<br />
that their foreign branches and subsidiaries apply the AML/CFT<br />
standards and inform their supervisory authorities should they be unable<br />
to uphold the standards.<br />
Shell banks (R18) The authorities should take clear measures to:<br />
Prohibit financial institutions from entering into or maintaining<br />
correspondent bank relationship with shell banks;<br />
Regulation and supervision,<br />
competent authorities and their<br />
powers (R17, R23, R25, R29,<br />
R30)<br />
Ensure that financial institutions belonging to their foreign clientele do<br />
not authorize shell banks to use their accounts<br />
The supervisory authorities (BC-WAMU, BCEAO, CIMA, CREPMF,<br />
and Ministry of Finance) should step up controls of subject persons to<br />
ensure the full implementation of requirements derived from both<br />
national and sub-regional community AML applicable regulations.<br />
The application of AML sanctions must become effective in all sectors<br />
covered by the legislation.<br />
Supervisory authorities should undertake awareness campaigns for the<br />
early establishment of guidelines in all FIs and ensure that they are<br />
effectively implemented. To that end, the Regional Council should adopt<br />
an AML sector guideline for all financial market players.<br />
The resources, particularly human, of the supervisory authorities should<br />
be strengthened to ensure their autonomy and enable them to address the<br />
additional responsibility related to the integration of AML into their<br />
mandates. Special training effort is also indispensable;<br />
205
Alternative remittance (SR VI) The authorities should:<br />
Introduce measures to regulate the delegation of approvals for the<br />
transfer of funds and values by certified intermediaries, particularly by<br />
requiring approval to carry such activities from the competent<br />
authorities (BCEAO, MEF).<br />
Enjoin banks to put in place a mechanism for the control of the activities<br />
of such entities with special emphasis on AML requirements.<br />
Identify actors operating in the sector informally and urge them to<br />
regularize their situation or end their activities or face the relevant legal<br />
sanctions.<br />
Preventive measures applicable to designated non-financial businesses and professions<br />
Customer due diligence and The authorities should take the following steps:<br />
record-keeping (R12)<br />
Ensure the widespread dissemination of the AML Act among subject<br />
DNFBPs<br />
Suspicious transaction<br />
reporting (R16)<br />
Regulation, Supervision and<br />
control (R17, R24 and R25)<br />
Establish guidelines for DNFBPs to facilitate the application of<br />
obligations incumbent on them<br />
Regulate and control professions that are vectors of money laundering,<br />
particularly real estate agencies.<br />
Complement the legislation by including measures related to R6, 8, 9, 10<br />
and 11 as recommended for financial institutions.<br />
Undertake a census of DNFBPs<br />
The recommendations made for financial institutions relative to R 13,14,<br />
15 and 21 (see Section 3 of Report) also apply to DNFBPs<br />
The authorities should:<br />
- ensure that sanctions are applied in cases of violation;<br />
- put in place a regulation to govern the exercise of the profession of<br />
estate manager;<br />
- widely disseminate the AML Act;<br />
Establish guidelines to assist DNFBPs to apply and fulfil their AML<br />
obligations. These guidelines should also include a description of money<br />
laundering techniques and methods and indicate possible additional<br />
measures that the DNFBPs must observe, namely:<br />
Ensure that AML/CFT requirements are observed by casinos and other<br />
DNFBPs<br />
Disseminate the CNETIF activity report by DNFBPs<br />
Take steps to ensure that the control measures are effective;<br />
Organize training and awareness-raising sessions on AML/CFT for<br />
DNFBPs;<br />
206
Other nonfinancial businesses<br />
and professions and modern<br />
and secure transaction<br />
techniques (R20)<br />
Legal persons and arrangements and non-profit organizations<br />
Legal persons – Access to<br />
beneficial ownership and<br />
control of information (R 33)<br />
Legal arrangements – access to<br />
beneficial ownership and<br />
control information (R.34)<br />
The authorities should:<br />
-Complete the list of businesses and professions other than DNFBPs;<br />
-disseminate the AML Act to subject persons other than DNFBPs to<br />
ensure that they are informed about their obligations;<br />
- Ensure that measures for the promotion of the use of banking facilities<br />
and cashless payment methods are implemented<br />
The Beninese authorities should:<br />
� Implement all the OHADA provisions particularly with respect<br />
to the updating of data contained in the RCCM;<br />
� Monitor bearer shares (number of issuers, value and state of<br />
circulation) to ensure that legal persons issuing bearer shares are<br />
not used for money-laundering purposes;<br />
� Ensure that public agencies, particularly revenue collection<br />
agencies obtain more information on foreign companies that<br />
hold shares in Beninese companies<br />
� Verify that notaries fulfil their obligations regarding obtaining,<br />
verifying and keeping documents on actual ownership and<br />
control of legal persons.<br />
NGO (SR VIII) The authorities should:<br />
-.ascertain the adequacy of the current legislation applicable to<br />
associations and NGOs and undertake a specific study to assess the<br />
vulnerability of the sector to AML/CFT risks;<br />
National and International Cooperation<br />
National Cooperation and<br />
Coordination (R31)<br />
. Transpose as early as possible into national law the WAEMU AML<br />
Guideline, particularly to define control and regulatory arrangements for<br />
NGOs and dissuade their misuse for the purposes of financing of<br />
terrorism as part of their of their activities.<br />
Undertake AML/CFT awareness-raising actions with NPOs.<br />
Exercise adequate supervision of NPOs to ensure that they comply with<br />
AML requirements in accordance with the law.<br />
Apply sanctions in case of violation of AML Act.<br />
The authorities should:<br />
Institute in a formal manner effective AML/CFT cooperation and<br />
coordination mechanisms for their activities at national level<br />
Regularly assess the effectiveness of such mechanisms<br />
207
International Conventions and<br />
United Nations Resolutions<br />
(R35 and SR I)<br />
Mutual Legal Assistance (R<br />
32, 36-38 and SR V)<br />
Extradition (R32, 37 and 39,<br />
SR V)<br />
Other forms of cooperation<br />
(R40 et SR V)<br />
Put in place mechanisms of consultation between Government Agencies<br />
and AML/CFT actors particularly in the financial sector and that of<br />
DNFBPs<br />
Benin should:<br />
Implement more fully the Vienna and Palermo Conventions.<br />
Transpose WAEMU CFT Guideline into a national law to enable the<br />
implementation of the International Convention for the Suppression of<br />
the Financing of Terrorism.<br />
Implement more fully Resolution 1267(1999).<br />
Implement Resolution 1373(2000).<br />
The Beninese authorities should:<br />
Strengthen mechanisms to enable the provision of timely assistance;<br />
Provide a mechanism to determine the venue of prosecution in the event<br />
of jurisdictional conflicts;<br />
Clarify the criminalization of predicate conduct;<br />
Introduce provisional measures for the confiscation of assets of<br />
corresponding value;<br />
Institute a fund for seized and confiscated assets, particularly to finance<br />
prosecution or social welfare actions for victims<br />
Make provision for the sharing of assets as part of cooperation and<br />
coordination efforts with other countries<br />
Keep statistics on mutual legal assistance<br />
The authorities should:<br />
Make the condition of dual criminalization more flexible to ensure that it<br />
does not hamper the execution of measures<br />
Clarify the issue of criminalization of predicate conduct and removal of<br />
legal and practical impediments that could hamper extradition<br />
Pass a law on FT to make extradition related to this kind of offence<br />
possible.<br />
Establish statistics to help assess the effectiveness of the extradition<br />
process<br />
The authorities should:<br />
Pass the law on the transposition of the WAEMU Guideline on CFT to<br />
enable cooperation in this area;<br />
208
Assist CENTIF to gain access to international recognition;<br />
Put in place a system of information collection related to international<br />
cooperation on AML/CFT;<br />
Keep reliable statistics on request for mutual legal assistance or<br />
extradition received and responses provided the latter to assess the<br />
effectiveness of the general cooperation framework<br />
209
ANNEX 1: LIST OF AUTHORITIES AND ORGANIZATIONS MET<br />
MINISTRIES (8)<br />
PUBLIC SECTOR PRIVATE SECTOR OBSERVATIONS<br />
- 1-Economy and Finance<br />
-2-Justice, Legislation and Human Rights;<br />
- 3-Interior and Public Security<br />
-4-Foreign Affairs<br />
-5-Trade<br />
-6-Town Planning, Habitat, Land Reform<br />
and Sea Erosion Control<br />
- 7-Tourism and Cottage Industry<br />
-8- Microfinance<br />
OTHER STRUCTURES OR PUBLIC<br />
AUTHORITIES (12)<br />
1-CENTIF<br />
2-BCEAO<br />
3- Inter-ministerial Committee on Money<br />
Laundering<br />
4-Anti-Corruption Observatory<br />
5- General Directorate of Customs<br />
6- General Directorate of National Police<br />
7- General Directorate of National<br />
Gendarmerie<br />
7- General Inspectorate of Ministry of<br />
Justice<br />
8-Presidents of Administrative Chamber<br />
and Chamber of Accounts of Supreme<br />
Court<br />
9- Principal Public Prosecutor at Court of<br />
Appeal<br />
10- Substitut Procureur de la République<br />
Tribunal de 1 ère Instance de 1 ère Classe de<br />
Cotonou<br />
11- Juge d’Instruction du 1 er Cabinet du<br />
Tribunal de 1 ère Instance de 1 ère Classe de<br />
Cotonou<br />
FINANCIAL SECTOR<br />
Banks and FIs:<br />
APBEF-B<br />
*BOA-Benin<br />
*DIAMOND BANK<br />
*EQUIPBAIL<br />
* PADME<br />
*La Poste du Bénin<br />
*Association des Sociétés d’Assurance<br />
Insurance Companies<br />
Union Béninoise d’Assurance-Vie;<br />
Stock Market Actors<br />
Antenne Nationale BRVM<br />
SGI- ACTIBOURSE<br />
Apporteur<br />
Finances<br />
d’Affaires Samadoss<br />
DNFBPs<br />
- Chambre des Notaires<br />
-Ordre des Avocats<br />
- Ordre des Experts Comptables et<br />
Comptables Agréés<br />
-Casino<br />
-Association des Professionnels en<br />
Immobilier-Bénin –APIB-<br />
-SAGAM: Transport de fonds<br />
- Authorized Manual Foreign<br />
Exchange Agency: World Money<br />
Market<br />
-ONG- ALCRER<br />
- Association of NGO Networks in<br />
Benin - CEFRONG<br />
The Minister of<br />
Finance, Minister<br />
of Justice and<br />
Minister of Interior<br />
personally received<br />
members of the<br />
evaluation team.<br />
The Minister of<br />
Justice invited them<br />
to dinner which he<br />
personally<br />
attended.<br />
210
12-Greffe du Tribunal de 1 st Instance de<br />
1 ère Classe de Cotonou - RCCM<br />
- Travel Agency<br />
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ANNEX 2 : LIST OF LEGAL INSTRUMENTS AND OTHER DOCUMENTS<br />
REVIEWED BY EVALUATION TEAM SUPRA-NATIONAL INSTRUMENTS<br />
1. Decision A/DEC/9/12/99, Conference of Heads of State and Government of ECOWAS on the Creation<br />
of the Inter-Governmental Action Group against Money-Laundering in West Africa (<strong>GIABA</strong>)<br />
2. Convention portant création de la Commission bancaire de l’Union Monétaire Ouest Africaine et son<br />
Annexe. (Convention Establishing the Banking Commission of the West African Monetary Union and its<br />
Annex)<br />
3. Convention portant création du CREPMF et son Annexe, (Convention Establishing CREPMF and its<br />
Annex)<br />
4. Règlement Général CREPMF (CRPMF General Regulations)<br />
5. Code CIMA (CIMA Code)<br />
6. Directive CM/UEMOA N° 07/2002 du 19 Septembre 2002, relatif à la lutte contre le blanchiment de<br />
capitaux dans les Etats membres de l’UEMOA (CM/UEMOA Guideline 07/2002 of 19 September on<br />
Anti-Money Laundering in WAEMU States)<br />
7. Acte Uniforme relatif au Droit des Sociétés Commerciales et du Groupement d'Intérêt Economique<br />
(Uniform Act on Commercial Companies and Economic Interest Groups)<br />
8. Règlement R09/CM/UEMOA du 20/12/1998 relatif aux relations financières extérieures Etats membres<br />
de l’UEMOA (article 22 à 29) (WAEMU Regulation R09/CM/UEMOA on external financial relationships<br />
of WAEMU member-States);<br />
9. Règlement N° 15/2002/CM/UEMOA du 19 septembre 2002 relatif aux systèmes de paiement dans les<br />
Etats membres de l’UEMOA (WAEMU Regulation 15/2002/CM/UEMOA on external financial<br />
relationships of WAEMU member-States)<br />
10. Règlement N° 14/2002/CM/UEMOA du 19 septembre 2002 relatif au gel des fonds et autres<br />
ressources financières dans le cadre de la lutte contre le financement du Terrorisme dans les Etats<br />
membres de l’UEMOA (WAEMU Regulation R09/CM/UEMOA on freezing of funds and other financial<br />
resources as part of control of Terrorism Financing in WAEMU member-States);<br />
11. Règlement 00004/CIMA du 04/10/2008 relatif à la lutte contre le blanchiment des capitaux et à la<br />
lutte contre le financement du terrorisme dans les Etats membres de la CIMA (Regulation 00004/CIMA of<br />
4/10/2008 on anti-money laundering and control of the financing of terrorism in CIMA member-States)<br />
12. Décision N° 14 /2006 CM/UEMOA du 08/09/2006 portant modification de la Décision n°<br />
12/2005/CM/UEMOA du 04/07/2005: relative à la liste des personnes, entités ou organismes visés par le<br />
gel des fonds et autres ressources financières dans le cadre de la lutte contre le financement du terrorisme<br />
dans les Etats membres de l’UEMOA; (Decision 14 /2006 CM/UEMOA of 8/9/2008 on the amendment of<br />
Decision12/2005/CM/UEMOA of 4/7/2005 relating to the list of persons, entities or organizations<br />
concerned by the freezing of funds and other resources under the control of the financing of terrorism in<br />
WAEMU member-States)<br />
13. Directive N° 04/2007/CM/UEMOA du 4 juillet 2007 relative à la lutte contre le financement du<br />
terrorisme dans les Etats membres de l’UEMOA (Guideline 4/2007/CM/UEMOA of 4 July 2007 on the<br />
control of the financing of terrorism in WAEMU member-States)<br />
14. Instruction N° 01/2007/RB de la BCEAO du 2 juillet 2007 relative à la lutte contre le blanchiment des<br />
capitaux. (Directive 1/2007/RB of the BCEAO of 2 July 2007 on anti-money laundering)<br />
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15. Instruction Nº 01/2006/SP de la BCEAO du 31 juillet 2006 relative à l’émission de monnaie<br />
électronique et aux établissements de monnaie électronique (Directive 01/2006/SP of the BCEAO on the<br />
issuance of e-money and establishment of e-money)<br />
National Legal Instruments<br />
1. Constitution<br />
2. Loi cadre N° 90-018 du 27 juillet 1990 portant réglementation bancaire en république du Bénin (Parent<br />
Act 90-018 of 27 July 1990 on bank regulation in the Republic of Benin)<br />
3. Loi N° 97-027 du 08 août 1997 portant réglementation des IMCEC<br />
4. Loi N° 86-05 du 26 février 1986 relative aux contentieux des infractions au contrôle des changes.<br />
(Parent Act 86-05 of 26 February on litigations relating to exchange control violations)<br />
5. Loi N° 2006-14 du 31 Octobre 2006 portant lutte contre le blanchiment de capitaux au Bénin (Law<br />
2006-14 of 31 October 2006 on money laundering in Benin)<br />
6. Loi 97-025 du 18 juillet 1997 portant sur le contrôle des Drogues et des Précurseurs (Law 97-025 of<br />
18 July 1997 on the control of Narcotics and Precursors)<br />
7. Décret N° 2006-752 du 31 décembre 2006 portant création, attributions, organisation et<br />
fonctionnement d’une Cellule Nationale de Traitement des Informations Financières (CENTIF); Decree<br />
2006-752 of 31 December 2006 on the creation, powers, organization and functioning of a National<br />
Financial Information Processing Unit (CENTIF)<br />
8. Code Pénal (Criminal Code)<br />
9. Code de Procédure Pénale: (Order 25/PR/MJL of 7 August 1967 on Criminal Code Procedure)<br />
10. Ordonnance N° 54/PR/MFAE/DD du 21-11-1966 portant code des douanes en République du<br />
Bénin (Order 54/PR/MFAE/DD of 21-11-1966 on the customs code of the Republic of Benin):<br />
11. Code Pénal de l’Afrique Occidentale Française (Criminal Code of French West Africa);<br />
12. Code des Douanes (Customs Code)<br />
13. Décret n° 99-141 du15 Mars 1999 portant création et attributions de l’Office Central de Répression<br />
du Trafic Illicite des Drogues et des Précurseurs (OCERTID) (Decree 99-141 of 15 March 1999 on the<br />
creation and powers of the Central Agency for the Suppression of Trafficking of Narcotics and Precursors)<br />
14. Décret N° 2005-812 du 29 décembre 2005 portant nomination de Magistrats (Decree 2005-812 of 29<br />
December 2005 on the appointment of Judges)<br />
15. Décret 2008-248 du 7 mai 2008 portant nomination des membres de la CENTIF. (Decree 2008-248 of<br />
7 May 2008 on the appointment of CENTIF members)<br />
16. Arrêté ministériel 2008 n°120/MEF/CENTIF du 18 février 2009, fixant un modèle de Déclaration<br />
d’Opérations Suspectes (D.O.S) (Ministerial Order 2008 120/MEF/CENTIF of 18 February 2009<br />
defining a Suspicious Transaction Reporting (STR)<br />
Reports and Other Documents<br />
1. Rapport Annuel 2008 de la Commission Bancaire (Banking Commission 2008 Annual Report)<br />
2. Rapport Annuel 2008 du CREPMF (CREPMF 2008 Annual Report)<br />
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3. Transparency International 2008 2009 Annual Report<br />
4. Rapport Semestriel de Surveillance Multilatérale de la Commission de l’UEMOA (Décembre 2008)<br />
(WAEMU Multilateral Supervision Commission Half-Yearly Report December 2008)<br />
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