Member States : Republic of Mali
Republic of Mali
Considered one of the promising democracies in West Africa, Mali witnessed a major political setback in 2012; starting from the protracted Touareg rebellion to the military coup of 22 March 2012 that overthrew the elected Government of former President Amadou Toumani Toure. This coup precipitated the military victory of the Tuareg rebellion waged by the National Movement for the Liberation of Azawad (MNLA), with the overt support of Al Qaeda-linked terrorist groups, chiefly the Ansar Dine and the Movement for Oneness and Jihad in West Africa (MUJAO), and Al Qaeda in the Islamic Maghreb (AQIM).
The eventual fall of the vast north of the country into the hands of the rebels and terrorists and the consequent imposition of Sharia law in that region saw the de-facto breakup of the country into two. In April 2012, the MNLA unilaterally declared “Independence of Azawad” following a major blitz conducted in the north of the country, and took control of three key cities: Kidal, Gao and Timbuktu. This dramatic situation caused the displacement of hundreds of thousands of Malians into neighboring countries.
Also, the control of the north by the terrorist groups, which also perpetrated organized crime, such as kidnapping, drug trafficking, contraband smuggling, turned the country into a haven of ML/TF. While the Interim Government in Bamako scrambled to organize itself, the menacing advance of the terrorist forces southward, as well as the overarching political surveillance of the still-active coupists in the background, continued to undermine the authority of the Mali State.
Following the forced resignation of former Prime Minister Cheick Modibo Diarra in December 2012 and his arrest on the orders of Captain Sanogo, head of the coupists, a new Prime Minister, Dr. Diango Cissoko, was appointed. Yet the combination of a terrorist territory in the north and a military-controlled civilian government in the south is mortally injurious to Mali’s capacity to fight ML/TF. Worse still, it has turned the country into a potential ground for plotting and sponsoring TF, organized crime and other ML predicate crimes in neighboring countries within the region.
It is important to note however, that the ECOWAS has responded appropriately to the challenges posed by the political and security situation in Mali. The ECOWAS, in collaboration with the UN and African Union (AU) was able to adopt a Security Council Resolution for the deployment of troops to Mali under what is called AFISMA. A donors’ fund raising meeting was also held, which raised about $450 million and other subsequent assistance. The French and Malian forces were able to dislodge the rebels and recover significant parts of Malian territory before the end of 2012. Most ECOWAS and other countries have deployed troops to help restore the sovereignty of Mali. Negotiations were on-going through constructive dialogue at the time of writing this report, with a time-table for election agreed upon.
Economic and Financial Situation
In spite of the political and security crises, the Malian economy was projected to grow by 6.9% in 2012, a sharp rise from 1.1% in 2011. This projection is however subject to change, depending on the vagaries of the political and security situation, as well as of trade with Cote d’Ivoire.
The macroeconomic context of Mali had already been marked in 2011 by a sharp drop in agricultural production due to erratic rainfall and poor distribution of rains over time and space. This was compounded by a combination of external shocks, including the post-election crisis in Côte d’Ivoire, the war in Libya, and rising prices of oil and food. To recall, in 2011 the country’s GDP growth was 1.1%, with contributions from the primary, secondary and tertiary sectors, respectively, standing at 35.1%, 25.3% and 39.5%. GDP growth was supported, first, by the cotton production and trade, then by textile and food industries, transport, telecommunications and livestock.
The Financial sector of Mali is bank dominated with 13 deposit money banks accounting for about 90% of the sector’s total assets valued about 20% of GDP in 2010.
Remittances inflows in 2011 amounted to USD473 million, which represents about 4.5% of GDP.
Following the March 2012 coup, both the public and private sectors of the economy suffered extensive damage. The occupation of the north of the country disrupted agricultural production and trade, as the much deteriorated security situation had caused a drop in business travels to Mali. General trade, hotels and restaurants were hit hard. The development partners’ decision to suspend budgetary support and a good part of project aid to the country’s administration resulted in poor performance in the construction and public works sectors. Fortunately, the mining sector turned out to be a source of stable growth, and the agricultural sector saw bumper crops in 2012.
The IMF considers that the authorities have been cautious in offsetting the loss of revenue through cuts in expenditure, particularly investment spending, and a reduction of indirect subsidies on petroleum products and cooking gas. In addition, in late July 2012, the World Bank started a portfolio of eighteen active projects in Mali, corresponding to funding commitments of $587.6 million distributed in the areas of energy and rural development.
Mali was ranked 146th out of 183 countries in the World Bank’s Doing Business report of 2012, and as such, dubbed most reforming country in the UEMOA zone for improving its business climate. However, its ranking by Transparency International as 105th out of 174 countries in 2012 in the Corruption Perception Index remained poor, with a score of 34%, and indicates the extent of corruption in the country. Under such a climate, it would be very difficult to effectively operate the AML/CFT regime of the country.
Despite the country’s economic improvement in 2012, poverty persisted in Mali, particularly in rural areas (51%). The UNDP estimated a low human development index (175th out of 185 countries in 2011), compounded by unfavorable demographics (high fertility rate - 6.6 children per woman; a very young population: 3 out of 5 Malians are under 25 years). This could make social spending intolerable for the government in the medium and long terms.
Youth unemployment is a major problem in Mali (at 15.4% for the age group 15 to 39 years, against 9.6% for the entire population), and is more prevalent in Bamako (27.3%) than in the secondary cities (14%) and rural settings (6.6%). The rural areas essentially grapple with underemployment during the dry season of the year. The average duration of unemployment is five years and the vast majority of the unemployed (81.5%) are young people looking for their first job.
On the other hand, Mali is on track to achieve the Millennium Development Goal (MDG) for primary school enrolment by 2015. The literacy rate is much higher in urban areas (53.2%) than in rural areas (21.6%). In terms of social spending, 35.61% of the 2011 budget was devoted to education. Mali could also achieve the MDG in the fight against HIV/AIDS by 2015. Gender discrimination and inequality are still strongly present in Mali. Women still remain underrepresented in decision-making bodies.
Prevalence of Predicate Crimes
Historically, the country’s geographical position puts it on the caravan trade routes that existed during the colonial period. Following decolonization and the emergence of new trade routes, the corridor once used by the caravan trade became the scene of informal trading activities, progressively a channel for various forms of regional and international traffic (cigarette smuggling, fuel smuggling, arms trafficking, drug trafficking, smuggling of migrants, etc). In 2011, the Malian police seized more than 900 kg of illegal drugs (cocaine, amphetamines, grass or resin cannabis and other controlled substances).
Regarding human trafficking, in addition to the smuggling of migrants passing through Mali en route to Europe, in March 2012, the Malian police had arrested four people suspected of trafficking of boys from Burkina Faso for forced labor in Mali’s artisanal gold mines. At the same time, twelve (12) proceedings related to trafficking were brought before the court.
Beyond these two offenses, the country report submitted by Mali in the period September 2011 to August 2012 highlights the following offences: fraud in the sale and purchase of gold, forgery and financing of terrorist activities. However, there is no regard for successful prosecution and conviction of ML cases.
Indeed, over the past decade, several alarming reports warned against the rise of organized crime in the Sahel-Sahara without generating any appropriate strategies for curbing the phenomenon in the countries concerned, particularly in Mali, where such activities have led to the corruption of many government officials, including security personnels in these areas. In addition to the weakening of the customs service, corruption has also facilitated collusion between smugglers and other criminal organizations present in northern Mali.
Moreover, the limited resources of the Malian government and the sheer size of the three northern regions of Mali have been a daunting challenge for the state in the face of growing organized crime. This situation was exacerbated by the military coup of March 2012, which precipitated the takeover of the three northern regions of Mali (about two-third of the country) by terrorists and rebels.
Historically, illicit drugs in Mali were limited to cannabis and other herbs in resin mainly for local use.
Recently, however, the foreign traffickers began smuggling of cocaine from South America in transit to Western Europe via Mali. Vast uninhabited areas in northern Mali are used for receiving clandestine air consignments of cocaine, as well as ground transportation of cocaine and hashish to Europe. Organized crime has encouraged the establishment of jihadist groups in the area north of Mali, especially after the Libyan crisis. They have maintained and promoted various kinds of illicit trafficking since their arrival in Mali.
The Carnegie report on organized crime and conflicts in the Sahel links organized crime and terrorism in Mali. As previously stated, extremists and Islamist groups derive their strength in the north of Mali from their alliance with local criminal networks based on commercial interests. Therefore, any approach to the conflict must include strategies to break these alliances.
The analysis of the three previous follow-up reports had shown remarkable progress in efforts to strengthen its national AML/CFT mechanism to conform to the FATF recommendations, including the adoption of the TF law and the admission of its FIU as a member of the Egmont Group. Mali submitted its fourth post-mutual evaluation follow-up report in November 2012. The report shows that the severe socio-political and security crisis has hampered the implementation of several activities planned as part of efforts to ensure compliance with international AML/CFT standards. Other activities carried out by the authorities, include:
• The adoption of the law on trafficking in persons in 2012;
• The development of a draft decree on the conditions for enforcing measures to freeze criminal funds;
• The establishment of a functional platform for mutual legal assistance in the fight against transnational organized crime between Mali, Mauritania and Niger;
• The signing of cooperation agreement with South Africa and other agreements with Russia, Macedonia, and Chile to be signed at the next meeting of the Egmont Group; and
• The organization of five (05) AML/CFT sensitization workshops on behalf of reporting entities and investigation authorities.
In addition, the national AML/CFT strategy was finalized with the validation workshop of 3 December 2011 which convened all the stakeholders in AML/CFT. The final document thus validated is part and parcel of the government’s program to be adopted before the end of 2012. Regarding STRs, the FIU indicated having received twenty-six (26) between January and August 2012, including 05 that were investigated, and 04 that were prosecuted.
The Carnegie Papers, Organized crime and conflicts in the Sahel-Sahara Region (http:// carnegieendowment.org/2012/09/13/organized-crime-and-conflict-in-sahel-sahara-region/dtjm)
However, to date, no sentence has been pronounced by Malian courts for money laundering or terrorist financing.
It should be noted that the Malian mechanism still has significant deficiencies. For instance, the financing of “individual terrorism” or that of a terrorist organization” is not criminalized in the CFT law. This would preclude initiating parallel proceedings (criminal, civil or administrative) in such cases, and undermining any request for international cooperation in this matter. There is no proper mechanism for the implementation of UN Resolutions 1267 and 1373. Mali is particularly encouraged to designate the authority empowered to take, administer and enforce freezing (administrative) or release measures.
212. Unlike previous years, Mali neither hosts any GIABA activity in 2012, nor even with any other partners working on AML/CFT issue. Apart from its participation in some statutory meetings and regional seminars organized by GIABA, the country has received very little assistance due to the prevailing socio-political instability. Mali was scheduled to be the pilot country for the implementation of the GIABA technical assistance project on AML/CFT hard and software, but it was not possible to install the equipment as a result of the security situation. Technical Assistance needs in AML/CFT become therefore recurrent, specifically with regard to:
• Sensitization of reporting entities and civil society on the dangers of organized crime, money laundering and financing of terrorism;
• Strengthening the capacity of key players (analysts, judges, investigators, customs officials, bank executives, corporations of DNFBPs) in AML / CFT;
• Strengthening the legal framework, in particular, for the establishment of a system to freeze assets, and drafting of legislation relating to the appointment of the administrative authority in charge of freezing of assets and procedures;
• Purchase of equipment for detecting and controlling money, as well as precious metals and stones;
• Technical assistance for the retrieval of some records destroyed during incidents, which occurred during the political crisis; and
• Assistance for the rehabilitation and equipping of security posts and courts looted in the northern regions of Mali.
Mali will have to fight on several important fronts in the management of its crisis. Indeed, while trying to recover its territorial integrity and political stability through a smooth transition to preserve the functioning of its institutions, as well to ensure economic growth, the country must be able to curb organized crime. This basically requires that the fight against organized crime is not relegated to the lesser priorities. In this case, the rule of law should continue to be guaranteed, as well as the continued process of compliance with international standards. To do this, Mali will need the support of the international community, but especially technical assistance from regional institutions and West African countries.
Furthermore, during the past year, very few corrective actions were taken with respect to deficiencies identified in the AML/CFT mechanism of Mali. The proposed action plan through the national strategy is a very important decision whose implementation can help to correct some of the deficiencies in the Mutual Evaluation Report.