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The Financial Action Task Force (FATF) took Senegal off the list after the country strengthened its measures to combat money laundering and terrorism financing, including implementing targeted financial sanctions and adopting a new bill against illicit financing.
The Financial Action Task Force (FATF) took Senegal off the list after the country strengthened its measures to combat money laundering and terrorism financing, including implementing targeted financial sanctions and adopting a new bill against illicit financing. Studies show that greylisting can lead to a decline in capital flows. Removal of Senegal from the global “dirty money” grey list is likely to boost investors’ confidence
Since Senegal’s 2021 gray-listing, the Government of Senegal has tightened regulations, with penalties now in place for non-compliant financial institutions. Senegal’s eurobonds were among the worst emerging market performers this month after the IMF flagged issues with underreported financial data impacting its USD 1.5 billion program, and S&P Global revised the country’s credit outlook to negative. While the historical impact of greylisting on finances remains inconclusive, studies conducted after 2016 have reported a decline of up to 16% in cross-border payments.
A study by the International Monetary Fund (IMF) conducted in 2021 and authored by Kida and Paetzold examined the impact across all financial flow measures. This study, which used more recent data and the most comprehensive list of grey-listed countries, revealed an average decline in capital flows equivalent to 7.6% of gross domestic product (GDP).
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The Financial Action Task Force, also known by its French name, Groupe d’action financière, is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat money laundering and to maintain certain interests. In 2001, its mandate was expanded to include terrorism financing.
