(Bloomberg) -- Senegal is poised to be removed from a global dirty-money list as early as next week, a potential boost to the West African nation following a reform push to counter money laundering and terrorist-financing risks.
A recent on-site visit by a team from the Paris-based Financial Action Task Force noted significant progress, according to people familiar with the matter, who requested anonymity as the deliberations are private. That means Senegal could come off the watchdog’s so-called gray list on the final day of the FATF plenary on Oct. 25, the people said. No final decisions have been made.
A spokesperson for the FATF declined to comment, citing the confidential nature of the discussions. A Senegal government spokesman declined to comment on the matter when reached by phone.
The expected change could boost Senegal’s efforts to attract foreign capital after a spate of negative news led to a brief selloff of its eurobonds.
Moody’s Ratings cut the nation’s credit rating further into junk status earlier this month and placed it on watch for further downgrade after an audit instituted by newly elected President Bassirou Diomaye Faye showed the budget deficit at more than 10% by the end of 2023 — almost double the 5.5% reported by the previous administration.
On the Cusp
The country, which secured a $1.8 billion funding arrangement from the International Monetary Fund in 2023, is on the cusp of becoming a significant oil and gas producer. Projects involving BP Plc and Kosmos Energy Ltd. are due to come online this year and the economy is forecast to grow 6%.
A significant majority of the FATF’s members must vote that Senegal has made sufficient progress for it to be taken off the gray list. Just a few votes to the contrary — some members have more sway than others — could result in it remaining on the list, the people said. Members include individual countries like the US and China as well as regional bodies such as the European Commission.
The nation was originally added to the FATF’s list of jurisdictions under increased monitoring in February 2021.
Final Stages
The FATF, at its most recent plenary in June, said Senegal “substantially completed its action plan.” That included reforms tied to its financial intelligence unit, beneficial ownership and money-laundering probes.
Senegal has also strengthened its targeted financial sanctions regime, according to Madicke Niang, an expert with the FATF-style regional body for West Africa. Like some African peers, one challenge for Senegal is its large informal economy, which makes tracing of capital “difficult,” he said.
Mamadou Ndiaye, a technical adviser at Senegal’s Ministry of Finance, told a forum on banking compliance last month that Senegal was in “the final stages” of exiting the dirty-money list.
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