Côte d’Ivoire

Political situation

Côte d’Ivoire is moving increasingly towards lasting peace and stability. Yet the country’s political and security situation remains fragile, with security deteriorating between August and October 2012. A series of deadly attacks targeting the national security forces in and around Abidjan and along the border with Ghana and Liberia was reportedly planned, financed and often carried out by groups and individuals linked to the former government. These attacks, particularly those allegedly perpetrated by opposition and rebel elements based in Ghana, and the resulting violence in south-western Côte d’Ivoire, which led to the closure of the border with Ghana in September 2012, not only threatened to undermine the country’s progress towards peace but also deepened mistrust and divisions between the ruling coalition and the opposition. In addition, the government’s announcement of an alleged foiled coup attempt by soldiers loyal to the opposition, former presidential guards and other rebel elements reflects the country’s still difficult transition to peace.

The volatile security situation and the theft of weapons and ammunition by assailants during attacks on security installations have major implications for the trafficking and circulation of small arms and light weapons (SALW) in Côte d’Ivoire.

Despite these challenges, governance has improved considerably in Côte d’Ivoire. With a score of 39 out of 100, the country was ranked 46^th out of 52 African countries on the 2012 Ibrahim Index of African Governance (IIAG). This is a slight improvement on the score of 36 out of 100 in 2011 and 2010. At regional level, President Alassane Dramane Ouattara was elected Chairman of ECOWAS and showed exemplary leadership in managing the political crises in Guinea-Bissau and Mali. With the support of the other Heads of State, he chaired more than 10 ordinary and extraordinary ECOWAS summits, a record achieved in one year in managing conflict and political instability in the region.

Economic and financial situation

Despite the volatile security situation and rising political tensions, economic activity in Côte d’Ivoire showed considerable resilience and returned to normal in 2012. Real GDP was expected to grow by 8.6% in 2012 and 5.5% in 2013. The forecast for 2012 was slightly below the 8.9% and 8.1% projected by the World Bank and the IMF respectively. There is no doubt that the expected growth depends on consolidating peace and restoring productive capacity. Higher cocoa exports, however, were expected to contribute to growth. Other services such as tourism, banking and hotels recorded growth of 17.1%.

Meanwhile, the government announced increases of 44.7% and 2.7% in revenue from taxes and other sources. Total revenue represented 20% of nominal GDP, compared with 14.9% in 2011. At the same time, the government’s efforts to revive the economy after the electoral crisis led to a 39.7% increase in spending. Capital expenditure in particular rose considerably owing to the construction of social and economic infrastructure, reaching 5.4% of GDP compared with 2.6% in 2011. Similarly, current expenditure rose by 29.1%, mainly as a result of higher operating costs, salaries and subsidies granted in the electricity sector.

These improvements were achieved thanks to economic reforms launched through an ambitious national development plan for 2012-2015, which aims to boost public investment and drive growth while creating jobs. The IMF agreed to support this economic programme under its interest-free Extended Credit Facility of USD 300 million over 3 years. At the same time, the business climate improved slightly, with Côte d’Ivoire ranked 167^th out of 183 countries in 2012, compared with 170^th in 2011.

Despite this commendable progress, an estimated 65.5% and 29.4% of Ivorians remain in poverty. Although reliable data are lacking, the situation was exacerbated by the post-election crisis. The UNDP’s 2012 Human Development Report shows that Côte d’Ivoire has a Human Development Index (HDI) of 0.4, slightly below the sub-Saharan Africa index of 0.463. Similarly, per capita income was USD 1,387, well below the USD 1,966 recorded for the region.

Côte d’Ivoire’s financial sector, the largest in the WAEMU zone, is not very different from that of other members. There are 21 banks, which account for most of the financial sector, equivalent to about 22% of GDP and 80% of the sector. In 2011, remittances amounted to USD 373 million, or about 1.6% of GDP.

Prevalence of predicate offences

The series of deadly attacks and the unstable security conditions point to continued smuggling and circulation of small arms and light weapons (SALW) in Côte d’Ivoire. This is shown by the destruction of about 600 SALW by the competent United Nations office in July 2012. A large proportion of the weapons and suspected weapons passed through Guinea, Mali and other neighbouring countries. Some former rebel commanders reportedly use the proceeds of diamond sales in northern Côte d’Ivoire to buy and traffic weapons in the country. Although diamond production has fallen, an estimated USD 23 million comes from the illicit diamond trade.

Côte d’Ivoire continues to experience a series of other criminal activities, notably cybercrime and smuggling. An estimated CFA francs 3 billion was stolen from three Ivorian banks by cybercriminals in 2012. The Director of Pharmacy at the Ministry of Health reported a loss of CFA francs 21 billion owing to the smuggling of narcotics in 2012. In addition, cocoa smuggling, particularly from neighbouring Ghana, remains widespread, largely because of the large price differences between the two countries.

The seizure of 1,200 kg of narcotics, including an unknown quantity of cannabis, with a market value of about CFA francs 12 million, by customs officers in the Bondoukou department illustrates the persistence of illicit drug trafficking and production in Côte d’Ivoire. With regard to corruption, Côte d’Ivoire scored 29 out of 100 and was ranked 130th out of 174 countries on Transparency International’s 2012 Corruption Perceptions Index (CPI), compared with 154th out of 182 countries in 2011.

AML/CFT situation

Côte d’Ivoire’s AML/CFT policy was evaluated by GIABA in May 2012. The Mutual Evaluation Report (MER) was discussed at the 18^th GIABA Plenary, held in Dakar, Senegal, on 20-22 November 2012. The MER found that the country has signed and ratified the main conventions on organised crime, namely the 2000 Palermo Convention against Transnational Organized Crime, the 2003 Merida Convention against Corruption, the Vienna Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, and the 1999 United Nations Convention for the Suppression of the Financing of Terrorism.

Following the sustained advocacy of GIABA’s Director General with Côte d’Ivoire’s political leaders in November 2011 and February 2012, the country made remarkable progress on AML/CFT. Not only was the FIU’s budget increased to about CFA francs 1 billion, but its chairman was also appointed National Correspondent to GIABA. The FIU signed partnership agreements with its counterparts in France, Belgium and Lebanon, and established contacts with the financial intelligence units of Ghana and Morocco.

The FIU also carried out a study on the «vulnerabilities of the Ivorian economy to ML/TF, particularly in the housing and agriculture sectors». As part of its networking, the FIU welcomed the organisation of the WAEMU FIU Forum, and its chairman was subsequently appointed to head the body. The FIU also regained its membership of the Egmont Group.

Nevertheless, considerable challenges remain in Côte d’Ivoire, not least because compliance with AML/CFT standards and the implementation of the MER recommendations may prove challenging. Behind these challenges lie, in particular, the absence of a national AML/CFT strategy and of an effective freezing mechanism as required by FATF R6.

Despite passing its anti-money laundering law in 2005, the Ivorian authorities have still not tried a single money laundering case. The law therefore remains to be implemented. For example, of the sixty-one (61) suspicious transaction reports (STRs) received by the FIU between November 2011 and September 2012, only one (1) was investigated and the report sent to the judicial authorities. There is still no information on the action taken by the judicial authorities in this case. Supervisory and monitoring bodies lack specific legal and operational powers under the anti-money laundering law, making it difficult for them to detect and prevent ML/TF cases. In addition, the existing legal instrument on terrorist financing, namely Order No. 2009-367 of 2009, fails to clearly define «terrorist organisations» or individual «terrorists» as required by international standards.

Furthermore, the conditions set for implementing Security Council Resolution 1267 (1999) on the confiscation of funds and other financial resources of persons and entities designated by the UN Security Council leave much to be desired. The procedure set out in Community Regulation No. 14/CM/UEMOA of 19/09/2002 imposes a decision-making process and the communication of lists to reporting entities, a procedure that is relatively cumbersome. In addition, there is no coordination or monitoring of the effective implementation of confiscation decisions. The Security Council lists are not widely circulated to banks, which, incidentally, do not receive notices relating to these lists. Nor are there clear instructions or guidelines to help decision-makers understand and effectively implement Resolutions 1267 (1999) and 1373 (2001).

Technical assistance

In addition to the high-level missions led by the Director General for the conduct of Côte d’Ivoire’s mutual evaluation and the holding of GIABA Ministerial Committee and Plenary meetings, GIABA supported the country in organising a pre-evaluation workshop from 5 to 7 March 2012. The main objectives of the preparatory mutual evaluation seminar were essentially to:

(a) inform national stakeholders and raise their awareness of the importance of the mutual evaluation and the preparation process so that they would be fully involved in the project and ensure the success of the exercise, and (b) use the workshop to update the Mutual Evaluation Questionnaire (MEQ) submitted to the GIABA Secretariat in October 2009. Some sixty (60) participants representing the various sectors of public and private administration in Côte d’Ivoire attended the seminar.

Since the adopted MER revealed significant gaps, particularly in a number of key recommendations, Côte d’Ivoire needs additional technical assistance to establish an effective AML framework, including developing its legislative and regulatory frameworks, in addition to a national AML strategy. Further investment is needed in capacity building for staff, including analysts, investigators and magistrates, as well as for the institutions responsible for implementing AML/CFT measures.

Conclusion

Côte d’Ivoire remains on course towards long-term peace and stability. Yet it remains beset by insecurity, violence and political tensions. At the same time, organised criminal activities, including illicit arms trading, cybercrime, smuggling of goods and drug trafficking, among others, persist in Côte d’Ivoire. The country is still striving to comply with international AML/CFT standards, not least because its AML/CFT framework remains particularly weak. Côte d’Ivoire must therefore take steps to implement the recommendations of its mutual evaluation report, including criminalising individual terrorist acts, developing an asset-freezing mechanism in line with United Nations Resolutions 1267 and 1373, and finalising and adopting its national AML/CFT strategy to ensure synergy and coordination in its efforts.