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Benin 
Benin’s economy is essentially based on agriculture. Cotton accounts for 40% of GDP and about 80% of official export receipts. Most small businesses are privately owned by local citizens, with a few foreign-owned companies operating as well. The private commercial and agricultural sectors remain the principal contributors to growth. But despite this, the economy remains underdeveloped. The fact that Benin shares a lengthy common land border with Nigeria, which is 15 times larger and 18 times more populous, affects everyday life in the country. Since the anti-corruption drive began in Nigeria several years ago, many criminal elements have found it easier and safer to operate outside that country, and many have taken advantage of the proximity and close ties with Benin to relocate there, temporarily or permanently. A powerful Lebanese business community, and to a lesser extent a Chinese community, is also present in Benin and conducts trade and commerce activities on an essentially cash basis. This has led to a situation whereby tax evasion, failure to pay duties, corruption and illicit export of currency has become common. The incapacity of the state to regulate and control this situation now needs to be addressed urgently as the country seeks to become more prosperous and to provide basic services equitably to all its citizens.
A potential risk for money laundering is the prevalence of drug trafficking and associated corruption. The local media reported many seizures in 2007, one of which included 450 kg of cocaine. The United Nations Inter-Regional Crime and Justice Institute (UNICRI) reports that smuggling and trafficking in human beings for the purpose of labor in industries are continuous and ongoing in Benin Republic. In 2007, the head of Benin’s drug law enforcement agency was imprisoned on alleged cocaine-related charges.
Benin is a member of the West African Economic and Monetary Union known as UEMOA (l'Union Économique et Monétaire Ouest Africaine) under its French acronym. The UEMOA is a formal treaty linking eight French-and Portuguese-speaking West African countries, by virtue of its Law No. 94-06 of June 22, 1994 authorizing ratification of the Treaty signed on January 10, 1994. This Treaty in turn governs all AML/CFT efforts among its members.
Money laundering is a crime in Benin, as established in a uniform law of the UEMOA. This law was formally ratified by the National Assembly on October 31, 2006, as “Law No. 2006-14", pertaining to the fight against money laundering. This is also governed by Community Regulation No. 7/2002/CM/UEMOA, which regulates the fight against ML in member States, No. 14/2002/CM/UEMOA, which regulates the freezing and seizure of assets, and No. R09/98/CM/UEMOA, which regulates external financial relations among member States, in addition to Instruction No. 06/99/RC of February 1, 1999 relating to manual exchange operators. With the UEMOA Directive of July 4, 2007, it is hoped that a terrorist financing law will be enacted.
The primary authority for dealing with AML/CFT issues in Benin is the Directorate of Monetary and Financial Affairs in the National Directorate for Treasury and Public Accounts, located in the Ministry of Finance. At the dawn of 2007, Governmental Decree No. 2006-752 of December 31, 2006 created the FIU called CENTIF (Cellule Nationale de Traitement des Informations Financières) under its French acronym. This body is destined to be the principal repository and source of financial intelligence in Benin, empowered to investigate and generate intelligence in order to prepare prosecution of economic and financial crimes. At this time, however, it has yet to become formally and concretely operational. Meanwhile, the Director of Monetary and Financial Affairs in “Treasury” remains the national correspondent of GIABA.
Benin is signatory to several international conventions relating to ML and FT as shown in Table 1 below and Table 2 in Chapter 3. It also recognizes Security Council Resolutions 1267 (1999) and 1373 (2001) on ML, as well as adhering to the FATF 40+9 Recommendations.
The banking sector is generally quite active in the country.The banking system consists of 12 individual banks and one other financial institution, which are legally licensed to operate. The total assets under deposit represent approximately 500 billion CFA francs (or US$1 billion), and credit issued runs to around 400 to 450 billion CFA (or about $900 million). The sector is well regulated – the uniform UEMOA law is applicable and FATF practices and recommendations apply (KYC regulations, information circulars, reporting obligations, transaction ceilings and record-keeping). Even the DNFI sector (designated non-financial institutions) is somewhat organized, with microfinance institutions and bureau de change operators regrouped under the umbrella of professional associations, with rules and regulations, as is the case with insurance companies and the Securities and Exchange Commission in the financial institutions sector.
Treasury is entrusted with surveillance and overview of financial institutions, including banks and other formal bodies, through a common mechanism called “la Commission Bancaire” (Banking Commission). The banks may be considered to be solid and stable, many sharing foreign participation in their asset base. Many people seem to be generally used to banking their money, not just large account-holders but also ordinary citizens.This possibly stems from the widespread access to microfinance for small businesses, which remains vibrant after many years of operation. According to many stakeholders, the proportion of financial transactions transiting through banking and other financial institutions is around 40% of all transactions. This is significant, compared with other regional economies. The other 60% remains elusive in this traditionally cash-based economy, particularly outside the main cities.
As indicated above, the country has enacted a number of laws and regulations aimed at preventing and controlling money laundering. But generalized corruption continues to plague the country and ML is reported to be costing Benin about 3% of GDP annually. Since last year, however, with the election of a new and strong-willed President who is committed to the eradication of corrupt practices, there seems to be an obvious effort to come to grips with this problem. The President has reached out to the entire population through some highly visible public appeals and statements, in order to gather grassroots support for his crusade.
In August 2007, a National Stakeholders’ seminar was held with the support of GIABA during which participants were sensitized to the provisions and obligations under the AML law. A draft National Strategy was also produced but has not yet been approved by the Government. The generally weak capacity in the country carries the potential risk of money laundering and terrorist financing. The nomination of the members of the CENTIF and its immediate take-off should be a priority. Raising public awareness, including the circulation of the AML law to stakeholders, is particularly imperative.
