Benin AML & Sanctions Compliance

Benin's approach to Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) is anchored by a framework of national laws and regional directives. This framework establishes the legal and operational mechanisms for preventing, detecting, and prosecuting financial crimes.

The AML/CFT framework in Benin is primarily governed by Law No. 2018-16 on the Prevention and Suppression of Money Laundering and Terrorism Financing. This is complemented by supporting regulations and directives issued by key national and regional bodies, including:

• National Financial Information Processing Unit (CENTIF): Benin's Financial Intelligence Unit (FIU), responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial intelligence.
• Central Bank of West African States (BCEAO): The regional central bank for WAEMU (West African Economic and Monetary Union) member states, including Benin. It issues prudential regulations and AML/CFT directives applicable to banks and financial institutions.
• Banking Commission of WAEMU: The regional banking supervisor, responsible for the oversight and control of credit institutions within WAEMU, ensuring compliance with banking regulations, including AML/CFT obligations.
• Insurance Control Commission (CAC - Conférence Interafricaine des Marchés d'Assurances - CIMA): While CIMA is the regional body, Benin has national structures that enforce CIMA's insurance code, which includes AML/CFT provisions for the insurance sector.

FATF Status & Engagement

Summary of FATF Standing & Key Issues

Key References/Verification

Core Obligations

• Customer Due Diligence (CDD) / Know Your Customer (KYC): Institutions must identify and verify the identity of their customers using reliable, independent source documents, data, or information. Risk-based CDD is essential, with enhanced due diligence (EDD) required for higher-risk customers, including Politically Exposed Persons (PEPs), and for complex or unusually large transactions. Particular attention is required for entities involved in port operations, cross-border trade, and activities within free trade zones.
• Beneficial Ownership Identification: Robust measures must be in place to identify and verify the beneficial owners of legal persons and arrangements, typically applying a threshold of 25% ownership or effective control. Benin has been working on strengthening implementation, including the establishment of a beneficial ownership registry.
• Transaction Monitoring: Financial institutions must implement systems, whether manual or automated, to monitor customer transactions and detect those that are unusual, complex, or potentially suspicious. Specific vigilance is required for port-related payments exceeding threshold amounts (e.g., 5 million CFA francs).
• Record Keeping: All customer identification data, transaction records, and related documentation (including STR filings) must be maintained for a minimum period, typically 10 years after the business relationship ends or the transaction is completed. Specific requirements may apply to port-related documentation and free trade zone transactions.
• Reporting Obligations: Suspicious Transaction Reports (STRs) must be filed promptly with CENTIF (e.g., within 48 hours of forming a suspicion). Cash Transaction Reports (CTRs) are also required for transactions exceeding a specified threshold (e.g., 5 million CFA francs).

Key Challenges

• Port Operations and Trade-Based Money Laundering: The significant volume of activity through the Port of Cotonou and extensive cross-border trade create vulnerabilities for trade-based money laundering and illicit financial flows, requiring sophisticated oversight.
• Informal Economy and Cash Usage: A large informal sector and high prevalence of cash transactions complicate the traceability of funds and the effective implementation of AML/CFT measures.
• Free Trade Zones (FTZs): While promoting economic activity, FTZs can present higher ML/TF risks if not adequately supervised, requiring specific monitoring of business activities and financial flows within these zones.
• Resource and Capacity Constraints: Both regulatory bodies and reporting entities may face constraints in terms of human, technical, and financial resources, impacting the consistent application and supervision of AML/CFT requirements.
• Emerging Digital Financial Services: The rapid growth of mobile money and other digital financial services introduces new ML/TF typologies that require adaptive regulatory responses and enhanced monitoring capabilities.