Senegal

Political situation

Senegal has maintained its image as a beacon of peace and stability and a model of democratic governance in West Africa. However, the country’s credentials for peace and democracy were severely tested by a serious political and constitutional situation in early 2012, caused by a dispute over the eligibility of the incumbent President, Abdoulaye Wade, to stand for another term. This led to a series of violent demonstrations that put many of the country’s achievements at risk. The country returned to normal when the President was defeated in a run-off by the opposition candidate, Macky Sall, in March 2012. The new President’s coalition, Benno Bokk Yakaar (United in Hope), subsequently won the parliamentary elections by a landslide in July 2012.

A glimmer of hope for national reconciliation, and particularly for bringing peace to the rebellion in the south (Casamance), came with the release of eight (8) Senegalese soldiers who had been held hostage for more than a year by the Movement of Democratic Forces of Casamance (MFDC). His Excellency President Macky Sall, while welcoming the released officers, said he had taken note of the signal sent by the separatist movement and would work to restore lasting peace.

Economic and financial situation

Senegal’s economy was expected to grow by 4.2% in 2012 and 4.7% in 2013, compared with 4% in 2011. These forecasts were slightly above the 3.7% and 4.3% projected by the International Monetary Fund for 2012 and 2013 respectively. The expected growth was largely attributable to higher private consumption, driven by remittances from Senegalese working abroad, and to expansion in the industrial and service sectors. Meanwhile, the growth rate of the primary sector was expected to fall from 10.8% in 2011 to 8.9% in 2012. Industrial agriculture was expected to rise by 28.4% in 2012, following a 41.3% fall in 2011. Subsistence agriculture was also expected to rise by 9.8% in 2012, after a 10.3% fall in 2011. This was mainly due to well-distributed rainfall and State support for producers.

Senegal’s financial sector, promising and with great potential, is nonetheless dominated by banks. There are 19 deposit banks, which hold 80% of the sector’s total assets and represented about 29% of GDP in 2010. Remittance inflows, according to World Bank estimates for 2011, amounted to USD 1.48 billion, or about 10.3% of GDP. All this calls for close monitoring of remittance inflows, as they have AML/CFT implications.

The secondary sector was expected to record a small increase of 2.7% in 2012, after growth of 5.5% and 7.2% in 2010 and 2011 respectively. This is attributable, among other things, to the slowdown in the construction materials and fishing industry sub-sectors, and particularly to the poor performance of the edible oil sub-sector, which suffered from a fall in groundnut harvests that in turn hurt the production of crude and refined oil. Overall, the sub-sector recorded -51.1% in 2012, compared with -21% in 2011. The tertiary sector showed the same trend, with growth of 2.9% in 2012 compared with 4% in 2011. Inflation as measured by the Harmonised Index of Consumer Prices (HICP) averaged 2%, compared with 3.4% in 2011.

With regard to public finances, the government received CFA francs 1,723.2 billion while expenditure amounted to CFA francs 2,148.7 billion. The public deficit stood at CFA francs 425.4 billion, or 5.9% of GDP in 2012, compared with CFA francs 455 billion, or 6.7% of GDP, in 2011.

Total public debt rose by 12.5%, from CFA francs 2,704.2 billion in 2011 to CFA francs 3,041.1 billion in 2012. As a percentage of GDP, public debt increased slightly from 39.7% in 2011 to 42.1% in 2012. This is well below the West African Economic and Monetary Union (WAEMU) ceiling of 70% of GDP.

The World Bank’s Doing Business report ranked Senegal 154th in 2012, compared with 157th in 2011. This is due to the government’s efforts to improve the business climate by focusing on modernisation and competitiveness. The country scored 36 out of 100 and was ranked 94^th on Transparency International’s Corruption Perceptions Index, compared with 112^th the previous year. It also scored 56.2 out of 100 and was ranked 16^th out of 52 countries in the 2012 Mo Ibrahim Index of African Governance.

At the same time, Senegal continued to face a series of socio-economic challenges, as sustained growth has not translated into broad-based prosperity. Unemployment in particular remains a major problem, with the youth employment rate 25% lower than that of adults. Inequality remains widespread, as social protection initiatives are limited to employees in the formal sector, who make up less than 20% of the population. However, the President of Senegal announced the government’s plans to raise public sector salaries by cutting taxes by CFA francs 29 billion, and to create 5,000 jobs in the public service.

Prevalence of predicate offences

Predicate offences, particularly drug trafficking, remained major challenges in Senegal during the reporting year. In August 2012, for example, law enforcement agencies dismantled a vast counterfeit currency network and arrested two Lebanese-Syrian nationals. Significantly, a Senegalese member of the network was a close associate of a Politically Exposed Person (PEP) in the country. Searches and seizures by the national police led to the seizure of counterfeit EUR 500 and USD 100 notes intended for laundering. Law enforcement officers also arrested a well-known events promoter, a hotel manager and an undetermined number of customs officers for their alleged involvement in extortion and cocaine trafficking in the seaside resort of Saly. A search by two Senegalese customs officers led to the discovery of 39 cocaine pellets in the areas searched. All the individuals concerned were arrested and questioned, and investigations are ongoing.

Also worth highlighting is the work of the Central Office for the Repression of Illicit Drug Trafficking (OCRTIS), which, after seizing 3 kg of cocaine from a Guinean singer, dismantled a vast international drug trafficking network using Dakar as a transit point. Continuing its activities, OCRTIS made another seizure of no less than 2 kg of cannabis after a body search of a suspect who was living in a rented room that he used as a storeroom. This search led police officers to find a plastic bag on him containing the herb.

From January to June 2012, the CENTIF (FIU) received 58 suspicious transaction reports (STRs), sent 4 reports to the Ministry of Justice and closed 13 cases. The serious offences underlying the STRs included fraud, forgery and use of forged private documents, corruption, drug trafficking and aggravated advance-fee fraud (419). During the same period, the following judicial decisions were recorded at the Ministry of Justice: release (2); dismissal (1); conviction (1).

AML/CFT situation

During the review period, Senegal took important legislative and regulatory measures to make its AML/CFT regime more effective, particularly in combating illicit enrichment. To enforce the law on illicit enrichment, the President issued Decree No. 2012-502 of 10 May 2012 appointing the judges of the Court for the Repression of Illicit Enrichment and the members of its investigating committee.

In addition, the government submitted Law No. 13/2012 establishing the National Anti-Corruption Office (OFNAC), which was adopted by the National Assembly at its session of 19 December 2012.

OFNAC was created from the former National Commission against Corruption and Extortion (CNLCC). OFNAC is made up of 12 members appointed by decree for a three-year term, renewable only once. The new law once again strengthens the anti-corruption body’s power to confiscate assets (Article 12) and to report to the prosecutor on allegations of corruption and related offences (Article 14), among other things.

Under the leadership of the Financial Intelligence Unit (CENTIF), Senegal continued to develop its national AML/CFT strategy document, which, owing to some delays, was not finalised by the end of September 2012 as planned. However, the process is in its final phase and has benefited from the participation of civil society.

The CENTIF continues its training activities for magistrates and criminal investigators on topics such as financial investigation methods and the organisation of investigation files, auditing accounts and detecting fraudulent transactions, etc. In addition, the CENTIF organises training workshops for legal auditors, accounting experts and auditors, bank compliance officers and representatives of decentralised financial systems, in support of the Professional Association of Decentralised Financial Systems (AP-SFD).

The CENTIF continues to train its staff on the use of the Analyst’s Notebook tool, as well as on financial investigation of complex data, State financial operations and investigations into workplace fraud, misuse of public property, etc. This training will certainly help improve the quality of the analyses conducted, so that high-quality reports can be sent to the courts.

On 24 May 2012, the Director General paid a courtesy call on His Excellency Macky Sall to congratulate him on his well-deserved popular election and to draw his attention to the insufficient prosecution of money laundering cases, despite the large number of cases referred to the Public Prosecutor by the CENTIF. Even where such crimes have been brought to trial, the outcomes have been seriously questioned by lawyers and the international community. In his reply, the President informed the Director General that his government was founded on transparency and accountability, that he had given instructions for the creation of an asset recovery commission, and assured him that justice would be done in all cases.

Technical assistance

Senegal requires technical assistance in training magistrates and judicial police officers, technical support for managing cross-border cash couriers and bearer negotiable instruments (BNIs), monitoring reports, and establishing a national database on financial and economic offences, including ML/TF. The country also needs support to implement its national AML/CFT strategy, which is being finalised.

Conclusion

In the light of the legislative and regulatory acts undertaken by the new Senegalese authorities, it is clear that Senegal has shown a firm intention and determination to fight corruption, curb the embezzlement of public funds and, above all, eradicate mismanagement. The country needs to be supported in this drive by its technical and financial partners so that these actions are successful. When some people read, or have read, our previous reports, they asked whether the proliferation of real estate in Senegal was not linked to money laundering. It should be noted that money laundering is defined by the source, origin, possession, movement and purpose of wealth, not by speculation about its size or how it is managed.