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illicit mobile money flows

“The absence of regulations has fostered the existing illicit flows”

In Africa, the mobile money boom has led to an increase in the number of illicit financial transactions, for want of an appropriate regulatory framework. Madina Adam SERE, senior financial analyst and expert consultant, and trainer in the fight against money laundering and the financing of terrorism, provides details of the sub-region’s vulnerabilities and of the projects being reviewed to remedy them.

How have the fast-growing mobile money services fostered illicit financial flows in West Africa?

The development of telecommunication networks in West Africa, even in remote areas, and the low cost of mobile devices have allowed the populations, whether educated or illiterate, to access mobile money services. Unfortunately, the sector’s regulations were implemented in 2015, that is to say, several years after the launch of these services in the region. The absence of regulations, control, and a specific monitoring entity has encouraged, and indeed stimulated, the existing illicit flows, even allowing for the creation of new illicit flows.

What are the main flaws in the financial governance of the sub-region as regards dematerialized money flows?

First of all, the will to increase our countries’ low use of banking facilities eclipses the management of the related risks. The insufficient number of studies carried out on all the categories covered by these flows to better understand the risks for the regional economy and the links to the criminality they encourage, as well as those resulting from such flows, constitutes a second pitfall. The third one is the belated implementation of regulations which, in addition, do not fully take into account the risk factors associated with the increase in criminality in general, and in money laundering and terrorism financing in particular. Finally, the checks planned to ensure the smooth running of the activity are only partially effective.

What role can Big Data collection and analysis tools play in the fight against money laundering and terrorism financing? Which other measures have demonstrated their efficiency?

These tools make it possible to centralize the data and to share them across borders, as does Frontex, the European Border and Coast Guard Agency, within the European Union. They also enable the tracing of at-risk individuals, through their identity and their criminal acts in the region. The other measures, the efficiency of which has already been demonstrated, are fingerprinting and taking photographs in airports. The data yielded by these measures are important to control the individuals without requiring secondary processing.

In West Africa, which are the leading countries and the projects being reviewed as regards the fight against money laundering and terrorism financing?

Ivory Coast and Senegal, as regards the fight against money laundering; Niger and Nigeria as regards the fight against terrorism financing. One of the main ongoing regional projects is the OCWAR (Organised Crime West African Response) project, which includes the following three components: OCWAR M (money laundering and terrorism financing), OCWAR C (cybersecurity) and OCWAR T (traffic). The national strategy against money laundering and terrorism financing is a project that is currently being reviewed in different countries of the sub-region. It is being finalized in Togo, for instance.

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