Togo

Political situation

Togo’s democratic transition, which began towards the end of GNASSINGBE EYADEMA’s thirty-eight-year rule in 2005, is still under way. The country’s political situation has been marked by violent clashes between opposition supporters and the security forces, as well as numerous arrests, which helped the ruling party remain in power.

The situation was further complicated by the unexpected resignation of the Prime Minister and his government just before the parliamentary elections in October 2012, raising fears of possible insecurity.

According to the 2012 BERTELSMANN Transformation Index, Togo scored 5/10 for political transformation, compared with 6/10 in 2010, showing that the country is on a downward trend. However, Togo recorded notable improvements in governance indicators. For example, Reporters Without Borders ranked it 79th out of 179 countries (79/179) in 2011-2012 for individual freedoms, a jump of 19 places compared with the previous ranking.

Economic and financial situation

Despite a tense political situation, Togo’s economy continued to perform well. According to African Development Bank (AfDB) projections, GDP growth was expected to rise slightly from 3.9% in 2011 to 4.2% in 2012, then 4.4% in 2013. Nevertheless, the growth rate forecast for 2012 was below the 5% and 5.2% projected by the International Monetary Fund (IMF) and the World Bank respectively.

Economic growth has not translated into lower poverty and unemployment. Despite promising economic growth in Togo, 67.7% of the population lives below the poverty line. Most of the poor live in rural areas (74.3% compared with 36.7% in urban areas). Togo ranks 162nd out of 180 on the Human Development Index (HDI). The Human Development Report indicates that 38.7% of Togolese live on less than USD 1.5 a day. This very alarming figure is the result of the long years of social and political crises that have marked the country and wiped out its development efforts. The literacy rate is 56.9%, life expectancy is 57.1 and the infant mortality rate is 6.6%. The World Bank’s Doing Business 2012 report indicates that Togo has 53 different types of taxes, compared with an average of 37 in sub-Saharan African countries. In terms of regulations for starting a business, Togo ranks 174th, a fall of five places compared with the previous year.

The socio-economic situation is dire with regard to the rapid rise in youth unemployment. In addition, growing corruption and shrinking economic opportunities for the population are widening the social divide and increasingly marginalising young people. This scenario makes the country vulnerable to predicate offences that can lead to ML/TF.

Prevalence of predicate offences

Togo has a criminogenic environment similar to that of other countries in the WAEMU zone. The country report submitted by the Togolese authorities to GIABA in 2012 highlights the predominance of the following offences: drug trafficking, bank fraud, cybercrime, corruption in the award of public contracts, counterfeiting and forgery. With regard to corruption, the report particularly notes the crucial role of PEPs in obtaining public contracts, non-compliance with procedures and over-invoicing. Bank fraud stems in particular from the absence of customer due diligence (CDD) procedures, the lack of capacity of law enforcement agencies and the absence of banking supervision. Togo remains vulnerable to human trafficking, which is still not criminalised under Togolese law (except for child trafficking and prostitution). Transparency International ranked Togo 128th out of 174 countries with a score of 30/100 in 2012. The World Bank’s Doing Business 2012 report ranks Togo 162nd out of 183 countries, a drop compared with its 158th place in 2010. Togo slipped because of certain constraints, such as a decline in its capacity to protect investments.

With regard to drug trafficking, the US State Department report indicates that Togo is not a major drug producer. Cannabis is the only drug grown in large quantities in Togo, and it is grown solely for local consumption, contrary to allegations that small retailers sell drugs across national borders. Togo has also become a transit point for heroin and cocaine, playing an increasingly important role in regional drug trafficking. Togo’s ability to deal with the transnational movement of drugs is hampered by extreme poverty, a lack of resources and training, its long and porous borders and an inability to control corruption. Seizures of illicit drugs by law enforcement authorities have been observed in recent years. In July 2012, a joint anti-drug operation by the police services of Togo, Benin and Ghana, carried out with Interpol, seized a total of eight (8) tonnes of drugs, including cannabis, cocaine, heroin and synthetic drugs. The largest seizure, however, was made in Togo, with seven (7) tonnes of psychotropic substances. This regional operation, conducted under the ECOWAS Regional Action Plan to address illicit drug trafficking, led to the arrest of seventy-four (74) traffickers.

AML/CFT situation

Togo presented its first follow-up report on its mutual evaluation at the meeting of the GIABA Technical Commission and Plenary in May 2012. The review clearly showed that Togo had made little progress in improving its national AML/CFT system. It mainly improved the legal and regulatory framework by adopting Law No. 2011-009 of 12 May 2011 on the regulation of decentralised financial systems and the Statistics Law of 9 May 2011. The Ministry of Economy and Finance also signed Circular No. 015/MEF/CENTIF on 8 February 2012, formally prohibiting banks from carrying out transactions with shell banks and from opening anonymous accounts, and requiring them to apply customer due diligence for AML/CFT purposes.

Togo has now set up an Ad Hoc Inter-Ministerial Committee made up of officials from the Ministries of Foreign Affairs and Cooperation; Defence; Security and Civil Protection; Economy and Finance; Trade; and Justice. Its mission is to ensure that Togo complies with Security Council resolutions, including resolutions 1267 and 1373, and to prepare a list of terrorist individuals and entities as well as the periodic reports required by those and other Security Council resolutions. However, the effectiveness and/or efficiency of these measures has yet to be assessed.

With regard to the activities of the CENTIF, a template STR form is now available on the CENTIF website for use by reporting entities. In addition, awareness seminars were held on the general AML/CFT obligations of legal persons, together with working sessions with the focal points of certain entities (internal auditors and compliance officers in banks). As regards STRs, the CENTIF stated that it had received nine (9) between January and September 2012, but none had yet been referred to prosecutors. However, the CENTIF is exchanging information with three FIUs, namely TRACFIN in France, the CENTIF of Côte d’Ivoire and the FIC of Ghana.

At the operational level, procedures for allocating funds to the CENTIF have been simplified and its resources increased, with a budget that enabled it to acquire four (4) additional vehicles and six (6) computers and accessories, recruit an analyst, an IT specialist and two secretaries, and hire a private investigator. A plan has also been drawn up for a database management information system.

Technical assistance

In 2012, Togo took part in training sessions funded by development partners, in particular on financial analysis and fraud detection. GIABA organised several regional training activities in which Togo took part, such as the financial sector training workshop in Niger and the journalists’ training workshop in Cabo Verde. Apart from these regional programmes, GIABA supported several AML/CFT training and awareness activities held in Togo, as well as activities on drug control and organised crime prevention under the UNODC-funded Integrated National Programme. The UNODC programme also organised a seminar on strengthening the AML/CFT legal and institutional framework as part of its own activities. The CENTIF will receive UNODC support to purchase a server and to finalise a draft law on human trafficking. CENTIF members will also make a study visit to the United States, funded by the US State Department. At the end of June 2012, the World Bank had a portfolio of sixteen projects financed for a total of USD 189 million. All these elements point to a positive economic outlook needed to facilitate human development in the country. Other needs for Togo are:

• Capacity building: training judges and prosecutors on the classification of money laundering and terrorist financing offences and on the recovery of criminal assets;
• providing training for journalists to involve them in efforts to raise awareness of and disseminate information on AML/CFT;
• providing training for analysts; and
• providing training for investigators;
• helping the Togolese CENTIF become a member of the Egmont Group in order to expand the AML/CFT intelligence network; and
• providing more material resources: securing the CENTIF premises by installing a video surveillance system and setting up an information system and a secure database.

Conclusion

Like other West African countries, Togo is affected by illicit trafficking and the re-export of drugs to Europe on behalf of Colombian and Mexican cartels. The quantity of drugs seized and the growing number of drug users in the past year are indicators of the security challenge this phenomenon now poses. This drug trafficking could, in turn, fuel a resurgence of crime in Togo, particularly money laundering.

The review of Togo’s first follow-up report shows that the progress made is marginal. There are no statistics to assess the effectiveness of efforts to combat money laundering and terrorist financing. Togo has tried unsuccessfully to adopt a national AML/CFT strategy since 2009. On national AML/CFT coordination, very few initiatives have been taken, mainly because the Inter-Ministerial Committee has not functioned. The Togolese authorities should therefore be encouraged to step up their efforts to implement the recommendations of the country’s joint evaluation report and to carry out regular follow-up, as has been the case since May 2011.