Senegal: Scoping assessment

  • Publication date: 10 November 2022
  • Authors: Michael Barron, Moussa Gueye, Favour Ime, Tim Law

Executive summary

This report examines the current state of play of beneficial ownership in Senegal. It explores the legislative framework of beneficial ownership (BO), the system used to collect BO data, and how accessible this data is to the public. Using the Open Ownership Principles as a guide, this report provides an assessment of the measures that Senegal should take in order to introduce an economy-wide, public, BO register.

Such a register can bring real benefits to the country’s economy and provide greater insight into who is investing in the economy as well as contributing to the fight against corruption, money laundering and other illicit financial activities. Senegal has already taken a number of measures on beneficial ownership transparency (BOT) including embedding a BO definition in primary legislation and implementing a BO reporting system to meet EITI requirements.

However, the country does not yet meet international best practice on BO reporting. The Financial Action Task Force (FATF) regional body, the Inter-Governmental Action Group against Money Laundering (GIABA), undertook an evaluation of Senegal’s compliance with its recommendation on beneficial ownership. It issued its mutual evaluation report (MER) in May 2018 and Senegal received ratings between low and non-compliant for its implementation of BOT. [1] The MER noted that “there is no legal and institutional mechanism in the country for identifying beneficial owners of transactions and the real owners of legal persons.” [2]

From our desktop research and consultation sessions with key implementing agencies, this report finds that since the GIABA MER in 2018, the government has taken action regarding BOT, which include:

1. Incorporating the West African Economic and Monetary Union (UEMOA) anti-money laundering (AML) directive [3] into domestic law; [4]

2. Adopting a national AML and countering financing of terrorism (CFT) strategy document for 2019-2024;

3. Implementing a presidential decree, [5] which establishes a BO reporting system for the extractive industries, namely by requesting BO data from all companies holding or applying for extractive licenses, and collecting them in the commercial registry (RCCM); and

4. Amending the Tax Code through the 2021 Finance Law, which created a legal obligation on companies to identify and report their beneficial ownership to the Tax Authority, but this has yet to be effective.

This report also reveals that:

5. In its EITI Validation, Senegal was assessed as having fully met the initial criteria with regard to implementing Requirement 2.5 on BOT;

6. There is no legal obligation on the government to create and maintain a public BO register;

7. The only public access to BO data is via the EITI reporting process, but this has some limitations including lack of complete coverage of the extractive sector;

8. There are currently three BO definitions being used within Senegal, and while these have some common elements there are also some notable differences;

9. BO information is not currently subject to robust verification; and

10. Penalties for non-compliance with BO reporting requirements are not currently enforced.

The main recommendations of this report relate to the enactment of specific legislation to create and maintain a public BO register. The government should also set up a multi-disciplinary task force to draft this legislation and advise on policy decisions. The report also makes several recommendations on the content of BO legislation.

Footnotes

[1] See Anti-Money Laundering and Counter Terrorist Financing Measure, Senegal, Mutual Evaluation Report, November 2018

[2] See http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/GIABA-Mutual-Evaluation-Senegal-2018.pdf

[3] Directive n° 02/2015/cm/UEMOA Relative a la Lutte Contre le Blanchiment de Capitaux et le Financement du Terrorisme dans les Etats Membres de l’Union Economique et Monetaire Ouest Africaine (UEMOA)

[4] See https://itie.sn/reglementation/

[5] Ibid

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