Republic of Guinea

Political Situation

The Republic of Guinea continued to tread on a difficult democratic path. The country faced a tense socio¬political climate, not least because disagreements over the voter register resulted in the postponement of planned legislative elections. Clashes between opposition supporters and Guinean police officers further highlighted political tensions in the country.

Political and institutional instability in past years have compounded Guinea’s governance challenges, not least because the authority of the state has been weakened. According to the World Bank’s 2012 Doing Business Report, Guinea is the 179th best place to do business (out of 183).

Economic and Financial Situation

The Guinean economy was expected to expand by 5.1% in 2012, compared to 4% in 2011138. Contributing to this growth, are 3.9% growth in the primary sector, including 4.5% and 4.1% in the fishing and agriculture sub-sectors respectively. Also, the expansion of irrigated lands and increase in inputs was expected to result in 11% growth in food production in the 2011-2012 season, compared with 10% in the 2010-2011 season. However, gold production and diamond production are expected to decline by 36.5% and 24.3% respectively.

Despite the expected growth, political instability negatively affected an already weak and underdeveloped private sector by way of loss of foreign investments and business opportunities. More significantly, Guinea’s poverty rate stood at 55.2% in 2012, with 64.7% of Guineans in rural areas and 35.4% in urban areas living in poverty. Guinea is therefore unlikely to reduce its poverty rate by half by the 2015 deadline. Foreign exchange reserves reached US$ 677 million, covering three months of importation costs.

The Financial sector of Guinea comprises 12 deposit money banks, which represents over 90% of the financial sector with assets equal to 9.7% of GDP in 2006. Remittances inflows in 2012 stood at USD78 million about 1.5% of GDP.

Prevalence of Predicate Crimes

With high levels of unemployment and poverty, Guinea remained vulnerable to a series of predicate criminal activities. The country continued to be a transit and repackaging point for narcotics drugs from Latin America en route Europe and other destinations. Furthermore, corruption remained rampant. In May 2012, an attempt to embezzle public funds to the tune of 13 billion Guinean Francs led to the arrest and imprisonment of nine (9) civil servants from the Treasury Department, the Central Bank and the Ministry of Economy and Finance. This embezzlement attempt also led to the death of the Director of Treasury, who was assassinated for exposing criminality. On the level of corruption, Guinea scored 24 out of 100 and was ranked 154^th out of 174 countries in the 2012 Transparency International Corruption Perception Index.

AML/CFT Situation

Guinea was evaluated in June 2012 and the Mutual Evaluation Report (MER) was discussed and adopted during the 18th GIABA Plenary held in Dakar, Senegal on 20-22 November 2012.

Notwithstanding sustained efforts by GIABA, including a high level advocacy visit by the Director General on 27-29 March 2012, to engage with Guinean political leaders in developing the country’s AML/CFT framework considerable challenges remain. Guinea’s AML/CFT framework remain extremely weak and incomplete, not least because it is yet to establish an effective and functioning FIU, as stipulated by Article 19 of the 2007 AML Law No. L/2006/010/AN. Guinea is also yet to enact a CFT law, appoint a National Correspondent to GIABA, and strengthen cooperation and collaboration among relevant institutions for the effective functioning of its Inter-Ministerial Committee.

The Technical Monitoring Committee, an informal body charged with coordinating AML/CFT activities, lacks the requisite financial and logistic resources to carry out its functions.

The absence of an FIU and a national AML/CFT Strategy, and the lack of robust legal and institutional frameworks undermine AML/CFT efforts in Guinea. In addition, the reported cases of predicate crimes suggest that Guinea is a high risk country for ML and TF. This is evidenced by the non-provision of STRs by banks, financial institutions, and other reporting entities. There is also no record of criminal prosecution of any of the predicate crimes with conviction. Despite all the assistance and constructive engagement of GIABA with the authorities of Guinea, it has remained, together with Liberia, the two weakest links in the AML/CFT struggle of the region.

Technical Assistance

With regard to technical assistance, GIABA assisted Guinea to organize a pre-evaluation workshop for stakeholders in that country on 5-7 March 2012 as a prelude to the mutual evaluation exercise. Approximately sixty (60) participants attended. The objective was to familiarize them with the tools used in the evaluation process as well as the evaluation methodology itself and the processes and procedures of GIABA’s Mutual Evaluation exercise.

Even so, Guinea requires further assistance to, among others, elaborate its national AML/CFT strategy, strengthen its Technical Committee so as to coordinate training and awareness programs, and provide training to its judicial personnel on financial crimes. To be sure, although GIABA had offered to provide technical and financial support to Guinea to enable it to strengthen its AML/CFT Strategy, Guinean officials opted to complete the country’s mutual evaluation before working on the strategy.

Conclusion

The Republic of Guinea should take steps to enhance its AML/CFT regime. In particular, it must focus on the establishment of the FIU, the adoption and promulgation of the law on TF as well as the elaboration of an AML/CFT national strategy which will be of urgent need for the future.

GIABA reaffirms its willingness to support the country’s efforts in strengthening the framework for fighting ML/TF while believing that these efforts should be based on the political will and firm commitment of the Guinean authorities. Overall, since the MER revealed significant deficiencies, Guinea’s main priority is to develop an action for addressing the deficiencies without delay.