Four recent enhanced follow-up reports—covering Benin, Cabo Verde, Togo, and Burkina Faso—offer a consolidated view of how these jurisdictions are aligning themselves with the FATF standards. Together, they present a mixed but telling portrait: progress is real, yet operational effectiveness remains uneven. The story is not simply one of compliance upgrades but of structural weaknesses that, if left unaddressed, could undermine regional stability and investor confidence.
Table of Contents
AML progress in Benin
Benin’s fourth follow-up report illustrates how far a determined government can go in reshaping its AML framework within a short period. The most significant step was the adoption of the Uniform AML/CFT Act No. 2024-01 in February 2024, which consolidated previous legislation and addressed core deficiencies. This Act granted courts the power to order freezing, seizure, and confiscation of assets linked to money laundering, terrorist financing, and proliferation financing. It also introduced stronger provisions on beneficial ownership and created the National Agency for the Recovery of Confiscated and Seized Assets, responsible for tracing, managing, and liquidating assets.
Benin’s reforms extended beyond legal drafting. A beneficial ownership registry was created, and risk assessments of legal entities and virtual assets were carried out. Authorities issued new instructions on thresholds for due diligence, the transport of cash, and the management of bearer negotiable instruments. At the institutional level, a Directorate for Cooperation and Mutual Legal Assistance was established, signaling intent to improve international cooperation.
Despite these gains, gaps remain significant. Confiscation by equivalent value is not consistently available for predicate offences, which means criminals can shield their assets if the original proceeds are dissipated. Protection for bona fide third parties in confiscation proceedings is incomplete. Moreover, while Benin has criminalized terrorist financing in line with international standards, enforcement capacity—especially investigative depth and prosecutorial expertise—lags behind. These weaknesses underline a central theme: legal reform does not automatically translate into operational efficiency.
For Benin, the test now lies in implementation. With a growing digital economy and porous borders, the country must ensure that compliance controls penetrate sectors beyond banking. The rise of informal finance and trade-based laundering in West Africa poses challenges that legal texts alone cannot neutralize. Unless regulatory supervision and law enforcement capacities are expanded, Benin’s progress risks remaining theoretical.
AML framework in Cabo Verde
Cabo Verde’s sixth enhanced follow-up report demonstrates the value of structured national coordination. The country has taken the bold step of approving a comprehensive National Strategy for preventing money laundering, terrorist financing, and proliferation financing (ENCAVE). This framework, approved in 2023, provides an operational roadmap until 2027, with an Interministerial Commission tasked with coordinating implementation.
The creation of ENCAVE addressed long-standing criticism that Cabo Verde lacked a central coordinating body. Now, representatives from ministries, regulators, the FIU, and law enforcement meet quarterly to oversee AML/CFT policies. The Executive Committee meets monthly to execute decisions, and a dedicated technical secretariat ensures continuity. This architecture reflects FATF’s expectation that national coordination be systematic, not ad hoc.
Yet the strategy has one major flaw: it is based on a 2017 national risk assessment. While ENCAVE aligns with the deficiencies identified in the 2019 evaluation, the lack of updated risk analysis makes it potentially obsolete. The money laundering threats Cabo Verde faces today—such as real estate-linked laundering, cash-based smuggling routes, and emerging crypto channels—are not fully captured in a risk framework nearly a decade old. Policies anchored in outdated risks risk missing the evolution of threats.
Cabo Verde’s strength lies in institutional design. Legal frameworks for data protection, interagency cooperation, and policy coordination are robust. The challenge lies in ensuring agility. Without updated risk inputs, even the most sophisticated committees risk drifting toward formalism. To remain relevant, Cabo Verde must urgently refresh its national risk assessment and recalibrate ENCAVE’s objectives to capture current realities.
AML situation in Togo
Togo’s third enhanced follow-up report reflects incremental progress amid persistent vulnerabilities. When its mutual evaluation was adopted in 2022, the country was rated weak on both effectiveness and technical compliance, with 24 recommendations rated partially or non-compliant. This placed Togo under enhanced monitoring. The 2025 review re-rated Recommendation 34 (guidance and feedback to financial and non-financial institutions) from partially compliant to largely compliant, showing some improvement.
The progress stems from expanded guidelines issued by supervisors to banks, insurers, and securities firms. Guidance on suspicious transaction reporting and targeted financial sanctions was rolled out, and the FIU improved feedback to reporting entities, including workshops and feedback sessions with banks. For legal professionals such as notaries and lawyers, as well as casinos and gaming establishments, sector-specific guidance was also introduced.
Yet critical weaknesses persist in designated non-financial businesses and professions (DNFBPs). Real estate agents, company service providers, and precious metals dealers—key high-risk sectors in Togo—have not received tailored guidelines. Moreover, these entities have not filed suspicious transaction reports, indicating either lack of awareness, lack of supervision, or both. The FIU cannot provide feedback where no reports exist. This reveals a structural gap: while banks and formal institutions are gradually strengthening compliance, DNFBPs remain largely outside the AML radar.
Togo’s case shows that technical progress can mask deeper cultural and operational deficiencies. Compliance culture is still shallow, particularly outside the banking sector. Unless regulators expand outreach, supervision, and enforcement into DNFBPs, laundering channels through real estate, gold, and corporate vehicles will remain open. The country has taken steps forward, but unevenly, leaving high-risk sectors under-supervised.
AML reforms in Burkina Faso
Burkina Faso’s sixth follow-up report underlines both determination and fragility. Since its 2019 evaluation, the country has remained under enhanced monitoring. The 2025 assessment re-rated progress on several recommendations, particularly those linked to targeted financial sanctions. Authorities issued decrees creating a consultative freezing commission and designated supervisory authorities for DNFBPs. A National Authority for Sanctions was established, and circulars instructed financial institutions to consult UN sanction lists regularly.
These measures align Burkina Faso more closely with FATF expectations, particularly on Recommendations 6 and 7. However, the reforms have not fully addressed timeliness issues. The country still cannot implement UN Security Council sanctions under Resolutions 1267 and 1988 within 24 hours, as required. Sanctions must first be transposed into domestic law, causing delays. The scope of assets subject to freezing remains too narrow, and procedures for de-listing are incomplete. These gaps leave Burkina Faso vulnerable to misuse of its financial system by designated entities.
Beyond sanctions, the report notes improvements in beneficial ownership and DNFBP oversight. Yet operational challenges loom large. Burkina Faso continues to face security and governance pressures that stretch institutional capacity. Money laundering risks tied to illicit mining and cross-border smuggling remain high, and enforcement resources are limited. While the legal framework is advancing, effective supervision and enforcement remain constrained by broader governance and security challenges.
Moving forward: key regional lessons
Taken together, the four follow-up reports reveal three dominant themes shaping AML progress in West Africa.
First, legislative reform is advancing. Benin has modernized its AML Act, Cabo Verde has codified a national strategy, Togo has rolled out guidance, and Burkina Faso has issued decrees on targeted sanctions. On paper, these reforms mark significant alignment with FATF recommendations.
Second, institutional capacity is rising but uneven. Beneficial ownership registries, asset recovery agencies, interministerial commissions, and sanction authorities demonstrate a new wave of institutional innovation. These structures provide the backbone for AML efforts, but their effectiveness depends on resources, training, and enforcement.
Third, operational effectiveness remains weak. Laws exist, but gaps persist in confiscation by equivalent value, the supervision of DNFBPs, the timeliness of sanctions, and the updating of risk assessments. Without closing these operational gaps, compliance risks remain high.
For compliance professionals, the lesson is clear: risk does not lie in the absence of legal frameworks but in their incomplete implementation. Financial institutions must adopt enhanced due diligence, especially in dealings involving real estate, precious metals, or high-cash sectors in these jurisdictions. Cross-border cooperation remains vital, as illicit flows rarely respect national borders.
The consolidated view shows that West Africa is moving in the right direction, but progress is fragile. FATF-style regional bodies such as GIABA have played a crucial role in pushing reforms, yet the true test will be whether these reforms translate into effective prevention, detection, and prosecution of financial crime.
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Other FinCrime Central News About West Africa
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Source: FATF
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