Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) constitutes the regulatory framework applicable in Cameroon for the purpose of preventing criminals from disguising the proceeds of criminal activity as legitimate funds and forestalling the financial support of terrorist organizations. In accordance with Law No. 01 /CEMAC/UMAC/CM of 11th April 2016, the two main concepts of this aspect are as follows:
- Money Laundering: Money laundering is the process by which funds derived from illegal activities such as drug trafficking, corruption, or organized crime are converted into ostensibly legitimate assets. The process typically proceeds through three distinct stages: placement, layering, and integration.
- Terrorist Financing: The raising, movement, and utilization of funds for the purpose of providing financial resources to terrorists or terrorist organizations.
How Anti Money Laundering and Counter Terrorism Financing Works in Cameroon
- Customer Due Diligence (CDD)/KYC: Financial and regulated institutions are required to verify the identity of their customers, assess the associated risk levels, and ascertain the source of funds prior to the provision of any services.
- Transaction Monitoring: Advanced software systems and trained analysts monitor financial transactions for unusual patterns and large-sum transfers in order to detect and flag potential criminal activity.
- Reporting Obligations: COBAC Regulation R-2023/01 demands that reporting entities shall have internal policies and procedures, put together by management and approved by the board of directors, to manage and mitigate the risks of money laundering and terrorist financing in their business.
- Record Keeping: Obliged entities must retain all customer and transactional records for a minimum of 10 years.
Regulatory and Enforcement Bodies in Cameroon
- ANIF (National Financial Investigation Agency): The National Agency for Financial Investigation (ANIF) serves as Cameroon's Financial Intelligence Unit (FIU) and is vested with the responsibility of receiving, investigating, and analysing Suspicious Transaction Reports (STRs). Further details regarding its operational mandates may be accessed on the ANIF website.
- COBAC (Banking Commission of Central Africa): The regional body responsible for the regulation and supervision of credit institutions, with a mandate to enforce compliance with regional Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) directives. Further information regarding its prudential requirements may be found on the COBAC Portal.
RISK ASSESSMENT UNDER THE ANTI MONEY LAUNDERING AND TERRORISM FINANCING REGIME OF CAMEROON AND CEMAC
- Opinion of Regulatory Authorities
The Community supervisory and regulatory authorities shall issue a joint opinion on the risks of money laundering and terrorist financing affecting the Community's internal market.
This opinion shall be issued within two (2) years from the date of entry into force of this Regulation. It shall be renewed periodically based on the assessment of the risks of money laundering and terrorist financing.
This opinion shall be made available to the Central African Anti-Money Laundering Group (GABAC), the National Financial Investigation Agencies (ANIF), and the persons subject to this Regulation, in order to assist them, each within their respective areas of responsibility, in identifying, managing, and mitigating the risks of money laundering and terrorist financing.
Supervisory and self-regulatory authorities ensure that the private sector implements mechanisms to identify, assess, and understand the money laundering and terrorist financing risks to which its sector of activity is exposed.
- National Risk Assessment
The competent authority of each Member State shall take appropriate measures to identify, assess, understand, and mitigate the money laundering and terrorist financing risks to which it is exposed and shall keep this assessment up to date.
Each Member State shall designate an authority responsible for coordinating the national response to the risks referred to in paragraph 1 above. The results of the risk assessment shall be communicated to all competent authorities and self-regulatory bodies, as well as to financial institutions and EPNFDs.
Each Member State shall apply a risk-based approach to allocating its resources and implementing measures to prevent or mitigate money laundering and the financing of terrorism and proliferation.
Risk Assessment Measures Implemented by Obligated Persons
Obligated persons shall take appropriate measures to identify and assess the money laundering, terrorist financing, and proliferation risks to which they are exposed, taking into account risk factors such as clients, countries or geographical areas, products, services, transactions, or distribution channels. These measures shall be proportionate to the nature and size of the obligated persons.
The assessments referred to in paragraph 1 above shall be documented, kept up to date, and made available to supervisory, regulatory, and oversight bodies, National Financial Investigation Agencies, and competent authorities.
Obligated persons shall have policies, procedures, and controls in place to mitigate and effectively manage the money laundering, terrorist financing, and proliferation risks identified at the Community, Member State, and obligated person levels. These policies, procedures, and controls must be proportionate to the nature and scale of the business.
The policies, procedures, and controls referred to in paragraph 3 above include, but are not limited to:
The development of internal policies, procedures, and controls, particularly with regard to customer due diligence, reporting, record-keeping, internal control, compliance management (including, where the size and nature of the business warrant, the appointment of a compliance officer at management level), and personnel checks;
- An independent audit function responsible for testing the policies, procedures, and controls referred to in the first indent above where appropriate, taking into account the size and nature of the business;
Subject entities must obtain approval from a senior level of their hierarchy for the policies, procedures, and controls they implement. These policies, procedures, and controls are monitored and strengthened as needed.