2024 Rwanda National Risk Assessment on Money Laundering and Terrorist Financing

NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 2024 - REPORT

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 2 ACRONYMS 5 EXECUTIVE SUMMARY 7 KEY FINDINGS OF THE NATIONAL ASSESSMENT REPORT 8

INTRODUCTION 11
ASSESSMENT OF MONEY LAUNDERING RISK 15
3: TERRORIST FINANCING RISK ASSESSMENT 53 4: LEGAL PERSONS AND LEGAL ARRENGEMENTS RISK ASSESSMENT 64 5: VIRTUAL ASSETS AND VIRTUAL ASSETS SERVICE PROVIDERS ML/TF RISK ASSESSMENT 75
FINANCIAL INCLUSION PRODUCT RISK ASSESSMENT 81
TAX CRIMES ML RISK ASSESSMENT 87
NON-PROFIT ORGANISATION TERRORIST FINANCING RISK ASSESSMENT 94
ENVIRONMENTAL AND NATURAL RESOURCE CRIMES RISK ASSESSMENT 101
GENERAL KEY RECOMMENDATIONS 105
CONCLUSION 108
APPENDICES 109
CONTENTS

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 3 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT DISCLAIMER The National Money Laundering and Terrorist Financing (ML/TF) Risk Assessment of Rwanda has been conducted as a self-assessment by Rwanda authorities, using the National ML/TF Risk Assessment Tools that have been developed and provided by the World Bank Group. The World Bank Group project team’s role was limited to delivery of the tools, providing guidance on the technical aspects of the tools, and review/feedback to assist with the accurate use of it. Data, statistics, and information used for completing the National ML/TF Risk Assessment Tool, as well as findings, interpretation, and judgment under the scope of National ML/TF Risk Assessment, completely belong to the Rwanda authorities and do not reflect the views of the World Bank Group.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 4 Rwanda remains firmly committed to combating money laundering (ML) and terrorist financing (TF) through robust legal, institutional, and operational frameworks. To better understand the country’s exposure to ML/TF risks, take appropriate mitigating actions and ensure alignment with evolving international standards, Rwanda updated its National Money Laundering and Terrorist Financing Risk Assessment in November 2024. This update built upon the foundation established in the initial risk assessment conducted in 2017/18, incorporating new data, emerging threats, and lessons learned. The updated assessment aimed to provide a more comprehensive and nuanced understanding of national threats and vulnerabilities and sector-specific vulnerabilities, enabling the identification of priority areas for intervention. By updating its risk assessment, Rwanda reaffirmed its commitment to strengthening AML/CFT systems and tackling evolving financial crime risks. The updated insights will inform targeted countermeasures, while continuous updates and proactive strategies will address emerging threats. These efforts are designed to bolster financial integrity, enhance resilience against illicit activities, and position Rwanda as a secure and trusted financial hub on the global stage. Yusuf MURANGWA Minister of Finance and Economic Planning and Chairperson of Coordination Council responsible for preventing and fighting money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction Foreword

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 5 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT ADF/ISCAP Allied Democratic Force/ Islamic State-Central Africa Province AEOI Automatic exchange of information ISCAP Islamic State-Central Africa Province AML/CFT Anti-Money Laundering/Countering the Financing of Terrorism CFT Countering the Financing of Terrorism ATAF African Tax Administration Forum BNIs Bearer Negotiable Instruments BO Beneficial Ownership CBFs Common Benefit Foundations CBDC Central Bank Digital Currency CDD Customer Due Diligence CNRD-FLN Conseil National pour le Nouveau et la Démocratie-Force Libération Nationale CMA Capital Market Authority CT Counter Terrorism CTF Counter Terrorist Financing DTAAs Double Taxation Avoidance Agreements DNFBPs Designated Non-Financial Businesses and Professions EAC East African Community ECDD Enhanced Customer Due Diligence EOIR Exchange of information on request FATF Financial Action Task Force FBOs Faith-Based Organizations FDLR Forces Démocratiques de Libération du Rwanda FIC Financial Intelligence Centre GDP Gross Domestic Product ICPAR Institute of Certified Public Accountants of Rwanda JOC Joint Operations Centre KIFC Kigali International Financial Centre LEA Law Enforcement Agency ML Money Laundering MINIJUST Ministry of Justice ACRONYMS

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 6 MLA Mutual Legal Assistance MINICOM Ministry of Trade and Industry MINAFFET Ministry of Foreign Affairs and International Cooperation NBR National Bank of Rwanda CC Coordination Council NGOs Non-Governmental Organizations NPPA National Public Prosecution Authority NPO Non-Profit Organization NRA National Risk Assessment MFIs Micro-Finance Institutions PEP Politically Exposed Person PF Proliferation Financing RBA Risk Based Approach RBA Rwanda Bar Association RDB Rwanda Development Board RGB Rwanda Governance Board RG Registrar-General RIB Rwanda Investigation Bureau RNC RWAREB Rwanda National Congress Rwanda Association of Real Estate Brokers STR Suspicious Transaction Report TF Terrorist Financing TFS Targeted Financial Sanctions TCSPs Trust and Company Service Provider (s) TF Terrorist Financing UNSC United Nations Security Council UNSCR United Nations Security Council Resolution VAs Virtual Assets VASPs Virtual Assets Service Provider (s) MoE Ministry of Environment

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 7 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT EXECUTIVE SUMMARY Rwanda, a rapidly growing economy in East Africa, is striving to establish itself as a regional financial hub in alignment with its Vision 2050. The country made significant strides in modernizing its financial and legal systems, developing a robust AML/CFT framework that includes the establishment of the Financial Intelligence Centre (FIC) and elaboration or revision of relevant legal and regulatory instruments. These efforts aimed to strengthen the detection, disruption, and penalization of ML and TF, fostering a more secure and transparent financial environment. The 2024 National Risk Assessment (NRA) builds on the 2018 National Risk Assessment, incorporating updates from previous findings, addressing recommendations from the second round of Mutual Evaluation (MER), and aligning with Financial Action Task Force (FATF) standards to address emerging risks. The assessment focused on enhancing risk mitigation strategies for financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs), advancing the development of a robust AML/CFT framework. The 2024 NRA utilized World Bank Assessment Tools to evaluate ML risks at national and sectoral levels, focusing on the financial sector, DNFBPs, financial inclusion, virtual assets, environmental resources, tax crimes, legal structures, NPOs, and terrorist financing. A multidisciplinary team from the public and private sectors conducted the assessment, with the World Bank providing tools and technical guidance. A public perception survey was also conducted to gather insights. This collaborative approach enabled a comprehensive assessment of Rwanda’s AML/CFT landscape, identifying key vulnerabilities and areas for improvement. In addition, NRA action plan was developed as a strategic roadmap to guide the implementation of key recommendations. This plan aimed to further enhance Rwanda’s AML/CFT framework, ensuring a proactive and adaptive response to evolving financial crime threats.

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National Money Laundering risk
The assessment evaluated Rwanda’s ML threats and vulnerabilities, considering both domestic and international factors. The domestic ML threat assessment analyzed the prevalence of predicate offenses, the amount of illicit proceeds generated and associated ML cases identified. The assessment identified embezzlement, fraud, tax crimes, and cybercrimes as the top four predicate offenses with large amounts. The international ML threat assessment examined inflows and trading partners. However, no money laundering-related cases were identified in connection with inflows or trading partners. As a result, the overall ML threat was rated Medium. The national ML vulnerability assessment considered the country’s ML combating ability and sectoral vulnerabilities. It highlighted notable improvements since the 2018 NRA, including amendment of AML/CFT legislation, developments of other relevant regulatory instruments, the establishment of the Financial Intelligence Centre (FIC) and Coordination Council (CC), and improvements in supervision. Despite these achievements, some gaps were identified in areas of beneficial ownership transparency, implementation of risk-based approaches, investigative and prosecutorial capacities, and asset recovery. As a result, the overall ML vulnerability was rated Medium. The combination of the analysis of overall ML threat (rated Medium) and the overall ML vulnerability (rated Medium) leads to rating of the overall ML risk as Medium.
Terrorist Financing risk
Rwanda’s TF risk assessment rated the overall TF risk as Medium, derived from a Medium threat level and a Medium-Low vulnerability rating. The overall TF threat rating stemmed from a Low domestic threat and a Medium-High external threat. The external threat was driven by the presence of active terrorist groups in neighboring countries, which may engage in cross-border activities to support militant operations and, at times, carried out terror attacks to Rwanda. The overall TF vulnerability rating reflected improvements in vigilance, stakeholder information sharing, strengthened border controls, awareness campaigns, increased efforts by law enforcement agencies in countering TF, and the commitment of reporting entities to implement Counter Terrorist Financing (CTF) measures.
Sectorial ML/TF Risk Financial
sector risk assessment Financial sector risk assessment highlighted varying levels of exposure to ML and TF. The banking sector, e-money issuers, and forex bureaus were identified as having the highest exposure to ML risks, with their risk level rated Medium. Moreover, e-money issuers and the money remittance services were also found to be more susceptible to TF abuse, with their risk assessed as Medium-Low. KEY FINDINGS OF THE NATIONAL ASSESSMENT REPORT Rwanda’s 2024 NRA on ML and TF covers the assessment period from July 2019 to June 2024, serving as an updating to the 2018 NRA. It identifies key threats, vulnerabilities, and risks for ML and TF, and highlights the emerging criminal methods for laundering and proposes targeted measures to enhance Rwanda’s AML/CFT framework.

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4. DNFBPs sector risk assessment
The assessment determined that within the DNFBP category, the real estate sector is the most exposed to ML, rated MediumHigh mainly due to ML cases involving the sector and the absence of legal and regulatory framework governing the sector. Similarly, the Bailiffs sector was also identified as being more vulnerable to ML, with a rating of Medium-High. The rest of the DNFBPs were rated Low to ML. TF abuse within the DNFBP sector was also rated as Low.
5. Legal persons and legal
arrangements risk assessment The assessment rated the threat of ML through the abuse of legal structures as medium-low and the overall vulnerability to ML as medium, resulting in a Medium overall ML risk score. Foreign companies and private companies limited by shares were identified as more likely to be exploited for ML, primarily due to the limited liability for shareholders, significant financial flows and assets as well as their involvement in predicate offenses and ML related cases.
6. Virtual asset and VASPs assessment
The Virtual Assets (VA) and Virtual Asset Service Providers (VASPs) sector in Rwanda has a Medium-Low exposure to ML. This rating is based on a combined Low threat level and Medium-Low vulnerability. The sector’s vulnerabilities stem from the absence of regulatory frameworks and limited expertise among law enforcement, regulators, and financial service providers. The primary crimes linked to virtual assets in Rwanda are fraud, including fraudulent investment schemes and fake coin exchanges. They were no TF cases involving VAs and VASPs identified during the assessment. The sector’s TF vulnerability is rated Medium-Low resulting from the absence of regulatory frameworks and the limited expertise among law enforcement, regulators, and financial service providers. Hence VAs and VASPs risk is medium-low.
7. Financial Inclusion Product Risk
The assessment rated the overall exposure of financial inclusion products to ML and TF risks as Medium-Low. Thus is attributed to a strong legal framework supporting both financial inclusion and AML/CFT compliance. The threat was rated Low due to the absence of suspicious financial crime cases involving financial inclusion products, the low volume and value of transactions, income levels, thresholds, and KYC requirements while the vulnerability was Medium-Low resulting from the lack of clear definitions for financial inclusion products and the absence of specific guidelines for simplified KYC requirements.
8. Tax crimes risk assessment
The overall ML risk related to tax crimes was rated as Medium, with the tax crime threat assessed as Medium and vulnerability as Medium-Low. The relatively low rating is primarily due to the inadequate institutional capacity to effectively combat tax evasion. Moreover, although Rwanda has strong legal, institutional, and operational frameworks, tax evasion remains a significant challenge, accounting for 20% of the total proceeds of crime from 2019 to 2024.
9. NPOs sector TF abuse risk
The assessment revealed that the overall risk of TF abuse in the Non-Profit Organization (NPO) sector was Low, with both the ML threat and the sector’s ML vulnerability assessed as Low. The assessment determined that the total number of NPOs registered in Rwanda is
2366. NPOs falling under definition of FATF

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 10 are 1,888 including 1,089 National NGOs, 198 International NGOs, 531 Faith-Based Organizations (FBOs) and 70 Common Benefit Foundations (CBFs). From the above categories, FBOs were found to be more exposed to TF abuse mostly because they exchange cash in hands through fundraisings and offertories, followed by the CBFs and national NGOs, while international NGOs were found to be at the lowest level of TF abuse.
10. Environment and natural resource
crime risk
The ML risk related to Environmental and Natural Resource Crimes was rated Medium-Low, with the threat rated Medium and vulnerability Low. Weaknesses identified include the absence of indicators to detect environmental crimes in financial transactions, limiting reporting persons’ ability to report suspicious activities. The medium rating threat was largely due to number of domestic cases, with a few cases that originated from the neighbouring countries generating higher proceeds of crime compared to domestic cases.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 11 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT INTRODUCTION 1

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Country context
The Republic of Rwanda, known as the “Land of a Thousand Hills,” is a mountainous country at the heart of Africa’s Great Lakes region, covering 26,338 sq.km bordered by the Democratic Republic of Congo (DRC) to the west, Uganda to the north, the United Republic of Tanzania to the east and Burundi to the south. Rwanda’s population is estimated
13.2 million in 2022, according to the fifth
Population and Housing Census (NISR, 2023). Rwanda’s economy is growing and currently witnessed a notable growth of 9.7% in the first quarter of 2024. This surge is attributed to the robust performance of the industry and services sectors. The agriculture sector demonstrated significant improvements during the first season of 2024 compared to the same season in 2023, particularly in the production of food crops, which experienced substantial growth. The real Gross Domestic Product (GDP) growth stabilized at 8.2% in 2022 and 2023 and expanded at 1.50 % in the second quarter of 2024 over the previous quarter. The GDP growth rate averaged 2.35% from 2000 until 2024, reaching an all-time high of 13.20% (NISR, 2024). Rwanda is ranked second safest country in Africa, and it experiences comparatively high levels of stability and security by regional standards, and it has continued to protect its political stability (Global Finance Safety Index, 2024). Rwanda maintains its standing as the fourth least corrupt country in the Sub-Saharan Africa region, securing the top position in East Africa, and attaining the 49th spot globally (Corruption Perception Index 2023). The Rwandan government has put in place various incentives to facilitate commercial exchanges with other countries and attract international investors through the establishment of the Kigali International Financial Centre (KIFC); thereby positioning Rwanda as a regional financial services hub. The Government of Rwanda has put considerable efforts in establishing and maintaining quality relationships with other countries for peace, security and stability of the country, including collaboration and exchange of information with foreign countries on the basis of Mutual Legal Assistance (MLA) and the MoUs signed by competent authorities with their counterparts. In addition, FIC started application process to become a member of the Egmont Group to facilitate prompt exchange of information. To strengthen compliance with international standards against ML, TF, and proliferation financing (PF)—particularly the FATF Recommendations—Rwanda has implemented comprehensive legal and institutional frameworks. These include development of laws and policies and adoption of strategic initiatives to enhance the capacity and skills of key stakeholders. In addition, a number of institutions were established namely FIC, Rwanda Investigation Bureau (RIB) has dedicated divisions responsible for economic and financial crimes, Rwanda National Police has specialized anti-terrorism unit, and National Public Prosecution Authority (NPPA) has prosecutors dedicated to money laundering cases. Additionally, supervisory authorities have been designated to oversee the activities of financial institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs). These include the Central Bank and Capital Market Authority

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 13 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT for FIs, Rwanda Revenue Authority for Tax Advisors, Rwanda Mines and Petroleum and Gas Board (RMB) for Precious stones and metals, Rwanda Development Board (RDB) for Casinos, and the Ministry of Justice for Notaries. The Self-Regulatory Bodies such as ICPAR and Rwanda Bar Association are also responsible to ensure compliance with AML/CFT obligations by accountants and lawyers respectively. Moreover, Rwanda Governance Board (RGB) monitors the operations of NPOs to ensure that they are not abused for TF, and the Registrar General (RG) is responsible for registering companies and managing legal arrangements, among other duties. Rwanda’s regime to combat AML/CFT is enshrined in its primary AML/CFT law1 , supporting legal and regulatory instruments, relevant policies and strategies including the AML/CFT policy and anti-corruption policy. The anticorruption policy constitutes the overall policy framework of zero tolerance to corruption and national planning that seeks to support the implementation of government policies in the area of good governance. The country is embarked on the development/review of important laws and regulations to address different technical deficiencies. FATF Recommendation 1 requires countries to identify, assess and understand ML/ TF risks for country and implement appropriate risk-based measures. Rwanda, as a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) is obliged to comply with the FATF 40 Recommendations including the requirement to update its NRA. Acknowledging the need for a unified approach, Rwanda conducted its first ML/TFNRA in 2018 providing the country with an understanding of its ML/TF risk. According to the 2018 NRA, the ML risk was Medium while TF risk was Medium Low. Recognizing that the ML/TF risk may change with time, Rwanda has updated the risk assessment through the conduct of 2024 NRA. The 2024 NRA is informed by the 2018 NRA and the 2nd round MER 2024 which has indicated that the country has some understanding of its ML risks and limited understanding of TF risks. To ensure a comprehensive understanding of the current risks at national level and across all relevant sectors, the country decided to update the NRA. This 2024 NRA expanded its scope significantly to include areas that were not covered in the previous NRA, such as legal persons and arrangements, tax crimes, environment and natural resources crimes, VA and VASPs and the TF risk assessment for NPOs.
2. Objectives of the National Risk
Assessment
The 2024 NRA aims to identify, assess, and understand Rwanda’s current ML/TF risks and to take appropriate mitigation measures in order to protect the country’s economy and financial system from criminal exploitation and also to promote national security. 1 Law nº 001/2025 of 22/01/2025 on the prevention and punishment of money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction

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3. The National Risk Assessment Methodology
The assessment followed the FATF Methodology and used the World Bank’s Risk Assessment Tools to assess and evaluate ML/TF Risks and country’s capacity to mitigate those risks. The exercise was conducted by a multi-agency team, comprising of public and private sector representatives, coordinated by FIC under the guidance of the CC which is responsible for combating money laundering, terrorism financing, and the proliferation of weapons of mass destruction. The assessment covered Money Laundering Risk (Threat assessment, National vulnerability, Banking sector vulnerability , Security sector vulnerability, Insurance sector vulnerability, other financial institutions vulnerability, DNFBPs sector Vulnerability), Terrorist Financing Risk assessment , Financial inclusion products Risk assessment, Legal Persons and Arrangements, Money Laundering Risk Assessment, Virtual Assets and Virtual Asset Service Providers ML/TF Risk assessment, Environmental and Natural Resources Risk assessment, Non-Profit Organizations TF Risk Assessment, and Tax Crimes and Proceeds Threat Assessment. To supplement the World Bank’s Risk Assessment Tools, this NRA also utilized additional methodologies including, a public perception survey and interviews conducted with stakeholders from both the public and private sectors to gather insights on key variables. This process aimed to validate findings and provide a comprehensive comparison of qualitative and quantitative analysis. MODULE 1 MODULE 2 MODULE 9 MODULE 8 MODULE 3 to 7 Threat to SECTOR 1 Threat to SECTOR 2 Threat to SECTOR 3 Threat to SECTOR ... National TF THREAT National ML VULNERABILITY Vulnerability of SECTOR 1 Vulnerability of SECTOR 2 Vulnerability of SECTOR 3 Vulnerability of SECTOR ... National ML VULNERABILITY National ML COMBATING ABILITY National ML VULNERABILITY NATIONAL ML RISK NATIONAL ML RISK NATIONAL TF RISK FINANCIAL INCLUSION MODULE ML RISK SECT. 1 ML RISK SECT. 2 ML RISK SECT. 3 ML RISK SECT ... National ML THREAT
Figure 1: The structure of the WB’s Risk
Assessment tool

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 15 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT ASSESSMENT OF MONEY LAUNDERING RISK 2

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Money Laundering Risk at National
Level
2.1.1 Country context for money laundering
risk assessment
The 2018 NRA indicated that the overall ML Risk was Medium; this was derived from overall threat rated Medium-Low while Vulnerability was rated Medium. The analysis identified that the predominant predicate offenses were corruption/ bribery and embezzlement of funds while offenses generating the highest proceeds of crime were tax evasion and embezzlement. The assessment of ML risks at the sectoral level revealed that the banking, real estate, and money transfer sectors were MediumHigh, while for the securities, electronic money, and microfinance institutions (MFIs) were Medium-Low. Othersectors such as: life insurance, pension schemes, forex bureaus, accountants and auditors, lawyers, casinos, and precious metal and stone dealers, were rated Low.

In addition, the second round MER2 highlighted that the country has some understanding of its ML risks. Nonetheless, the ML risks from Legal persons and arrangement, VASPs were not understood.
2.1.2 Overall Money Laundering Risk
The overall risk is determined based on the rating of threat and vulnerability ratings. The analysis has indicated that both overall ML threat and vulnerability are medium. Hence, the overall ML risk is rated medium as indicated in the figure below.
Figure 2: Overall ML Risk
2Rwanda MER is found on https://www.esaamlg.org/index.php/Countries/readmore_members/ Rwanda

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 17 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT The national rating of ML threat was based on the assessment of the predicate offences generating highest proceeds and the most prevalent predicate offenses at the national and sectorial levels, along with vulnerability assessment of different sectors to ML and the national ability to combating the same. This combined analysis of threats and vulnerabilities formed the basis for the risk rating.
2. Money Laundering Threats at
National Level
Rwanda’s overall ML threats level has increased to Medium (M), from the Medium-Low (ML) rating since the 2018 NRA. This shift is attributed to a change in the approach for selecting predicate offences. While the 2018 NRA focused on cases involving amounts of at least 20,000 USD, the current NRA lowered the threshold to Frw 5 million (3,500 USD), thereby broadening the scope of the analysis. In addition, improvements in crime detection methods have led to a higher number of registered cases, further contributing to the increased ML threat level. Money Laundering Threats at National Level was assessed considering the domestic threats and External threats.
2.2.1 Domestic threats assessment
Money laundering is a sophisticated crime that continually adapts to advancements in technology, finance, and global dynamics. A domestic threat assessment plays a crucial role in identifying and analysing emerging trends and vulnerabilities specific to the country. The domestic threats assessment focused on investigated predicate offences, prosecuted and convictions from July 2019 to June 2024. Predicate offences were selected based on a threshold of Frw 5 million and above3. These include embezzlement, fraud, tax crime/tax evasion, cyber-crime, drug trafficking, corruption, environmental crimes, terrorism, human trafficking and terrorist financing and the illegal operations of currency sale or exchange.
2.2.1.1 High Proceeds Generating Predicate
Offenses
The assessment indicates that the top four high proceeds generating predicate offenses are Embezzlement (39%), Fraud (24%), tax crime (20%) and cybercrime (13%), as illustrated in the figure below. 3In the 2024 NRA assessing the domestic threat, eleven (11) predicate offences with a threshold of Frw 5 million were considered. This approach differs from the 2018 NRA that used a sample of fifty (50) cases selected on a threshold of USD 20,000. The 2024 assessment expanded its scope to include human trafficking, terrorism, terrorist financing, and environmental crimes, which are primarily driven by non-financial motives. Consequently, a larger number of cases were investigated, influencing the overall findings.

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Figure 2: Percentage share of predicate offences with large amount of money
Source: RWA-IECMS
2.2.1.2. The most prevalent predicate offences
The assessment covered 11 predicate offences, highlighting the following four as the most prevalent offences: fraud, embezzlement, human trafficking and illegal operations of currency sale or exchange as the top four most prevalent predicate offenses investigated as indicated in the following figure
Figure 3: The most prevalent predicate offences investigated from July 2019 to June 2024
Source: RWA-IECMS

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2.2.1.3. The predicate offenses per level of
risk
The ranking of predicate offences per risk was based on the amount of proceeds and prevalence. Basing on the amount of proceeds, embezzlement tops the list, followed by fraud in the 2nd position, then tax crime and cybercrime in 3rd and 4th position respectively which pose a high risk. Considering the prevalence in convictions, embezzlement, fraud, drugs and cyber-crimes were assessed as high risk. The other predicate offences assessed include corruption, human trafficking, environment and natural resources crimes, and terrorist financing due to their nature and impact on national economy, security and citizens’ lives.

Embezzlement
Embezzlement4 is the major high-risk predicate offence in the country, affecting both public and private sectors. The majority of cases are committed by individuals. In the past five years, 734 embezzlement cases were investigated, representing 35% of the 2,122 total predicate offenses and involving 39% of total amount of proceeds of crime. As a result, embezzlement has been rated as medium-high.
Fraud
Fraud accounted for 24% of the total proceeds of crime, making it the secondlargest predicate offense by proceeds. During the assessment period, 837 fraud-related cases were registered, and the associated money laundering risk is considered high due to the frequency of cases and the substantial financial impact. This is partly due to of emerging technologies such as mobile money, the rise in pyramids schemes, misuse of virtual assets and other scams facilitating fraudulent activities. Fraud has been rated as medium-high.
Tax crimes
Tax-related crimes, such as tax evasion, illegal exemptions, fraudulent VAT claims, and non-payment of withholding tax, accounted for 20% of the total proceeds of crime, with 116 cases recorded during the assessment period. This represents an increase from the 80 cases involving Frw
18.77 billion reported in the 2018 NRA. The
tax detection and preventives measures were enhanced. As a result, tax crimes have been rated as Medium.
Drug trafficking
The assessment highlighted that 104 cases of drug trafficking were investigated, resulting in 76 convictions, accounting for 2% of the total proceeds of crime. The large amount of proceeds from drug is related to the two cases of cocaine and heroin with estimated value of 250,000 USD seized transiting to foreign countries. As a result, drug trafficking has been rated as Medium due to amount involved and the international nexus.
Cybercrimes
In the 2024 NRA, 90 cyber-crime cases involving 13% of total proceeds of crime in the last five years were detected and investigated. Out of these, 66 cases were prosecuted, resulting in 39 cases involving 62 suspects being convicted. As digital transactions and online banking become 4Article 10 of the Law No 54/2018 of 13/08/2018 Law on fighting against corruption defines embezzlement as an offence committed by any person, whether public servant or any employee of private institution, a company or a cooperative, or of non-government organization who embezzles for personal or someone else’s interests property, funds or securities entrusted to him or her by virtue of his or her office, or any person who uses for personal gains, the staff under his or her authority.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 20 more prevalent driven by increased internet access5 , criminals exploit these technologies to facilitate illicit activities. Cyber-criminals use hacking, phishing, and malware to gain unauthorized access to financial systems, allowing them to manipulate or steal funds. Cyber related crimes 6, were rated Medium.

Corruption
During the assessment period, 23 cases were investigated, leading to 15 prosecutions and 6 convictions. Corruption accounted for 2% of total proceeds of crime. As a result of combined efforts to combat corruption that involved a multi-faceted approach including strong legislative measures, institutional reforms, transparency initiatives, public engagement, and international cooperation, corruption prevalence has decreased. Thus, corruption was rated Medium Low.
Illegal operations of currency sale or
exchange
The assessment revealed that 160 cases of illegal currency sales operations were investigated which constitutes 1% of the total proceeds of crime. 86 cases were prosecuted and 30 convictions involving 37 suspects were secured. Illegal currency sales or exchange operations were rated Medium-Low risk.
Human Trafficking
The risk of money laundering related to human trafficking is rated Low. Over the assessment period, 162 cases were investigated, with 105 cases prosecuted, resulting in 28 convictions, while others remain pending in court. While human trafficking ranks Low in terms of proceeds generated from predicate offenses, this crime should be treated with special consideration due to its impact on human lives.
Terrorist Financing
During the assessment period, 19 cases were investigated and resulted into 2 convictions. The threat of money laundering related to terrorist financing is rated as Low. It is important to note that terrorist financing often involves modest amounts, some of which may not originate from illicit sources.
2.2.1.4 Money laundering cases
Over the last five fiscal years (July 2019 to June 2024), 44 money laundering (ML) cases were investigated, 42 were prosecuted with 9 convictions with confiscations totaling Fwr 780, 934,906 5There were 4.91 million internet users in Rwanda at the start of 2024, when internet penetration stood at 34.4 percent. 6Cyber related crimes include cyber-enabled fraud targeting financial institutions, such as online banking fraud, carding (using stolen credit card information), payment fraud, impersonation, blackmailing, unauthorized access to computer systems, networks, or data and social engineering Law nº 60/2018 of 22/8/2018 on prevention and punishment of cyber crimes

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2.2.2 International/External Threat
The external threat assessment analyzed cross-border risks, considering financial inflows from foreign capital, exports, and outflows related to imports. The assessment covered (a) predicate offenses committed within Rwanda, with the proceeds laundered in foreign jurisdictions, and (b) predicate offenses committed abroad, with the proceeds laundered through or within Rwanda.

Foreign capital inflows (foreign private capital)
Foreign Private Capital (FPC) is composed of Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), Financial Derivatives and Employee Stock Options, and Other Investments (OI)7 . This excludes capital inflows for exportation, and capital outflows for importation. The following chart illustrates the foreign private capital inflows in Rwanda from 2018 to 2022.8
Figure 4: Foreign private capital inflows in Rwanda from 2018 to 2022 (Million USD)
7
IMF, Official Financial Flows, Capital Mobility, and Global Imbalances, IMF Working paper, October 2014, p. 12. 8The published data used in the assessment from FPC 2023 Survey span from 2018 to 2022 though NRA assessment period uses data between July 2019 to June 2024. The new survey report is under process. Source: FPC 2023 Survey

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 22 As illustrated in the figure above, Mauritius tops the list of foreign capital inflows from 2018 to 2022 with the total inflows of 891 million USD. This is channeled in the ICT, manufacturing, and electricity sectors. Kenya is in the second position with about 296 million USD channeled through finance and wholesale sectors followed by United States of America 137 million USD. Rwanda’s foreign capital inflows are driven by a favorable investment climate, supported by substantial investments in business reforms. These reforms have streamlined procedures, making it easier to start and operate businesses. Key favorable factors include simplified regulations, reduced bureaucracy, and the digitization of public services, all contributing to a positive trend in the country’s ease of doing business (EB, 2024).

Rwanda’s trading partners (Exports & Imports)
Democratic Republic of Congo (DRC) tops the list of Rwanda’s exporting partners with exports valued at USD 1,093 billion. DRC is also the largest market for livestock and food products from Rwanda. United Arab Emirate is Rwanda’s second leading export partner, receiving exports including various minerals such as cassiterite, wolfram, and coltan, as well as tea and coffee9 . See the NISR figure below:
Figure 5: Top 20 export flow partners, value in USD Million
9https://www.statistics.gov.rw/publication/2127 Source: NISR,2024

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Figure 6: Top 20 import flow partners, value in USD Million
Source: NISR,2024

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 24 Rwanda’s primary source of imports is China, which supplies construction materials, machinery, textiles, and automotive products, making China its leading import partner. Tanzania ranks second, exporting mainly foodstuffs such as rice, groundnuts, and maize. Moreover, Rwanda imports various products from India, such as rice, petroleum, sugar, pharmaceuticals, and construction materials. There have been no reported cases of money laundering or terrorist financing linked to foreign capital or trade flows, indicating a low threat level from these trading partners.

Foreign predicate offences
During the period of assessment, six foreign predicate offenses were investigated from a total of 2,282. 10The individuals involved in these crimes are nine including five Zambians, one Cameroonian, one Nigerian, and two Rwandans. These foreign offenses represent 0.28% of the total predicate offense, with confiscated funds amounting to Frw 40,451,706 (USD) representing 1.23% of the total amount confiscated during the assessment period. There have been no reported cases of money laundering or terrorist financing linked to foreign capital or trade flows. The assessment of external threats was considered Low
2.2.3 Methods of laundering funds
The assessment has identified that criminals mostly launder the illicitly gotten funds through real estate, gaming and casino, structuring bank transactions to avoid detection, making international fund transfers, using mobile money and agent banking networks, acquiring other assets and using proxies to hide the origin of those funds and the beneficial owner. This was highlighted by the public survey results as indicated in the annex 2. The following cases illustrates methods used for money laundering. 10For all 6 predicate offences were committed outside of Rwanda involving foreigners. 5 cases are still pending with one convictions

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Money Laundering case studies
Case study: Self Laundering The case involved an employee of X Company, a platform facilitating online government service requests handling tourism services, specifically the issuance of permits for gorilla visits. He was charged with unauthorized access to the computer data and embezzlement of USD 478,086 in cash, which he received from tourists but failed to deposit it into the company’s account. The suspect had created fake accounts to access the system, and issue permits and got paid without the knowledge of his employer. The accused bought different properties (immovable and movable) and some of them were registered under his name. The court sentenced culprit to ten years in prison and fined USD 2,390,430. In addition, court ordered him to refund the embezzled amount of USD 478,086 to X Company as established by the audit. Furthermore, the court mandated the confiscation and sale of four houses, along with other seized properties, as they were deemed proceeds from the crime. Case study: Stand-alone/ Third Party ML ML case was filed against a foreign national, who hacked bank accounts and credit cards of victims in the U.S. and Germany, sending stolen funds amounting USD 3,970 to Rwanda via XOOM, a money transfer company. The criminal recruited 14 people to withdraw the money using their own names and identity cards; each was rewarded with RWF 20,000 (USD 17) for their involvement. The criminal was convicted and sentenced to 4 years of imprisonment and fined of RWF 5,000,000 equivalent to USD 4,176.

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3. Money Laundering Vulnerability at
National Level
2.3.1. Overall Money Laundering
Vulnerability
Rwanda has enacted various laws that align with international standards to enhance its legal framework to combat ML and related predicate offences. The government has actively worked to raise awareness among key stakeholders, including reporting person, regulatory bodies and law enforcement agencies on AML/CFT matters. However, there are some weaknesses identified in the performance of relevant authorities responsible for AML. The national ML vulnerability is rated Medium (0.41), stemming from the overall sectoral ML vulnerability rated Medium (0.42) and the national ML combating ability also rated Medium (0.60). This vulnerability rating is largely a result of deficiencies identified in the DNFBPs sector and Forex Bureau within the financial sector. Additionally, weaknesses in the quality of investigations, prosecutions, adjudications, and asset forfeitures further contributed to the heightened ML vulnerability.
2.3.2 The National Combating ability
The national ability to combat money laundering is rated Medium (0.60). The rating is based on 22 AML control variables, yielding seven (7) intermediate variables including AML policy and Strategy, effectiveness of ML crime definition, cross-border controls, investigations, prosecutions, adjudications, and asset forfeiture framework.

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Figure 7: Assessed national ML combating ability factors
A. INPUT VARIABLES/NATIONAL ML COMBATING ABILITY FACTORS Quality of AML Policy and Strategy 0.7 Effectiveness of ML Crime Definition 0.6 Comprehensiveness of Asset Forfeiture Laws 0.6 Quality of FIU Intelligence Gathering and Processing 0.6 Capacity and Resources for Financial Crime Investigations (incl. AF) 0.7 Integrity and Independence of Financial Crime Investigators (incl. AF) 0.7 Capacity and Resources for Financial Crime Prosecutions (incl. AF) 0.7 Integrity and Independence of Financial Crime Prosecutors (incl. AF) 0.7 Capacity and Resources for Judicial Processes (incl. AF) 0.6 Integrity and Independence of Judges (incl. AF) 0.8 Quality of Border Controls 0.9 Comprehensiveness of Customs Regime on Cash and Similar Instruments 1 Effectiveness of Customs Controls on Cash and Similar Instruments 0.8 Effectiveness of Domestic Cooperation 0.9 Effectiveness of International Cooperation 0.6 Formalization Level of Economy 0.4 Level of Financial Integrity 0.8 Effectiveness of Tax Enforcement 0.8 Availability of Independent Audit 0.8 Availability of Reliable Identification Infrastructure 0.7 Availability of Independent Information Sources 0.7 Availability and Access to Beneficial Ownership Information 0.5 ASSESSMENT RATING

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 28
Figure 8: Vulnerability Map
0.50
0.50
0.80
0.70
0.70
0.90
0.62
0.60
0.80
0.60
VULNERABILITY MAP
0.42
0.70
0.60
0.41
0.70
0.60
0.80
0.60 0.70 0.40
0.80
0.90
1.00
0.80
0.60
0.70
0.70
National ML Vulnerability National ML Combating Ability Quality of Cross-border Controls on Cash and Similar Instruments Quality of AML Policy and Strategy Quality of Adjudication Effectiveness of International Cooperation Quality of Criminal Prosecution Capacity and Resources for Financial Crime Investigations Effectiveness of ML Crime Definition Quality of Criminal Investigation Quality of Border Controls Quality of FIU Intelligence Gathering and Processing Quality of Customs Controls on Cash and Similar Instruments Capacity and Resources for Financial Crime Prosecutions Integrity and Independence of Financial Crime Investigators Integrity and Independence of Financial Crime Prosecutors Overall Sectoral ML Vulnerability Quality of Asset Forfeiture Framework Comprehensiveness of Customs Regime on Cash and Similar Instruments Effectiveness of Customs Controls on Cash and Similar Instruments Effectiveness of Domestic Cooperation Accessibility to Reliable Info and Evidence Capacity and Resources for Judicial Processes Integrity and Independence of Judges Comprehensiveness of Asset Forfeiture Laws Formalization Level of Economy Reliability of Financial Records/ Books Quality of CDD Framework Level of Financial Integrity Effectiveness of Tax Enforcement Availability of Independent Audit Availability of Reliable Identification Infrastructure Availability of Independent Information Sources Availability and Access to Beneficial Ownership info The input variables ( Figure 8) led to the ratings of seven intermediate variables, as shown in the vulnerability map above, which visually represents the strengths and weaknesses in key areas of the national AML framework.
2.3.2.1. Quality of AML Policy and Strategy
Rwanda has strengthened its national capacity to combat money laundering through a robust AML policy, strategy, and legal framework, supported by strong political commitment. This is demonstrated through the elaboration of key policies and strategies and the establishment of (CC responsible for the formulation, coordination, and implementation of AML policies and strategies and FIC that plays a key role in overseeing AML/CFT activities and policy development and implementation. Moreover, relevant authorities; supervisory authorities and Law Enforcement Authorities (LEAs) has incorporated in their strategies AML specific strategic actions.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 29 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT Rwanda has also enacted several key legal instruments to support AML/CFT efforts, including;

Law N° 028/2023 of 19/05/2023 on prevention and punishment of money laundering,
terrorist financing and the financing of proliferation of weapons of mass destruction
Law N° 045/2021 of 18/08/2021 governing the Financial Intelligence Centre
Regulation n° 002/fic/2023 of 26/06/2023 relating to anti money laundering, combating
the terrorist financing and financing of proliferation of weapons of mass destruction
Law Nº 037/2021 of 28/07/2021 governing recovery of offence related assets;
Law Nº 005/2021 of 05/02/2021 governing mutual legal assistance in criminal matters.
Rwanda developed a comprehensive AML policy (National AML/CFT Policy 2023), informed by the findings of the 2018 NRA and the 2014 MER. However, given the time frame, the policy now requires updating to incorporate mitigation measures proportionate to the current ML risks the country faces.

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2.3.2.2. Money Laundering crime definition
Money Laundering crime definition is rated Medium High. Money laundering offenses are comprehensively defined in Art 2(q) of AML/CFT Law N° 028/2023 of 19/05/2023. Rwanda has adopted all offences approach to criminalize ML and predicate offences. The penalties apply to both natural and legal persons. The penalties provided for in Art 54 (1) & (2) of AML/CFT Law N° 028/2023 of 19/05/2023 are proportionate and dissuasive. However, the assessment identified that some penalties imposed are to some extent not proportionate neither dissuasive and are not in conformity with penalties provided by the law. (See the Case box : On proportionality and Dissuasive A ML case was filed against a foreign national, Mr. K, who hacked bank accounts and credit cards of victims in the U.S. and Germany, sending stolen funds to Rwanda. The criminal recruited 14 people to withdraw USD 3,970 from A bank through Z money transfer company. Mr. K was convicted and sentenced to 4 years of imprisonment and fined USD 4,176. The sanction imposed is not in conformity with penalties provided for ML case neither dissuasive.
2.3.2.3 Quality of customs controls on
cash and similar instruments Rwanda has strengthened customs controls on cash and similar instruments, significantly to improve border security. This is supported by regulations on the declaration of cross-border cash and bearer negotiable instruments (BNIs), with collective efforts from the tax authority, immigration, national police, and community policing. An MOU was signed by key agencies including FIC, RNP, RIB, RRA, and DGIE, indicating the responsibility of each to ensure the enhanced control of cross border cash movement. Over the last five years, 1,902 cross-border cash declaration reports were received. Thus, the quality of customs controls on cash and similar instruments was rated high.
2.3.2.4. Quality of criminal investigations,
prosecution and adjudication The quality of criminal investigations, prosecution and adjudication is Medium High. This is evidenced by well-coordinated Rwanda’s criminal justice system with distinct roles of RIB, NPPA, and Judiciary. However, challenges include insufficient training in handling money laundering cases, gaps in operating standards procedures (SOPs) for ML investigation and prosecution, limited investigative tools, particularly for cryptocurrencyrelated crimes and insufficient skills to conduct parallel financial investigations of offenses linked to criminal proceeds.
2.3.2.5. Quality of Asset Forfeiture
Framework
Rwanda comprehensiveness of Asset Forfeiture Framework is Medium High. The country has Law No 037/2021 of 28/07/2021 governing recovery of offencerelated assets. However, the assessment identified the following gaps in relation to asset recovery: Competent authorities do not efficiently pursue provisional measures and the confiscation of proceeds and property, lack clear guidance on managing seized assets, and the insufficient human resource responsible for asset seizure. While pursuing confiscation for domestic offenses, property of corresponding value has not been seized, and there is no focus on recovering proceeds moved abroad.

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2.3.2.6. Domestic and International
Cooperation

Domestic Cooperation
Rwanda domestic cooperation is rated Close to excellent. This is due to the fact that all the relevant AML agencies cooperate effectively and coordinate domestically with each other to combat money laundering crime. Competent authorities, supervisory authorities and other relevant authorities signed MoUs on collaboration and exchange of information. There are also AML forums such as the forum of AML/CFT compliance officers, forum of AML/CFT supervisory authorities as well as fraud forums in the financial sector.
International Cooperation
Rwanda has a medium-high rating in international cooperation on AML/CFT. The country has set up the collaboration framework including signing agreements or MoUs with international counterparts. However, the Mutual Legal Assistance (MLA) framework is not effective due to some weaknesses and there is no case management system for handling and following up requests and feedback; the MLA framework lacks timeframes. Moreover, the implementation of signed MoUs faces some challenges especially the provision of timely responses to the requests and lack of follow up mechanisms on requests.
2.3.2.7. Formalization of Economy
The formalisation of Rwanda’s economy is rated Medium Low, with informal activities contributing 52% to GDP. The informal sector, including unregistered businesses and those without regular financial records, accounted for 91.9% of businesses in 202211. Dominated by trade (60%) and food services (21%), this sector is at risk of facilitating money laundering through cash-based operations, poor to no records, and practices like over- or under-invoicing, complicating detection and enabling tax evasion.
2.3.2.8. Quality of FIC in intelligence
gathering and processing Quality of financial intelligence gathering and processing is Medium High. Rwanda’s FIC is operational, receives, analyses STRs/SARs and other threshold reports, and disseminates intelligence to law enforcement authorities and other competent authorities. FIC has acquired goAML system and has started using it for receiving and analysing reports. However, institution still face challenges related to human resources. Moreover, FIC has not yet been admitted to the Egmont Group which is a barrier to the exchange of information with other FIUs.
2.3.2.9. Availability and access to
Beneficial Ownership information Availability and access to Beneficial Ownership (BO) information is rated Medium. The registry of beneficial ownership information on legal structures is available and shall be accessed by competent authorities as per relevant laws. However, the BO registry is not yet available to all BO information. 11Rwanda Integrated Business Survey report, 2022, NISR

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2.3.3. Recommended actions for handling
the National ML vulnerability To address the identified key deficiencies in the ML national combatting ability, the following are key recommended actions:
i. Quality of AML Policy and strategy
Rwanda strives to enhance the quality of its AML Policy and strategy. In this regards Rwanda must:

Update its AML policy and strategy,
based on the updated NRA findings;
Amend the AML related laws,
regulations and orders to address the identified technical compliance deficiencies in the mutual evaluation report (MER); and comply with the FATF 40 Recommendations;
Ensure that all the Reporting persons
must regularly update their ML risks assessment and update their AML Policy and strategies.
ii. ML Crime definition
Rwanda should ensure that the relevant authorities appreciate the definition of money laundering crime broadly and its impact, to that end, it should:
Develop sentencing guidelines to
assist or guide to determine and apply appropriate penalties.
Train investigators, prosecutors
and judges on the complexity of ML crime and its implications and how to successfully investigate it and apply proportionate and dissuasive penalties.
iii. Quality of customs controls on cash
and similar instruments
Enhance public awareness on
obligations to declare transported cash and BNIs, and the consequences of non-compliance.
Provide adequate detection tools to
identify non-declarations.
Establish a centralized cash and BNIs
declaration system, managed by DGIE, accessible to relevant institutions.
iv. Quality of criminal investigation,
prosecution and adjudication
Enhance training to investigators,
prosecutors, and judges on handling ML cases.
Acquire specialized and advanced
technologies for investigations, including software to trace virtual assets and other emerging crimes.
Investigators and prosecutors should
conduct parallel investigations on predicate offenses involving proceeds of crime and ensure proper categorization of ML cases by type.
v. Effectiveness of domestic and
international cooperation
Enhance effective collaboration with
foreign counterparts
Each competent authority should
establish the Standard Operating procedure on management of request of information and feedback
Competent authority should establish
an efficient case management system for MLA and extradition, including tracking requests and actions taken.
Competent authorities should
proactively seek MLA and extradition based on the jurisdiction’s ML risk profile, including for asset recovery
vi. Quality of FIU Intelligence Gathering
and Processing
FIC should be capacitated by filling
the vacant positions and modify the structure to increase the number of staff
FIC staff should be trained sufficiently
on AML with the possibility of enrolling them in AML certified courses (e.g:
ACAMS, and other related professional courses)

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FIC should address all deficiencies
identified to speed up the application of Egmont Group Membership
FIC should engage with relevant
authorities on the need to have direct access to source intelligence information.
vii. Comprehensiveness of Asset
Forfeiture
NPPA should develop and implement
SOPs on provisional measures and confiscation to ensure consistency in seeking confiscation and to ensure effective recovery
RIB should expand SOPs to include
guidance on identifying and locating proceeds moved to other jurisdictions.
Develop asset management system
to preserve asset value and enable facilitate confiscation by inventorying seized, frozen, and confiscated assets, and conducting timely auctions
Strengthen the Seized and Confiscated
Assets unit by providing adequate human resources, equipment and appropriate infrastructure
and dissuasive sanction for falsely or
non-declared cross-border currency and BNIs
viii. Availability and Access to Beneficial
Ownership Information
Explore the feasibility of providing
direct access to basic BO information to the reporting persons and others with a legitimate interest.
To enhance capacity building
activities on BO requirements and implementation to relevant authorities
ix. Formalization of Economy
Rwanda should strive to formalize
its economy by adopting strong measures, such as implementing strong digital payment systems to enhance transparency and reduce reliance on cash transactions.
Educate informal businesses about
the risks of money laundering for them to adopt safer practices;
Encourage partnerships between
informal sectors and regulatory bodies to improve oversight and compliance.

Money Laundering Risk at Sector
Level
2.4.1. Introduction
Money Laundering sectorial risk assessment focused on 18 sectors from both the financial and DNFBPs categories. The purpose of assessment was to determine the sector’s exposure to ML risk. The assessment revealed that real estate sector is the most exposed sector to ML risk rated Medium High, followed by banking (BA), e-money issuers and foreign exchange sectors that are rated Medium. Insurance, Pension, Securities, Money Remittance and Precious metal and stones all rated Medium Low. The remaining sectors such as non-deposit taking Financial Service Providers (NDFSPs), Deposit taking microfinance companies (Plc.), Deposit Taking Microfinance cooperatives (SACCOs), TCSPs (Trust and company service providers) Bailiffs, Lawyers, Tax Advisors, Notaries, Accounts and Auditors are rated Low

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 34
Figure 9: Master map for ML Sectorial risk

Overall sectorial threat
The overall sectorial ML threat assessed 18 sectors from financial institutions and DNFBPs categories. Real estate sector possesses a Medium High threat rate, followed by Banking, Forex Bureau and e- money sectors which have a Medium threat rate. The threat in the rest of the sectors remain Low.
Overall sectorial vulnerability
The overall sectorial vulnerability is rated Medium. The financial sector is generally the least vulnerable, except for the Forex Bureau sub-sector, which has a MediumHigh vulnerability rating. In contrast, the DNFBPs sector is the most vulnerable, with the Bailiffs sub-sector rated as the most vulnerable with the rating of MediumHigh, the figure below provides a detailed vulnerability rating for each sector:

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Table 1: Sectoral ML risk ratings
Sector Threat
Rating Vulnerability Weight Risk Level Real Estate 4 0.58 4 MH Banking 3 0.41 8 M Forex Bureau 3 0.61 1 M E- Money issuers 3 0.45 5 M Insurance 1 0.27 3 ML Pensions 1 0.20 3 ML Securities 1 0.21 4 ML Money Remittances 1 0.43 3 ML Precious Metal & Stones 1 0.55 5 ML NDFSPs (Non deposit taking financial service providers) 1 0.23 2 L Microfinance Deposit Taking cooperatives (SACCOs) 1 0.36 1 L Microfinance Deposit Taking companies (PLCs) 1 0.23 2 L TCSP (Trust and company service providers) 1 0.41 1 L Bailiffs 1 0.73 1 L Lawyers 1 0.5 1 L Tax Advisors 1 0.41 1 L Notaries 1 0.58 1 L Casinos 1 0.59 1 L Accountants and Auditors 1 0.4 1 L The table above indicates that the real estate sector faces the highest ML risk with a Medium-High rating, followed by banking, Forex bureau and e-money at Medium risk. The Sectors such as dealers in precious metals and stones, money remittances, securities, and insurance and pensions are rated Medium-Low while other sectors are rated Low.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 36
Figure 10: Vulnerability rate of each sector
2.4.2. Money Laundering risk in financial
sector
2.4.2.1. Overview of the financial sector in
Rwanda
The financial sector experienced sustained growth in both size and number of institutions. The total number of regulated financial institutions increased from 603 in June 2019 to 687 by June 2024. During this period, the sector’s total assets more than doubled, rising from FRW 4,945 billion in June 2019 to FRW 11,664 billion by June 2024. This expansion brought the sector’s asset-to-GDP ratio (depth) to 66.7%. However, despite this significant growth, the financial sector’s direct contribution to GDP remained stable at 2%. The Financial sector is composed of different sub-sectors including banking and non-banking institutions. The assessment covered the following sectors: banking, securities, insurance, pensions, deposit-taking microfinance companies, e-money issuers, money remittance services, forex bureaus, and other financial institutions (including deposit-taking microfinance cooperatives, insurance intermediaries, non-deposittaking service providers—such as lendingonly entities, factoring and finance lease). The National Bank of Rwanda (BNR) regulates and supervises these subsectors, except for securities, which fall under the supervision and regulation of the Capital Market Authority (CMA). The
table below summarizes the ML risk rating
for each sub-sector:
Figure 11: Assessed ML risks
SECTOR THREAT VULNERABILITY WEIGHT RISK LEVEL Banking 3 0.41 8 Medium Insurance 1 0.27 3 Medium Low Pensions 1 0.21 1 Low Securities 1 0.21 4 Medium Low E- Money issuers 3 0.45 5 Medium Money Remittances 1 0.43 3 Medium Low Foreign exchange Bureau 3 0.61 1 Medium NDFSPs 1 0.23 2 Low Microfinance Cooperatives (SACCOs 1 0.36 1 Low Microfinance Deposit Taking companies PLCs 1 0.23 2 Low

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2.4.2.2. Banking sector assessment

Overview
As of June 2024, the banking sector is the largest within the financial sector, holding assets equivalent to FRW 7,861 billion, which represents 67.5 % of the total financial sector assets. The sector comprises 11 banks, including 9 commercial banks, 1 development bank, and 1 cooperative bank. These banks are distributed across the country, with a network of 316 branches, 10 sub-branches, 162 outlets, and 9,335 banking agents12.
Threat assessment of banking sector
The banking sector is the largest sector in terms of balance sheet size, the nature and complexity of transactions (including international wire transfers), thus being significantly exposed to ML threats. In this assessment, the threat level in the banking sector was rated Medium, down from the previous High rating in the 2018 NRA. From 2019 up to 2024, a total number of 575 STRs was received from banks. From these STRs, 11 ML cases were identified and investigated prompting prosecution of 10 cases which led to 2 convictions. 12BNR, MPFSS March 2024 Case study in Banking sector On 14 August 2023, a Rwandan bank reported STR involving $3.4 million the suspect was XXX Ltd, a fake cryptocurrency bank led by a foreign citizen. The scheme used 48 shell companies for money laundering, the case involves different countries including Zambia, Italy, and Canada the suspects were charged of fraud, money laundering, and criminal association with $2.4 million frozen, highlighting the global nature of financial crime and the need for joint efforts. Case study in Banking sector Between 2019 and 2021, Mr. NK, a Rwandan bank manager, embezzled 289 million Rwandan Francs by reactivating dormant accounts and falsifying documents. He instructed bank tellers to transfer the funds into an internal account, “Front Office Western Union,” falsely claiming compliance with National Bank regulations. Mr. NK was convicted of forgery, embezzlement, and money laundering, sentenced to 7 years in prison and fined 867,889,398 Rwandan Francs. His accomplice, convicted of illicit enrichment, was also sentenced to 7 years in prison. This case underscores the severe abuse of trust within the banking system.

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Vulnerability assessment in Banking
sector
The assessment of this sector’s vulnerability was based on two factors, which are AML variables controls and inherent vulnerability. Banking sector vulnerability to ML is rated Medium.
AML variable controls in banking
sector
Rwanda’s AML law aligns with FATF and Basel standards, featuring provisions on Customer Due Diligence (CDD), riskbased approaches, Beneficial Ownership (BO) identification and verification, and enhanced monitoring of high-risk individuals and jurisdictions. AML Law requires supervisory authorities to conduct risk based supervision and ensure reporting persons compliance with AML/CFT requirements. That Law empowers supervisory authorities to impose sanctions for non-compliance with those requirements. However, low application of a isk-based Approach (RBA) to supervision and sanction enforcement remain challenge. Despite a strong legal framework, Rwanda’s second mutual evaluation highlighted key gaps, including the need for regulatory guidance on ML risk assessment and standardized qualifications for AML/CFT compliance officers. The banking sector, dominated by foreign subsidiaries, follows parent bank AML policies and is influenced by foreign correspondent banks to adopt robust AML practices. The NBR has developed a risk-based supervision manual, and employs various supervisory measures, including guidelines, inspections, and external audits, to manage and reduce ML risks. Local banks have effective compliance functions with regular training to enhance staff knowledge on AML requirements, their implementation, STRs detection and reporting. Banks use national identification systems, commercial screening tools, and independent data sources for CDD, but they face a challenge of not having access to beneficial owner registries and passport verification.
Figure 12: AML variable controls in banking sector

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Inherent vulnerability
An assessment was made on the vulnerabilities in banking sector focused on 19 banking products/services based on the transaction volume, client profile, cash activity, and exposure to laundering risks. The selection of these products was based on their potential exposure to money laundering risks. International wire transfers were rated as the most vulnerable, with a MediumHigh risk level due to large transaction volumes, cross-border transfers, and ease of converting funds into cash. Other products, including corporate deposits, money remittance, trade finance services, and card services were also identified as posing Medium vulnerabilities. The inherent vulnerability of banking sector to ML is Medium. This vulnerability is primarily due to the large volume of transactions, significant cross-border transfers and the ease with which these transfers can be converted into cash. All these factors increase the risk of misuse and fraud, creating opportunities for laundering illicit funds.
Figure 13: Product risk rating
0.42
0.41
0.51
0.43
0.63
0.26
0.55
0.41
0.52
0.23
0.35
0.19
0.44
0.58
0.39
0.43
0.41
0.39
0.47
0.00
0.33
0.32
0.33
0.28
0.40
0.23
0.40
0.32
0.34
0.23
0.23
0.14
0.29
0.37
0.31
0.33
0.32
0.31
0.38
0.00
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00
INTERNET BANKING
E-COMMERCE
CARD SERVICES (credit/ debit cards) AGENCY BANKING International wire transfers PUSH AND PULL Money Remittance partnerships TREASURY BANKING TRADE FINANCE DIGITAL LOANS CORPORATE LOANS SM E Loans RETAIL DEPOSIT CORPORATE DEPOSIT SM E deposit Term deposits NGO Account Non-Citizens accounts Custody services 0 PRODUCT/SERVICE VULNERABILITY (LAST CASE) L ML M MH H The risk of money laundering in the banking sector is rated Medium. This is derived from the combination of ML threats (Medium) and ML vulnerability (Medium)
Recommendations
The following key recommendations are made for the banking sector improvement:
Enhance the implementation of riskbased supervision in the banking sector; Conduct and ensure the improved quality of institutional risk assessment;

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 40 Enhance financial inclusion products;

Facilitate banks to access BO registry,
NPOs registry and domestic issued passport data base for verification of customer identification information;
Ensure close monitoring of product/
services that are rated most vulnerable to ML to ensure that they are not abused for ML;
Provide advanced skills to Compliance
Officers in AML;
Enforce administrative sanctions
which are proportionate, dissuasive and deterrent for non-compliance with AML/CFT obligations; and
Foster the cashless culture in financial
transactions.
2.4.2.3. The insurance sector assessment
The insurance sector is regulated and supervised by the National Bank of Rwanda. Itis categorized into two main types: general insurers (17) and life insurers (3). In addition, there are three other special categories: micro insurance, captive insurance, and health maintenance organizations (HMOs). The insurance sector also includes insurance intermediaries such as: insurance brokers, insurance agents, loss adjusters and bancassurance entities. At the time of the assessment, the insurance assets represented a share of 9 percent of total assets of the financial sector13. The assessment examined Life insurance category, which offers investmentbased products and long terms policies featuring cancellation options and saving functionalities.
Threat assessment of insurance
sector
The government has established a comprehensive legal framework, including the AML/CFT law and other regulatory measures, which outlines obligations for financial institutions, including insurance companies. Potential indicators of insurance sector exposure to money laundering threat include premium overpayments, early fund withdrawals, and misuse of investment products. However, the assessment indicated no ML case involving this sector. Thus, the threat in insurance sector was rated Low.
Vulnerability assessment of
insurance sector
The assessment of the vulnerability in insurance sector was based on AML variables controls and inherent vulnerability as detailed in the subsections below. AML variable controls The insurance companies are designated as reporting persons and obliged to comply with AML standards. However, the assessment revealed some weaknesses such as inadequate training and staff on AML/CFT knowledge, and no application and enforcement of administrative / criminal sanctions for non- compliance. 13BNR,2024.

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Inherent vulnerability
The assessment focused on several factors including; number of insured individuals and their premiums, total asset value, average transaction size, client base profile, availability of investment-type policies, and the extent of cash-based activities. The assessment considered products that are more susceptible to ML, by taking into account the availability of investment type and long-term insurance policy. It was identified that education endowment and pure savings are highly vulnerable to money laundering. The following table outlines the products assessed and their corresponding vulnerability ratings.
Figure 14: Product risk rating
The overall money laundering vulnerability in the insurance sector was rated MediumLow, due to AML control measures and the sector’s inherent vulnerabilities. Consequently, the money laundering risk for this sector was rated Medium-Low, reflecting the combined assessment of both threat (Low) and vulnerability (Medium Low).
Recommendations
The following are key recommendations to mitigated ML risks in the insurance sector:
Conduct institutional risk assessment
and apply mitigation actions to the products vulnerable to ML
Provide AML-CFT training to staff
members
Enhanced monitoring of AML/CFT
compliance within the sector and apply sanctions for non-compliance by the regulator.
2.4.2.4. Securities sector assessment
Overview of the securities market
The securities sector in Rwanda is regulated by CMA which was established by Law Nº 057/2021 Bis of 18/09/2021 as modified to date. It is responsible for regulating and developing the capital markets industry, commodities exchange and related contracts, collective investment schemes as well as warehouse receipts system. The available products in the capital market of Rwanda are non-complex securities including equities, bonds and units in collective investment schemes. There are 10 listed companies comprised of 5 domestic companies and 5 crosslisted companies. Market players include 6 Securities Broker, 1 Sponsoring Brokers, 4 Investment Advisors, 10 Investment

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 42 Managers, 3 Investment Banks, 3 Credit Rating Agencies and 3 Custodians that are primarily licensed as banks by the National Bank of Rwanda. Additionally, there are 2 approved collective investment schemes (unit trusts). By end of June 2024, the market capitalization stood at $ 2.8 billion with 50,003 investors including 28,865 participants in the 2 approved collective investment schemes

Threat in the Securities sector
The assessment of threats referred to the scale and characteristics of the proceeds of crime involving the sector. There has not been much development since the last assessment of 2017/2018 in terms of size, low frequency of transactions, liquidity or complexity of the market. The listed companies increased from 8 in 2018 to 10 in 2024 with the cross-listing of RH Bophelo Plc from South Africa and the listing by introduction of Cimerwa PLC. The annual average number of transactions in the market is 553 (from 2018 to 2024) while the total turnover over GDP in 2023 was 0.35% from 0.26% in

Asset under management from the
2 approved unit trusts stood at Frw 64 billion as of June 2024. Moreover, there are no any STR filed with the FIC and the available statistics indicate that there is no case of ML committed in the securities sector. Therefore, the rating of threat in securities market remained Low.

Vulnerability assessment of
securities sector
AML control
Rwanda has established a robust legal framework for AML that applies to the securities sector. The Capital Market Authority (CMA) oversees the securities market and ensures compliance with AML obligations. It monitors transactions and enforces rules that require transparency and accountability. There is a strong emphasis on collaboration between financial sector regulators, as well as with LEAs, especially in sharing of information and experience on strategies for combating money laundering. The combined efforts aim to enhance the integrity of Rwanda’s securities market and ensure it remains resistant to financial crimes. The assessment of ML vulnerability in the securities sector was focused on three types of institutions: investment banks, securities brokers and investment managers as they are susceptible to abuse by ML risk. Custodians were included in the assessment of the banking sector, while sponsoring brokers, investment advisors and credit rating agencies were assessed separately, given that their services do not involve handling of clients’ funds. In evaluating the overall AML controls within the securities sector, the type of institution was taken into consideration, and the following input variables were assessed and subsequently rated as presented in the table below:

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Figure 15: AML variable controls in Securities sector
SECURITIES INSTITUTIONS A. GENERAL INPUT VARIABLES INVESTMENT BANKS INVESTMENT MANAGERS SECURITIES BROKERS Comprehensiveness of AML Legal Framework 0.7 Effectiveness of Supervision Procedures and Practices 0.5 Availability and Enforcement of Administrative Sanctions 0.5 Availability and Enforcement of Criminal Sanctions 0.5 Availability and Effectiveness of Entry Controls 0.8 Integrity of Staff in Securities Firms 0.5 AML Knowledge of Staff in Securities Firms 0.4 0.5 0.5 Effectiveness of Compliance Function (Organization) 0.5 0.5 0.4 Effectiveness of Suspicious Activity Monitoring and Reporting 0.5 Level of Market Pressure to Meet AML Standards 0.8 Availability and Access to Beneficial Ownership Information 0.3 Availability of Reliable Identification Infrastructure 0.5 0.7 0.4 Availability of Independent Information Sources 0.3 0.7 0.3 ASSESSMENT RATING The assessment revealed alow level of understanding and implementation of AML obligations in the securities firms. Most reporting entities in the sector are small firms that lack robust compliance programs, many of which have only recently developed their internal controls. Additionally, the sector has limited access to the BO information database as well as access to reliable identification infrastructure. Furthermore, the CMA has just started conducting AML/CFT inspections and has not yet enforced administrative sanctions to non-compliant securities firms. Besides, the MER for Rwanda indicated that the CMA’s risk-based framework was flawed while the scope of the onsite inspections was generally inadequate and not commensurate with the risk profile of the institutions. As a result of the MER, CMA revised its risk-based supervision framework in December 2024 to align it with international standards and to enhance the effectiveness and efficiency of its oversight. By providing a structured supervisory framework for identifying, assessing, and prioritizing AML/CFT risks within the securities sector, CMA not only ensures that supervisory efforts are directed toward the areas of highest risk but also allocates resources where they are most needed. From this assessment, the quality of AML controls was rated Medium for both Securities brokers and investment managers, while for the investment banks, it was rated Medium Low. Inherent vulnerability The assessment covered investment banks, securities brokers and investment managers. The specific focus is on the number of customers and managed funds, the total value of assets, average transaction size, client base profile and level of cash activities. It was noted that custodial services are moderately vulnerable to money laundering, largely due cross-border transactions involving jurisdictions with varying level of regulation and oversight (See figure 11 on banking above).

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 44 The vulnerability ratings for securities market players vary based on their exposure to money laundering risks:

Securities brokers, primarily involved
in trading domestic stocks and government bonds, were rated Medium Low due to the simplicity and low liquidity of the products traded, making them less susceptible to exploitation by money launderers.
Investment banks, engaged in
brokerage, fund management, and advisory services, with a focus on domestic stocks and government bonds, were rated Medium-Low due to their broader range of activities and slightly higher exposure.
Investment managers, a small sector
with only two open-ended unit trusts primarily offered to domestic investors and focused on domestic treasury bonds, also received a Low rating. The overall vulnerability, resulting from both the AML controls and inherent vulnerability is rated Medium-low. Consequently, considering the sector’s low exposure to money laundering threats and its medium-low vulnerabilities, the sector’s money laundering risk is rated Medium-Low.
Recommendations
The following key recommendations have been made:
The supervisory authority to ensure
application of risk-based approach and enforce administrative/criminal sanctions.
To enhance staff training and
awareness on AML/CFT standards.
The sector to enhance the application
of appropriate system for customer screening and reporting STRs to FIC.
2.4.2.5 E-Money issuers assessment
Overview
The e-money sector is composed of 7 players. The sector is mainly dominated by one mobile money service provider (MTN Mobile money ltd). As of December 2023, the sector had 447,223 active subscribers and 140,899 mobile money agents. The e-money issuers provide the following14: services enabling cash deposits and withdrawals, execution of payment transactions, issuing payment instruments, acquiring payment transactions, money remittance services, payment initiation services, issuance and management of e-money services.
E-Money Issuers threat assessment
E-money platforms often handle numerous transactions in a short time, making it easier for illicit/suspicious activities to go undetected. The ability to conduct small-value transactions can facilitate layering and integration stages of money laundering.
Table 2: STRs received by FIC
Reporting institutions 2018/2019 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024 E-money issuers 0 0 10 32 55 169 14Regulation No: 05/2018 Of 27/03/2018 Governing Payment Services Provider

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 45 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT From July 2019 to June 2024, STRs from e-money issuers increased significantly, indicating an increase in ML threat within the sector as indicated in the above table. During this period, 10 ML cases were investigated and prosecuted, resulting in one conviction. This case was initiated after getting information from the population, the e-money issuers weren’t the channel rather the ATM cards. It is important to highlight that this case involved money laundering, with no evidence of terrorism financing. The ML threat rating of e-money issuers sector was rated Medium.

Vulnerabilities assessment of
E-Money Issuers
The assessment of the sector vulnerability was based on AML variable controls and the inherent vulnerability. General AML Controls The assessment highlighted the following weaknesses: low level of understanding of AML/CFT obligations, ineffective monitoring and reporting of suspicious activities, and inadequate supervision of AML/CFT compliance. Additionally, the issue of not involving service provider agents in the institutional AML/CFT program and trainings was noted. Hence, the assessment concluded that the quality of AML controls in the sector is Medium. Inherent Vulnerability Four (4) products and services commonly offered by the sector were considered for this exercise due to level of cash activity and frequency of international transactions:
agent (cash in/out), tax collections, payment collection and money transfers remittance. These products represented almost all activities undertaken by the E-money issuers sector. The selection of the products was based on the likelihood of ML occurring through them. The assessment highlighted that mobile money agents (cash in/out) are the most vulnerable to ML with medium-high rating due to high level of cash activities, and possible anonymity use of the product. Money transfer was rated medium due to the presence of international remittances, while tax collections and payment collection were rated medium-low.
Figure 16: Product vulnerability

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 46 The overall ML vulnerability in the e-money issuers sector was rated Medium. Consequently, the ML risk for this sector was rated Medium, reflecting the combined assessment of both threat (Medium) and vulnerability (Medium).

Recommendations
The following are key recommended actions:
The regulator should apply risk-based
supervision activities in the sector to ensure compliance with AML requirements; and apply sanctions for non-compliance;
E-money issuers are required
to conduct the institutional risk assessment and include their agents in AML programs;
Improve monitoring and reporting of
suspicious activities/transactions; and
Provide AML related trainings to
service provider staff and agents.
2.4.2.6. Foreign Exchange Bureau risk
assessment
Overview
The sector consists of 78 licensed foreign exchange bureaus supervised by the National Bank of Rwanda. In terms of assets, transaction volume, and value, this sector is relatively small compared to other areas of the financial sector.
ML Threat assessment
Forex Bureaus primarily buy and sell foreign currencies, mostly through cash transactions. They fall under the definition of reporting persons and must therefore comply with AML/CFT obligations. Due to their cash-intensive, anonymous nature of money-changing, the sector is vulnerable to ML threat and is rated Medium. This vulnerability primarily stems from the potential handling of criminal proceeds and the increase in illegal exchange activities. Over the assessment period, 160 cases of illegal foreign currency exchange were investigated as illustrated in the following table.
Figure 17: Illegal exchange cases
Investigated cases Prosecuted cases Conviction cases Conviction suspects 160 86 30 37
Vulnerability assessment of Forex
Bureau sector
The assessment of this sector’s vulnerability was based on AML variables controls and inherent vulnerability. General AML Controls The assessment identified key weaknesses, including limited staff understanding of AML requirements, a low level of supervisory activity in the sector, and inadequate enforcement of administrative sanctions. Furthermore, inadequacies in the compliance function impact the monitoring and reporting of suspicious activities. Customer due diligence measures are not effectively applied; service providers do not rely on identification infrastructure or any independent data sources to verify client identities. As a result, the assessment rated the quality of AML controls as Medium.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 47 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT Inherent Vulnerability The assessment demonstrated currency exchange as the most vulnerable mainly due to high level of involvement of cash. The overall money laundering vulnerability in the sector was rated Medium high, due to inadequate AML control measures and products inherent vulnerabilities. Consequently, the money laundering risk for this sector was rated Medium derived from the level of threat (Medium low) and vulnerability (Medium high) in the sector.

Recommendations
The following are key recommendations:
The regulator should enhance
supervisory activities in the sector in order to ensure effective compliance with key AML requirements;
The regulator should strengthen its
monitoring mechanisms to identify those operating in the sector without authorization/license and apply dissuasive measures; and
The Supervisory authority should
organise specific trainings for players in the sector in order to increase their understanding of AML obligations.
2.4.2.7 . Money remittance risk assessment
Overview
The money remittance sector comprises 8 licensed companies that provide services for sending and receiving money on behalf of clients, both domestically and internationally and they are under the supervision of the NBR.
Threat assessment of Money
Remittances
The sector threat level was rated Low due the fact that no money laundering cases involving money remittance were identified. However, findings from a public perception survey indicated that money remittance services are particularly vulnerable to ML abuse. These services enable international money transfers, allowing criminals the possibility to quickly and easily move funds, either directly or through third parties, between countries. This makes it easier to transfer illicit funds to jurisdictions with weak AML/ CFT measures.
Vulnerabilities assessment of Money
remittances
The assessment of this sector’s vulnerability was based on AML variables controls and product inherent vulnerability. General AML Controls The assessment noted that all operators in the sector have developed AML/CFT policies and procedures to enable them to comply with AML-CFT obligations. However, the assessment identified some weaknesses such as inadequate supervision, limited AML knowledge of staff, ineffectiveness of compliance function and inadequate suspicious activity monitoring and reporting. Hence, the assessment concluded that the quality of AML controls in the sector is Medium. Inherent Vulnerability Money remittance products are inherently vulnerable to ML abuse mainly due to their cross-border nature. The assessment revealed that the client base in this sector primarily consists of individuals. The overall money laundering vulnerability in the sector is rated Medium, due to inadequate AML control measures and products inherent vulnerabilities. Consequently, the money laundering risk for this sector was rated Medium low derived from threat rating (Low) and vulnerability rating (Medium).

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Table 3: Remittance in USD Million
Personal transfers 2018 2019 2020 2021 2022 2023 Receiving 253 252 274 379 461 505 Sending 52 42 36 37 46 47 The sector is growing and is predominantly driven by inflows, primarily from the diaspora sending back home to support their families.

Recommendations
The following key recommendations have been made:
Enhance compliance with reporting
obligations and ensure compliance with other requirements specifically CDD and records keeping;
The regulator should apply the risk
base approach to ensure effective supervision in the sector;
Money remittance companies
are required to conduct ML risk assessment and keep it updated; and
Participants in the sector must develop
AML compliance programs.
2.4.3 . ML risk in DNFBPs Sector
2.4.3.1. Overview of DNFBPs
The Designated Non-Financial Businesses and Professions (DNFBPs) operating in Rwanda include: real estate agents, casinos, dealers in precious stones and precious metals, accountants and auditors, lawyers, notaries, bailiffs, Trusts and Company Services Providers (TCSP), and tax advisors. All of them are supervised for AML purpose and are required to comply with AML Legal obligations.
Real estate sector
Real estate operators in Rwanda are coordinated under the Rwanda Association of Real Estate Brokers (RWAREB), which aims to promote professionalism within the sector. However, it remains a voluntary association, and the sector does not have a designated regulator or supervisory authority. As of 2023, in the real estate sector had 74 active members registered with RWAREB. However, some real estate operators chose to operate independently, opting not to join the association for various reasons. According to 2023 statistics, the real estate sector contributes 5% to the GDP (NISR, 2023). For AML/CFT regulatory purposes, the real estate sector is under the supervision of FIC as per article 7 of the FIC Law Nº 045/2021 of 18/08/2021 governing FIC. Through the supervisory activities FIC monitors the sector’s compliance with AML/CFT obligations.
Precious Metals and Stones Dealers
The mining sector, governed by Law N° 072/2024, has expanded its mineral portfolio, including emerging resources like lithium and beryllium. They are 75 registered dealers in Precious Metals and Stones. This sector contributes 2% to GDP (NISR, 2023). The sector falls under the supervision of the Rwanda Mines and Petroleum Board (RMB) for AML/CFT regulation.

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Casinos15
The Ministry of Trade and Industry (MINICOM) had been overseeing gaming activities, including casinos, regulated by Law No. 58/2011 until 15 June 2024. In 2024, only 13 gambling licenses remain active, down from 26 in 2021, largely due to COVID-19 disruptions and the suspension of slot machine licenses. These include 6 licenses for sports betting and 2 licenses for casinos. After the regulatory transition to Rwanda Development Board (RDB), 10 casino applications are pending for approval.
Accountants & Auditors
The Institute of Certified Public Accountants of Rwanda (ICPAR) is a selfregulatory body for accountants and the auditors. The current number of registered professional accountants/auditors is 94. Although the sector’s exposure to money laundering risks is minimal, a sectoral risk assessment identified the need for greater awareness of AML vulnerabilities and threats.
Advocates/Lawyers
Lawyers in Rwanda are regulated by the Rwanda Bar Association (RBA), comprising 1,370 advocates, including 155 pupils. Currently, there is no clear distinction between law firms that handle real estate transactions or manage clients’ funds, --areaswhich poses potential ML risks in the legal sector. RBA has published AML/ CFT sanctions and conducted supervision of its members to ensure compliance with their AML/CFT obligations.
Notaries
Notaries in Rwanda are governed by Law No.13bis/2014 and perform duties such as authenticating legal documents. There are 482 private notaries, with 72 involved in real estate transactions. No private notary has been convicted of economic crimes, but one was administratively sanctioned. Notaries fall under the supervision of Ministry of Justice for the purposes of AML/CFT regulation.
Tax Advisors
The Tax procedure law No 020/2023 of 31/03/2023, specifically article 98, establishes the legal framework for licensing tax advisors. A desk review risk assessment on AML/CFT threats revealed that licensed tax advisors have limited understanding of money laundering risks, highlighting the need for increased awareness efforts.16 Currently, the Rwanda Revenue Authority (RRA) has licensed 269 tax advisors, who play a vital role in promoting tax compliance.
Trust and Company Service Providers
(TCSPs)
TCSPs, regulated by the National Bank of Rwanda (BNR), offer services such as company incorporation and nominee shareholder functions. The sector remains small and specialized, with nine licensed TCSPs in Rwanda.
Bailiffs
Based on Law N° 12/2013 of 22/03/2013, which governs bailiffs’ functions, Article 4 establishes the Professional Bailiff Association as an independent body. There are 436 registered professional bailiffs. The NRA assessment revealed that at least five (5) bailiffs were involved in ML-related crimes, with two convicted and three cases still pending in court. 15Rwanda Gambling Policy October 2024 16xxx

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 50
2.4.3.2. ML Threat in DNFBPs
To assess ML threat in DNFBPs, the analysis focused on predicate offences committed within DNFBPs sectors to identify the sector with has the highest prevalence of ML predicate offences. The findings revealed that the real estate sector is the only DNFBP in this category rated as having a high threat to ML due to the significant occurrence of ML predicate offences. In contrast, the threat level in other DNFBPs subsectors was rated low. During the assessment period, 19 ML cases involving money laundering through the real estate were investigated, 18 were prosecuted resulting in 5 convictions. Case study: Real estate In this case, the prosecution accuses Mr. XY of illicit enrichment, money laundering and terrorist financing, primarily due to his inability to explain the origin of his assets despite his long career as a government employee in different hospitals. The prosecution argues that his income over the period does not match the wealth or properties he then possessed, charging him with illicit enrichment and possible illegal financial activities. In this case, the investigation revealed that Mr. XY illicitly owned substantial assets, including houses valued at Frw 543,644,500, land registered in seven plots, a Jeep, two trucks, and large sums of money transacted through various accounts, which were determined to be beyond his legitimate means. The court convicted him of illicit enrichment, sentencing him to four years of imprisonment and ordering the confiscation of all properties deemed to be proceeds of the crime. However, the suspect was acquitted of the charges of money laundering due to insufficient evidence to prove those accusations. Case study: Real estate Mr. AB, who had occupied the position of Land Officer in District, was charged with illicit enrichment. The assets in question include: a house valued at 81,603,800 Rwandan Francs, a piece of land valued at 26,424,000 Rwandan Francs and a piece of land valued at 23,075,000 Rwandan Francs which the accused was unable to justify the source based on his legitimate earnings. The prosecution accused him illicit financial activities and charged him with using forged documents, illicit enrichment, money laundering. The court found both the suspect and his accomplice guilty, sentencing them to 12 years and 9 months of imprisonment. In addition to the prison sentence, the court ordered the confiscation of all properties linked to the crimes. These confiscated assets were proceeds of illegal activities, acquired with forged documents and other illicit means.

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2.4.4.3. ML Vulnerability in DNFBPs
All DNFBPs are designated as reporting persons and obliged to comply with the AML/CFT requirements. While there are strong legal frameworks in place and most of their supervisory authorities undertake supervisory activities, the application of risk-based approaches and provision of training on AML obligations remains inadequate. Additionally, many DNFBPs lack an independent compliance function, don’t have AML programs, have not designated Money Laundering Compliance Officers (MLCOs) and generally their level of understanding of AML/CFT obligations is low. The real estate sector is more vulnerable due to the lack of dedicated regulator and ineffective entry controls while the sector is highly attractive to criminals who want to launder their illicit funds. The overall ML vulnerability of the DNFBPs sector is rated Medium, where Bailiffs sub-sector is the most vulnerable rated Medium High, with the rest of the sectors vulnerabilities being Medium. As illustrated in the table immediately below.
Figure 18: Money laundering risk in DNFBPs
Sector Threat Vulnerability Importance Risk Level TCSPs 1 0.41 1 L Bailiffs 1 0.73 1 L Lawyers 1 0.5 1 L Tax Advisors 1 0.41 1 L Notaries 1 0.58 1 L Casinos 1 0.59 1 L Precious Metal& Stones 1 0.55 5 ML Real Estate 4 0.58 4 MH Accountants and Auditors 1 0.4 1 L

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 52 The assessment identified that within the DNFBPs sector, the real estate subsector is rated Medium-High, followed by Precious Metals and Stones at Medium-Low. These two sectors are considered the most at risk compared to other DNFBPs sectors, which are generally rated Low in terms of ML risk.
2.4.4.4. Key recommended actions
To ensure the protection of DNFBPs sector from being misused for money laundering and enhance compliance with AML standards the following recommendations:

There should be established
regulatory mechanisms for real estate operators and put in place licensing requirement to ensure control of entry into the sector;
All DNFBPs’ Supervisors are
required to enhance risk-based supervision of reporting persons under their supervision
FIC in collaboration with supervisory
authorities should conduct awareness campaigns for DNFBPs regarding AML/CFT obligations
There should be risk-based
supervision manual customised to each sub-sector
Undertaking AML/CFT trainings
by staff members should be made compulsory to all staff and considered as a performance evaluation indicator
DNFBPs supervisors should ensure
that the reporting persons conduct independent audits of their AML programs,
All DNFBPs should update their
internal policies and procedures deploying a risk-based approach.

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Terrorist Financing Risk at National
Level
3.1.1 Country context for terrorist
financing
Rwanda’s location within the region with a history of conflict and the presence of active militant groups, particularly in neighbouring countries, heightens its potential exposure to TF risks. Rwanda has taken proactive steps to address the gaps and recommendations outlined in the MER of 2023, by conducting TF risk assessment, revising the regulatory framework, establishing institutional reforms (CFT institutions), strengthening border security and enhancing CFT public awareness. Despite these efforts, regional militant groups like the Democratic Forces for the Liberation of Rwanda (FDLR) and the Conseil National pour le Renouveau et la Democratie – Forces de Liberation Nationale (CNRD–FLN) continue to engage in cross-border smuggling and other illegal activities, potentially funding terrorism. In addition, the country has strengthened its AML/CFT framework, aligning its terrorism financing definition with FATF standards and collaborating with international partners to combat terrorism and its financing. However, challenges remain, including limited effectiveness in investigating and prosecuting terrorist financing and difficulties in tracking financial flows due to an informal economy. Given regional instability and porous borders, Rwanda has strengthened collaboration with neighbouring countries and regional organizations to combat cross-border TF. The government remains vigilant in detecting, preventing, and addressing terrorism and its financing at both domestic and international levels. Terrorist incidents within the country have resulted in loss of life and property destruction. During the assessment period, 19 terrorist financing cases were investigated and prosecuted. However, the cases are at the appeal level. Rwanda’s national TF risk assessment examined both threat and vulnerability variables. TF threats relate to activities or individuals potentially financing terrorism, while TF vulnerabilities involve the effectiveness of control frameworks designed to prevent such financing.
3.1.2 Overall Terrorist Financing risk
Rwanda’s terrorist financing threat is primarily associated with regional groups such as the FDLR, CNRD-FLN, RNC-P5, and ADF-ISCAP operating within the region. While the majority of these groups are politically motivated, the ADF-ISCAP is driven by a religious ideology. Although these groups lack a direct operational presence within Rwanda, their geographical proximity to its borders heightens the risk of recruitment and radicalization. This threat is compounded by the influence of political and religious ideologies, which create exploitable vulnerabilities for sympathizers and affiliates, both regionally and internationally. The national TF risk was rated Medium,

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 55 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT emanating from the overall threat rated Medium and the overall vulnerability rated Medium Low. This rating reflects enhanced vigilance, stakeholder information sharing, strengthened border controls, awareness campaigns, and the enhanced LEAs’ efforts and quick interventions. A summary is provided in the figure below:
Figure : Overall TF risk in Rwanda
H M M MH
MH M M MH MH H
M ML M M MH MH
ML M
L L ML ML M M
L ML M MH H
O V E R A L L V U L NE R A B IL IT Y O v e rall T F ris k in R w anda OVERA LL THREA T
2. Terrorist Financing Threat
TF threats was assessed taking into account FATF recommendations and the understanding of TF risks in the specific sectors. While rating the TF threat, the following variables were considered:
active terror groups, politically unstable neighbouring jurisdictions, terrorist sympathizers and other factors. Rwanda is vigilant against TF activities at both domestic and international levels, as active terror networks in neighbouring countries heighten its TF risk. While the domestic TF threat is rated Low, the external threat is Medium-high, resulting in an overall TF threat level of Medium.
3.2.1. Domestic Terrorist Financing Threat
Analysis
The domestic TF threat in Rwanda is linked to the regional groups that directly target the country. While ADF-ISCAP focuses on the Ugandan government, it also attempted attacks on Rwanda. Domestic TF threat is rated as Medium-Low, with 19 cases recorded over the past (review period of five years). These cases involve financing from foreign jurisdictions, particularly related to groups like FDLR, CNRD-FLN, and sympathizers of ADF. The assessment revealed that terrorist financiers primarily use cash couriers, mobile money, and money remittances (e.g., Western Union and MoneyGram) for fund transfers.

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3.2.2 External Threat (Regional &
International)
The external threat stems from foreign terror groups that have established hideouts in neighbouring countries. During the assessment period, intelligence and open-source information revealed incidents of terrorists targeting Rwanda. The threat from foreign jurisdictions has been rated as Medium-High, as most recorded terror attacks and terrorist financing cases since 2019 have been linked to armed groups based in the DRC and Burundi. Notable groups include FDLR-FOCA and its affiliates, CNRD-FLN, and ADF/ISCAP, which have previously conducted or attempted attacks on Rwanda. Some of those groups and some terrorists have been designated by UNSC such as the FDLR, while other armed groups operating in neighboring countries such as CNRD-FLN and RNC-P5 have been listed by the Government of Rwanda. Similarly, the Allied Democratic Forces (ADF), active in the DRC, has been designated by Uganda, as noted in reports from the UN Experts Group on Eastern DRC. Case Study In the case accusing four co-accused FDLR-FOCA sympathizers, the defendants were charged with conspiracy to recruit and raise funds for the terror group. Two of the accused offered Frw 3,000 and Frw 2,000 as transport fare for new recruits traveling from one District to join FDLR in Eastern DRC. A total of Frw 5,000 contributes to the recruits’ preparation for training and execution of terror attacks in Rwanda. All the four were convicted of terrorism and terrorist financing; Two were sentenced to 7 years in prison each, one sentenced for 4 years, while the other was sentenced up to 4 years in prison. The successful apprehension of the suspects was attributed to the vigilance of security organs and timely information sharing, which helped disrupt the planned attack. The UNSC has condemned support for these armed groups, emphasizing the need to cease such assistance. This was reiterated in a statement by the President of the Security Council during its 9437th meeting on October 16, 2023.17 Overall, these regional terrorist groups pose significant threats to Rwanda’s security at different levels. Since 1994, FDLR has been the most active armed group that continues to plan and execute terror activities against Rwanda. FDLR receives funding for its operations through the plundering of natural resources, illegal taxation, and donations from local and international sympathizers, as well as substantial support from the host state. The 2024 UN Group of Experts report highlighted the looting of natural resources by FDLR, including carrying out of illegal activities such as logging, and taxation estimated to generate approximately $340,000 per year for the group. Reports from the UN Group of Experts on DRC indicate that the Government of the Democratic Republic of the Congo has continued to support North Kivu armed groups, including sanctioned FDLR commanders, enabling them to carry out attacks against Rwanda. 17https://press.un.org/en/2023/sc15443.doc.htm

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 57 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT Terrorist financing threat posed by FDLRFOCA and its affiliates is rated as MediumHigh. The CNRD-FLN, a splinter faction of the FDLR, operates actively in the D RC and Burundi. From 2018 to 2020, the group carried out multiple attacks on Rwandan territory. It gets financial support and supplies from sympathizers and certain elements within its host country. Threat from the CDRD-FLN has been rated as MediumHigh. The ADF, an Islamic fundamentalist armed group based in eastern DRC, targets the Ugandan government but has expanded its violence across the region, engaging in killings and resource looting. The group now represents IS in Central Africa—locally known as Islamic State Central Africa Province (ISCAP) and linked to Mozambique’s Ansar Al Sunna, active in Cabo Delgado. Following the deployment of Rwanda Security Forces (RSF) to Mozambique, which dislodged Ansar Al Sunna from their stronghold, ADF collaborators retaliated by attempting to launch an attack Rwanda. Reports indicate that ADF gets external financing from South-Africa and Europe, with funds directed to terror groups like FDLR, CNRD-FLN, and ADF. Consequently, the ADF threat was rated Medium-High. The RNC-P5 group operates from bases in South Kivu, DRC, with leadership based in Southern Africa and active members dispersed throughout the region. During 2010 and 2013, the group carried out minor attacks in Rwanda. Although the group remains politically active, its military strength has significantly weakened, resulting into a Low rating. Rwanda’s strong counter-terrorism measures and stakeholders collaboration have been key in reducing the TF threat, which is rated Medium. During 2019 and 2024, Rwanda recorded 19 terrorism and terrorist financing cases. 13 terrorism cases resulted into convictions, with 43 individuals convicted on terrorism-related charges, some involving TF offenses. Case study In 2019, RUD-Urunana, an FDLR-affiliated terror group, collaborated with RNC-P5 to launch a deadly attack in Rwanda. The assault claimed the lives of civilians and injured others. Several attackers were captured and brought before a military court, facing charges of terrorism, murder, and forming an irregular armed group. Additionally, charges of terrorist financing were filed against suspected financiers. In 2022, six of the accused were convicted.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 58
3.2.3. Other Factors affecting Terrorist
Financing threat

Geographic and Demographic
factors
The free movement of armed groups within the neighboring countries, cross-border population ties, the presence of foreign asylum seekers, and high levels of human mobility are factors that may contribute to facilitating TF activities. Rwanda’s youthful population, comprising 27% of the demographic, combined with its knowledge and innovation in IT, positions the country as a leading investment destination in the region. To mitigate associated threats, Rwanda implements strong border controls and ensures prompt exchange of information between competent authorities. As a result, the TF risk posed by these factors was rated Medium-Low, based on countermeasures in place to combat TF. Case study In 2021, ADF planned attacks on two busy public sites in Kigali, which was intended as retaliation against Rwanda for its intervention in Mozambique’s Cabo Delgado province, supporting Ansar Al Sunna. However, the attacks were not executed, as its operatives were apprehended before they could execute their mission to detonate a bomb. ADF operatives were recruited and financed by senior commanders in Eastern DRC. The lead coordinator received Frw 50,000 from ADF commander Saraudin via Mobile Money, which was used for transportation and to purchase materials for an Improvised Explosive Device (IED). These operatives used Moto-cycle transportation, which is fast and very affordable. The 13 suspected ADF operatives and sympathizers were brought before court for terrorism and terrorist financing. The case was adjudicated; 12 suspects were convicted for terrorism charges. The terrorist financing related cases are under appeal process.
Cross border cash movement
Despite the growth of digital payments and money transfer, cash remains a primary financial settlement method in the region, with both legal and illegal cross-border cash movements which may facilitate TF, particularly in conflictaffected neighbouring areas. Pending cases indicate that €53,199 and $30,782 were funnelled into Rwanda from abroad, while Frw 561,000 was generated domestically.
Threat from neighbouring countries
The neighbouring DRC and Burundi host active terrorist groups namely, FDLR, CNRD-FLN, and ADF, which launch attacks on Rwanda. These groups control territories for resource extraction and engage in illegal activities such as mining, logging, wildlife trade, extortion, and drug trafficking. The 2024 UN report on DRC revealed that on April 8, 48-armed group leaders from conflict regions met with the DRC

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 59 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT president to discuss, among other issues, ongoing cooperation with the FDLR-FOCA, despite international calls for the DRC to end such alliances.
3. National vulnerability to TF
The TF vulnerability assessment examined various aspects, including domestic and external vulnerabilities, as well as the capabilities to combat TF threats. It identified strengths and weaknesses that influence the country’s overall vulnerability to TF. These are discussed in seriatim in sections below:
3.3.1. National strengths to counter TF
The country has strengthened its counterterrorist financing measures through the establishment of legal and institutional frameworks. It has also established coordination and collaboration framework for the sharing of information.

Legal framework
Rwanda has elaborated comprehensive legal and regulatory instruments to prevent and control terrorist financing and has also ratified several relevant international conventions and protocols. These efforts encompass a range of the following instruments:
International instruments
Convention on the Physical
Protection of Nuclear Material and Nuclear Facilities: Adopted in Vienna on October 26, 1979, and ratified by Presidential Order No. 45/01 on April 14, 2002.
International Convention Against
the Taking of Hostages: Adopted by the United Nations General Assembly on December 17, 1979, and ratified by Presidential Order No. 41/01 on April 14, 2002.
Convention on the Prohibition of
the Development, Production, Stockpiling, and Use of Chemical Weapons and on Their Destruction:
Adopted in Paris, France, on January 13, 1993, and ratified by Presidential Order No. 32 ter/01 on October 17, 2003.
International Convention for the
Suppression of Terrorist Bombings:
Adopted by the United Nations General Assembly on December 15, 1997, and ratified by Presidential Order No. 40/01 on April 14, 2002.
OAU Convention on the Prevention
and Combating of Terrorism: Signed in Algiers on July 13, 1999, and ratified by Presidential Order No. 39/01 on April 14, 2002.
International Convention for the
Suppression of the Financing of Terrorism: Adopted by the United Nations General Assembly on December 9, 1999, and ratified by Presidential Order No. 43/01 on April 14, 2002. In addition to the above instruments, Rwanda has also ratified the following optional protocols to strengthen its CTF legal framework:
The Protocol for the Suppression of
Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf, adopted in Rome, Italy, on 10/03/1988, ratified by Presidential Order no 42/01 of 14/04/2002. However, the list is not exhaustive

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 60 Domestic instruments The aforementioned international legal instruments above have been domesticated through the implementation of the following national legalisation:

Counter Terrorism Law No 46/2018,
(as amended), designates “terrorism,” and supporting or promoting terrorism as capital offences, punishable by imprisonment for a term of not less than fifteen (15) years but not more than twenty (20) years.
Law nº 028/2023 of 19/05/2023 on the
prevention and punishment of money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.
Regulations n° 001/fic/2021 of
26/08/2021 on targeted financial sanctions related to terrorism, terrorist financing, and proliferation of weapons of mass destruction and its financing.
Institutional framework
The following institutions/organs have been established and are mandated to address issues relating to TF:
The Coordination Council responsible
for preventing and fighting Money Laundering, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction. governed by Presidential Order No. 100 of 2021
National Counter Terrorism Committee
governed by the Prime Minister’s Order 18 of 2021
Financial Intelligence Centre, the
national Centre receiving, analysing STRs and other information on TF and disseminating the results of such analysis to competent authority. It is governed by Law Nº 045/2021 of 18/08/2021.
The specialized team in Law
Enforcement Agencies and Security organs handling Terrorism/ TF
Collaboration framework
The National cooperation on TF is strengthened through enhanced collaboration among key stakeholders, including LEAs and other relevant authorities. This is facilitated by a Joint Operations Centre (JOC) and MOUs between supervisory and competent authorities, which promote information sharing and ensure the effective implementation of existing frameworks.
3.3.2. National weaknesses identified in
countering TF
The assessment considered several variables in determining the country capabilities to combat TF. These include the quality of legislation and intelligence, the adequacy of resource, effectiveness of collaboration, awareness and commitment to fight TF, the effectiveness of institution in implementing TF related requirements.
Effectiveness of Legislation
While the legal framework is in place to counter TF, some gaps can still be identified including the lack of a definition that thoroughly addresses all the essential elements of the crime of TF to meet the international standards; gaps in implementing Targeted Financial Sanctions (TFS) related to TF. Further, though the relevant law provides for the publication of the domestic list of designated persons, that list has not been prepared and published. Thus, the effectiveness of the legislation impact on TF vulnerability was rated Medium High.
Effectiveness of Intelligence
The effectiveness of intelligence gathering and processing for TF in Rwanda is assessed based on institutional capabilities and collaboration, particularly the cooperation of FIC and intelligence

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 61 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT agencies in sharing information. Intelligence is shared and is verified across all agencies for consistency and accuracy. The institutional collaboration is supported by the Joint Operation Center (JOC), MoU signed for information sharing, and the establishment of the National Counter Terrorism Committee (NCTC) and Coordination Committee (CC) and their technical committees. However, there are still weaknesses in technological resources (no access to commercially held database) and the operationalization of frameworks, as some key authorities, like the National Cyber Security Authority, are not yet included in the cooperation framework. Additionally, limited resources of some authorities impact the effectiveness of TF intelligence gathering and analysis. Another weakness noted is that LEAs don’t routinely request for information from FIC to support the investigation etc. As a result, the quality of intelligence in reducing TF vulnerability is rated as Medium.

Adequacy of Resources
The human and financial capacity and skills of investigators, prosecutors, and judges to effectively address TF cases remain inadequate. Specialized TF investigation sections have been established, yet effectiveness is hindered by insufficient skills of dedicated team and limited resources. Additionally, the insufficiency of strategic analysis, absence of research and typologies on TF further impact effectiveness. Consequently, the adequacy of resources for TF-related tasks was rated Medium -Low.
Effectiveness of International
Cooperation
Rwanda’s AML/CFT law and domesticated treaties support international cooperation on TF matters. There is legal framework on MLA and Extradition as well as bilateral agreements on international cooperation. Formal requests for MLA and extradition are channelled through the Ministry of Foreign Affairs and International Cooperation (MINAFFET). RIB, NPPA and MINIJUST are competent Authority for MLA. MINAFFET, through the Central Authority registers all incoming and outgoing MLA and extradition requests. However, there is no case management system to facilitate this process. Moreover, authorities face challenges in seeking timely MLA and extradition due to the inefficiency in making follow-ups on requests; there is no guidance on requests follow-up and on prioritization. Despite three TF-related MLA requests sent to regional and international counterparts, none received responses. This, reveals gaps in implementation and transmission effectiveness. Consequently, effectiveness of international cooperation was rated Medium Low. Case study In prosecuting a case against a member of the terrorist group CNRD-FLN. A formal request for MLA was made to a foreign country, however, to date no response has been given.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 62

Awareness and Commitment to fight
TF
Relevant authorities are allocated funds within their budgets to support efforts to counter TF. These funds are earmarked for use in capacity building, awareness raising on TF and conducting other relevant activities related to TF within the mandate of the respective authorities. These institutions have a mandate to ensure that the country’s financial system is not abused for TF. Specialized trainings were provided to LEA’s staff and the compliance officers. However, ME has indicated that the understanding of TF is varied among institutions and generally is limited. Hence, capacity building activities have to be increased and cover all sectors. As a result, the effectiveness of this measure was rated TF Medium Low.
Effectiveness of TF-related
Suspicious Transactions Reporting, Monitoring and Analysis The assessment revealed significant gaps in understanding TF risks and inadequate enforcement of Targeted Financial Sanctions under UN Security Resolutions. Additionally, the reporting of suspicious transactions and activities related to TF remains low

Terrorist Financing risk at Sectoral
Level
Rwanda’s financial sector faces TF risks due to neighboring high-risk jurisdictions with prevalent terrorist activities and minimal transaction oversight. Rwanda’s geographic and geopolitical position exposes its financial sector to TF risks due to high-risk neighboring countries with limited TF controls and active armed groups. The analysis of TF cases and analysis of other data indicate that the E-Money Issuers and Money Remittances sectors at the risk of TF were rated Medium-Low. These sectors were commonly used to transfer funds both domestically and internationally, with some cash also being transferred through couriers. The table below summarizes the TF risk rating per sector:
Table 4: Rating of terrorist Financing Risk at Sectoral level
SECTOR RATING
Banking Low
Real Estate Low
Forex Bureaus Low
Casinos Low
Lawyers Low
Accountants Low
Dealers in precious stones & metals Low Insurance Low Securities Low E-Money Medium Low Money Remittance Medium Low Microfinance Institutions Low Virtual Asset Service Providers Low NPOs Low

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 63 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT E-Money Issuers and Money Remittances were rated Medium-Low while other sectors were rated Low.
5. Methods used for Terrorist Financing
The analysis of terrorist financing cases investigated, the views from group discussions and public consultations indicate that terrorist/terrorist groups get money from the plundering of natural resources, illegal taxation, and donations from local and international sympathizers and some elements from the host country, receiving substantial support from the host state. The funds raised are moved in cash by human couriers or through e-money issuers (Mobile Money) or money remittance channels. Additional support is provided through availing the transport facilities. Mainly, these funds are used for transportation, recruitment/training of fighters and to purchase arms and weapons.
6. Key Recommended actions
The Following are key recommended actions for mitigating risks associated with terrorist financing:

Enhance collaboration on TF by
establishing mechanisms to followup and prioritise requests and establishing appropriate requests management systems;
Enhance border control mechanisms
and ensure compliance with cross border cash and BNI declaration/ disclosure requirements
Intensify capacity building activities
on TF with specialised training on TF detection, investigation and prosecution
Promote joint investigation on TF to
ensure the good quality and timely investigation
Produce strategic analysis to identify
possible techniques and methods used for TF in order to inform policy and decision makers
Revise existing legal instruments in
order to address technical deficiencies in relation to TF and TFS and ensure effective implementation of TFS without delay
Create and disseminate the domestic
list of designated to relevant stakeholders
Increase public awareness on TF,
especially to youth on their risk of being used for Terrorism and/or radicalization
Ensure close monitoring of E-money
issuers and Money remittance services

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 64 LEGAL PERSONS AND LEGAL ARRENGEMENTS RISK ASSESSMENT 4

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 65 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT

Introduction
Legal persons and legal arrangements, also known as legal structures are used to conduct a wide range of commercial activities and they play an essential role in the global economy. Legal structures can be easily established and swiftly gain access to the financial system by opening bank accounts, obtaining loans, and utilizing other financial products, and they may also be misused for laundering illicit funds. This chapter is a report of the ML vulnerabilities and threats posed by legal persons and legal arrangements sector.
4.1.1. The Overall ML Risk in Legal structure
The assessment rated the overall ML risk for legal persons and legal arrangements in the country, Medium. This derives from the rating of ML threat posed by the abuse of legal structures as medium low, and the jurisdiction’s overall vulnerability to ML abuse rated medium.
Figure 21: Overall ML risk in legal structure
4.1.2. Mapping Legal Persons and Legal
Arrangements
The mapping exercise facilitated the collection of data on registration, formation requirements, basic information, beneficial ownership information, the use of nominees and bearer shares, as well as common business activities to provide a comprehensive overview of all legal structures. The legal structure in the context of Rwanda is made up of legal persons and arrangements. The laws governing their registration and responsible institutions for enforcing compliance is highlighted in the Figure 22 below:

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 66
Figure 22. Structure of Legal persons and arrangements in Rwanda
Legislations Legal Structures Name of government agency responsible for maintaining registry & enforcing compliance Law N° 007/2021 of 05/02/2021 governing companies, as amended and completed to date. Private Company limited by shares; Public Company limited by shares; Company Limited by Guarantee; Company Limited by Shares and by Guarantee; Foreign Company; Unlimited Company; Community Benefit Company; Protected Cell Company (PCC). Rwanda Development Board/ Office of the Registrar General Law Nº 008/2021 of 16/02/2021 governing partnerships as amended and completed to date.

General partnership;
Limited Liability
Partnership;
Limited Partnership.
Rwanda Development
Board/ Office of the
Registrar General
Law Nº 059/2021 of
14/10/2021 governing foundations
Private-benefit foundation;
Mixed-Benefit Foundation;
Rwanda Development
Board/ Office of the
Registrar General
Common Benefit
Foundation.
Rwanda Governance
Board
Law N° 063/2021 of
14/10/2021 governing trusts Trusts Rwanda Development Board/ Office of the Registrar General Law n° 057/2024 of 20/06/2024 governing cooperatives in Rwanda Cooperatives Rwanda Cooperative Agency Law N°72/2018 of 31/08/2018 determining the organisation and functioning of faithbased organisations Faith-Based Organizations Rwanda Governance Board Law n° 058/2024 of 20/06/2024 governing non-governmental organisations
National Non-Governmental
Organisations;
International NonGovernmental
Organisations
Rwanda Governance
Board

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 67 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT The mapping exercise revealed that no legal structure is exempted from registration and the detailed registration requirements are provided in their respective legislation. Although legal structures have been required to collect and submit beneficial ownership (BO) information since 2021, implementation remains in its early stages. Notably, for cooperatives, the obligation to report BO information was introduced only recently, under the new law enacted in 2024. It was also noted that the sanctions prescribed by law for non-compliance with BO requirements have not been fully enforced in practice. Therefore, there is a need to strengthen enforcement of the existing compliance measures. Rwanda is implementing transparency measures, including BO identification, verification and reporting requirements for foreign legal structures established in other jurisdictions that wish to operate in Rwanda. However, due to the absence of cooperation frameworks for the expedited exchange of BO information. Rwanda would rely on standard MLA processes. On the other hand, Rwanda has effectively prohibited companies from issuing bearer shares, a critical measure to prevent the misuse of legal structures for ML. Additionally, company law mandates that nominee shareholders or directors disclose information identifying their nominator and the natural person they ultimately represent, with such details recorded in the register of beneficial owners. Furthermore, Rwanda has established regulations governing TCSPs that may act as nominee shareholders or directors.
4.1.3. The Scale of Legal Structures
All registered legal persons and legal arrangements as of 30 June 2024 were 179, 512 made of 179, 487 legal persons and 25 legal arrangements.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 68
Table 5:The scale of the legal structures
No Legal Structures
2019-2020
2020-2021
2021-2022
2022-2023
2023-2024
All registered as of
30th June 2024
Legal Persons
1 Private Company Limited by shares 11,311 16,883 17,735 18,923 18,344 162,750 2 Cooperatives 433 368 171 171 481 11,105 3 Public Companies limited by shares 108 131 115 124 134 1,045 4 Private Unlimited Company 68 248 196 179 214 1,020 5 Companies Limited by Guarantee 84 145 155 147 92 850 6 Foreign Companies 43 50 63 65 63 779 7 National NGOs 115 112 81 95 121 777 8 Company Limited by shares and Guarantees (Both Private &Public) 58 68 67 60 99 463 9 Faith-Based Organizations 31 24 37 33 19 398 10 International NGOs 11 16 11 15 21 120 11 Community benefit companies 0 0 15 35 32 110 12 Common Benefit Foundations 0 25 32 57 13 Mixed Benefit Foundations 0 1 8 9 14 Limited Liability Partnerships 0 3 3 15 Protected cell company 0 0 1 0 1 16 Private Benefit Foundation 0 Legal arrangements 17 Trusts 2 1 1 3 2 20 18 Limited Partnerships 0 2 3 5 19 General Partnerships 0 Source: RDB, RCA, and RGB
2. ML threat assessment for Legal
Persons and Legal arrangements During the assessment period, one ML case involving 48 legal structures, was detected, and court proceedings are still ongoing. The assessment focused on predicate offenses involving legal structures. The overall ML threat level was determined based on: level of ML abuse based on enforcement data that was rated “Low”; and the level of ML abuse based on threat perceptions and open sources that was rated “Medium”. Therefore, the overall ML threat posed by the legal structures was rated “Medium Low. In the assessment, 73 legal structures including 59 companies, 1 national NGO,

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 69 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 1 cooperative and 12 companies not registered in Rwanda were cited in the reported STRs. Compared to the 179, 512 registered legal structures (as shown in Figure22 above), the number of legal structures cited in reported STRs remains relatively low. Based on available data, no MLA requests have been sent or received regarding legal structures involved in ML. However, the only issued five MLA requests were related to fraud, and only one fraud-related MLA request was received. A total of 122 legal structures were investigated for involvement in ML and predicate offenses. Of these, 48 were investigated and prosecuted for ML, 62 for tax evasion (with 32 prosecuted and 30 convicted), and 12 for fraud (with 7 prosecuted and 1 convicted). All the legal structures under investigation were private companies limited by shares. Therefore, the level of criminal investigations, prosecution and conviction into money laundering that have involved legal structures in Rwanda was rated Low.

Perceptions and open sources
The overall level of ML abuse to legal structures, as assessed through perceptions by public sector experts, academic experts, and private sector professionals, combined with insights from open sources, has been rated as Medium.
Figure 11: Perceptions and open source

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 70
3. ML vulnerability assessment for
Legal Structures
The National ML Vulnerability Assessment for legal structures aims to assess Rwanda’s vulnerability to ML abuse, review existing mitigation measures, identify gaps in the beneficial ownership framework, and determine where additional safeguards are needed, all while minimizing any burden on legitimate business activities. The ML vulnerability assessment evaluated Rwanda`s attractiveness for non-resident incorporation (ANRI) and assessed the strength of its mitigation measures against the illicit abuse of legal structures. As a result, the overall national ML vulnerability of Rwanda’s legal structures was rated Medium. Case study The prosecution filed a lawsuit against individuals X, Y, and Z, claiming they met as shareholders in a company called A Ltd, which operates in consultancy services. From late 2021 to late 2022, as shareholders of A Ltd, they created an online cryptocurrency platform. They called upon people to invest their money, deceiving them into believing that their investments would double within three months. However, after collecting people’s money — which amounts to over 3,000,000,000 Rwandan Francs — the platform was dissolved, and they failed to account for the funds. Company A Ltd faced the charge of fraud only. However, its shareholders faced charges including fraud, illegally trading or exchanging money, money laundering, and forming or joining a criminal organization. The court sentenced X to six (6) years and six (6) months in prison and fined him 68,305,196 Rwandan francs; Y to one (1) year and six (6) months in prison and fined him 750,000 Rwandan francs; and Company A Ltd to a fine of 3,000,000 Rwandan francs.
4.3.1. Attractiveness for Non-Resident
Incorporation (ANRI) to ML Rwanda has taken significant steps to position itself as a business-friendly destination for non-residents and foreign-registered legal entities and legal arrangements. Key highlights include:

Regulation of TCSPs: Since 2022,
TCSPs have been registered and licensed, alongside law firms, to assist non-residents and foreign entities in forming domestic companies and branches. Non-residents can still directly register legal structures in Rwanda, facilitated by a growing network of professional service providers.
Investment Promotion: Rwanda’s
initiatives to attract foreign investors include establishing the Kigali International Financial Centre (KIFC), the “Visit Rwanda” campaign, economic zones, and participation in international forums. These efforts, coupled with private sector support, have enhanced Rwanda’s reputation

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 71 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT as a destination for specialized legal structure formation. Additionally, the law on Investment promotion and facilitation of 2021 was enacted and support foreign investment.

Political and Economic Stability:
Rwanda ranks highly for political stability, rule of law, and governance, with a corruption perception score of 53 in the 2023 CPI. The economy grew by 8.2% in 2023, supported by stable currency performance, fostering investor confidence.
Beneficial Ownership Framework:
Legal and regulatory frameworks now require all registered entities to disclose beneficial ownership information, aligning with global standards. This strengthens transparency and minimizes ML risks.
Tax Competitiveness: Rwanda has
reduced the corporate income tax rate to 28%, with a goal of 20% in the medium term. Preferential rates, including a 0% tax for international headquarters, enhance the country’s investment attractiveness.
Asset Protection: Rwanda provides
strong legal protections for foreign investors, including clear processes for acquiring land and safeguarding intellectual property rights. These frameworks ensure robust asset protection, further boosting investor confidence.
4.3.2. Strengths of national mitigation
measures
In Rwanda, the existing mitigation measures against abuse of legal structures are deemed effective overall. However, there are certain areas that need improvement to reduce the potential for abuse of legal structures. Rwanda has a robust regulatory and supervisory system for TCSPs and legal persons supported by strong legal frameworks and enforcement actions. TCSPs are licensed and supervised by the National Bank of Rwanda (NBR). As of June 2024, there are 9 registered TCSPs. Additionally, other intermediaries involved in the formation or administration of legal entities are subjected to comply with AML/ CFT requirements, including conducting CDD and filling of STRs. Rwanda has established measures to ensure compliance with BO reporting obligations, all legal persons and arrangements are required to register and regularly update their information. While enforcement actions have been taken, no criminal sanctions have been imposed to non-compliant legal structures. There is a central register for beneficial ownership information, however, only competent authorities have direct access, limiting the ability of reporting entities to conduct effective due diligence and verify the identity of their clients. The country prohibits bearer shares, and there are requirements for the disclosure of beneficial owners, including the obligation for nominee directors or shareholders to disclose their nominator. Despite these measures, the effectiveness of enhanced CDD and BO identification and verification remains inconsistent and requires improvement.

Entity Risk Assessment
The risk score for each legal structure was obtained based on the following factors:
Attractiveness for Non-Resident Use; Cross-Border Risk Exposure; Ease, speed and cost of formation; Existence of ML/ TF typologies; Incidence in analysed ML/ TF cases; Quality & Accessibility of BO Information; Quality and accessibility of Basic Information; Effectiveness of International Cooperation with Foreign Jurisdiction and Scale.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 72 The assessment covered domestic and foreign legal structures. Some legal structures were not included in the entity risk assessment due to factors such as their limited or no registrations, lack of any identified money ML incidents, or because they are newly introduced in the country.
4.4.1. Domestic legal structures
Domestic legal structures assessed were Private Companies Limited by Shares, Public Limited Companies, Companies Limited by Shares and Guarantee, Community Benefit Companies (CBC) and Companies limited by guarantee. The following charts illustrate ML risk scores:
Figure 12: ML Risk Score-Domestic legal structure
The assessment highlighted the overall ML risk score for private companies limited by shares as Medium-Low. This rating is attributed to several factors as analysed hereinafter. Private companies limited by shares make up the majority of registered legal structures, primarily due to the limited liability for shareholders. These companies often have significant financial flows and assets, operating mainly in high-income and regulated sectors like hospitality, mining, transportation, real estate, construction, energy, and oil. Registry data indicates that most of these companies are based in Rwanda and focus on domestic operations, though some of them engage also in activities across other jurisdictions. Foreign company subsidiaries often opt for private companies limited by shares due to the tax and non-tax incentives offered under Rwanda’s investment law, making this structure especially appealing to non-residents. While the company registry provides comprehensive basic information on these companies, the accuracy and quality of the data are considered moderate, as companies do not consistently update their records.
4.4.2. Foreign legal structures
The foreign-created legal structures assessed were only foreign companies. The assessment highlighted overall ML

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 73 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT risk score for Foreign companies (Limited Liability Companies) as Medium-Low. This rating is attributed to several factors as analysed hereinafter.
Figure 13:ML Risk score-foreign registered legal structure
The number of foreign registered legal structures in Rwanda has been increasing over the years. This growth is primarily attributed to key factors such as attractive tax and non-tax incentives, strong rule of law, political stability, robust economic growth, Rwanda’s high ranking in ease of doing business and others. The following are the top 10 jurisdictions where foreign companies registered in Rwanda are incorporated:
Figure 14: Distribution of foreign companies registered in Rwanda
Source: RDB

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 74 Although the number of foreign companies registered in Rwanda is lower than that of private limited companies, these entities possess substantial assets and high financial flows. They are typically involved in sectors of information technology and computer services, construction, financial services, transportation, and mining and quarrying. As a result, they are considered to attract a higher risk of ML. The findings of the entity risk assessment revealed that while all legal structures are susceptible to potential abuse for ML, foreign companies and private companies limited by shares were specifically rated as “medium-low” risk. These company types are notably more likely to be exploited for ML purposes compared to other legal structures, which were assessed as less vulnerable. As such, this should prompt the implementation of control mechanisms on foreign companies and private companies limited by shares, ensuring they are not misused for illicit activities. Moreover, analysis of ML incidents revealed that these company types appeared in cases.
5. Recommended actions
The following are key recommended actions to be implemented to mitigate the risks identified in the legal persons and legal arrangements:

Organise a comprehensive training
and awareness Programs to all relevant authorities on legal structures ML potential abuse;
Explore the feasibility of providing
access to BO basic information to all reporting persons
Increase compliance with BO
Reporting obligations: conduct further awareness activities targeting legal structures, corporate service providers, and the public on BO obligations and enforce legal sanctions to improve compliance
Applying Risk-Based approach and
consider enhanced verification measures for legal structures to address quality of CDD
Applying strong control mechanisms
on foreign companies and private companies limited by shares, to ensure that they are not misused for ML activities.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 75 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT VIRTUAL ASSETS AND VIRTUAL ASSETS SERVICE PROVIDERS ML RISK ASSESSEMENT 5

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 76

Introduction
A virtual Asset (VA) is defined as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes.18 Virtual assets do not include digital representations of fiat currencies, Central Bank Digital Currency (CBDC) and securities. Virtual assets include:
digital currencies, stable coins, or cryptocurrencies. The term Virtual Asset Service Providers (VASPs) refers to any natural or legal person who is, as a business, conducts one or more of the following activities or operations for or on behalf of another natural or legal person: exchange between virtual assets and fiat currencies; exchange between one or more forms of virtual assets; transfer of virtual assets; safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.19 Rwanda conducted a national risk assessment on ML/TF associated with VAs and VASPs in accordance e with FATF Recommendation 15. The assessment identified four of the most commonly traded virtual assets:
USDT, Bitcoin, USDC, and Ether. Among these, USDT as the most prominent, as highlighted in the perception survey, where 63.9% of the respondents indicated having invested in it. Additionally, several other altcoins, such as XRP, SOL, Doge, Litecoin, and others, are also used to some extent. The risk assessment identified 9 VASPs commonly accessed in Rwanda, offering a range of services. These VASPs engage in one or more virtual asset related activities, including virtual asset exchanges, virtual asset broking/payment processing, and virtual asset investment.
The Overall VA/VASPs Risk
This section analyses Rwanda’s VA sector, covering VASPs, the services they offer, and associated risks. It assesses inherent risks, including threats and vulnerabilities, and evaluates mitigation strategies, resulting in a summary of residual risks.

Drivers for Virtual asset adoption in
Rwanda
Despite domestic restrictions on VAs, their adoption in Rwanda is growing, particularly among younger generations attracted to block-chain technology. Social media has significantly contributed to the growing interest in VAs, mainly for investment purposes. However, the absence of regulation and public warnings from the Central Bank have led many Rwandans to perceive VAs as high-risk and opt for alternative investments. For those who engage with VAs, the primary motivator is the potential for high returns on investment. The chart below shows the reasons for investing in VAs as highlighted by the respondents:
18FATF General Glossary.
19Ibid.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 77 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT
Figure 15: Reasons for adopting/engaging in virtual assets
Figure above indicates that reasons for trading VA are dominated by investment, high
productivity, and low cost with instant settlement. However, the adoption rates are significantly lower than non-adoption rates as reflected in the reasons in the figure below:
Figure 16: Reasons for non-adoption of virtual assets

Types of VASPs Operating in Rwanda
The assessment identified one decentralized exchange that is Paxfull and eight centralized including cryptoexchange platforms namely Leaf Fintech, MEXC, Trust Wallet, Kraken, Kucoin, Bybit, Yellow Card, and Binance, accessible in Rwanda for acquiring and trading crypto assets. Most of the identified VASPs facilitate peerto-peer transactions allowing traders to engage directly with one another, without the need for centralized third party. During the perception survey 69% of respondents emphasized that the VASPs accessed in Rwanda also operate in multiple countries.
Overall exposure of VA/VASPs to ML/
TF risks

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 78 The overall exposure of Rwanda to ML/TF risks arising from VA and VASPs was rated Medium Low, as a result of Low threat and Medium-Low vulnerability.
Table 6:overall rating ML/TF risks
3. VA and VASPs threat assessment
The threat assessment examined the nature and the exposure of VAs/ VASPs in relation to ML predicate offences. The threat analysis considered domestic predicate offences involving VA&VASPs as well as their exposure to foreign predicates offences. The assessment highlighted that VAs related cases in Rwanda were fraud and forgery usually characterized by fraudulent investment schemes, fake coin offerings and fake exchanges using imposter websites. Within the assessment period, 44 Suspicious Transaction Reports (STRs) related to VAs were submitted, 24 STRs originated from Mobile Money Service Providers, while 20 were reported by banks. Note that 6 of the reported STRs implicated foreign jurisdictions. Investigations were conducted on 35 fraud cases related to VAs20. Only one case was related to ML and it is still under investigation. Below are some of the fraud cases. The threat of ML/TF involving virtual assets 20Ten cases were prosecuted, leading to one ML conviction (at first instance), currently under appeal and 6 fraud conviction The remaining cases are still pending. The offenses involved fraud and money laundering, with no terrorist financing.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 79 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT VAs is a growing global concern, driven by factors such as anonymity, pseudonymity, borderless transactions, and limited regulatory frameworks. Financial sector players in Rwanda remain cautious toward VAs, abstaining from VA-related activities or investments and not developing technology for the VA ecosystem, in line with a cautionary notice from the National Bank of Rwanda (NBR). This caution has limited regulated Case Box: Fraudulent Investment Scheme Involving VAs in Rwanda In 2024, investigation was initiated against a company on allegation of fraud using someone else’s property without permission To join this company, the investor had to be given a link to access it and promptly after registration had to buy a package. These packages include packages worth 25 USDT, 75 USDT, and 225 USDT. And the investor should be a Rwandan citizen, live in Rwanda, and use the Rwandan network. The investor had to choose one package out of the three, pay for it, and become an employee of Company, then given tasks to perform, mainly involving operating a robot that does crypto trading and earn according to the package bought daily. The 25 USDT package earns 0.7 USDT, the 75 USDT package earns 2.4 USDT, and the 225 USDT package earns 7.7 USDT. The company closed the applications with people’s money. The Central Bank has consistently maintained their stance advising Rwandans to refrain from decentralized cryptocurrencies, emphasizing that they are not accepted in the financial system and lack supervision by any regulatory entity. Case Box : Fake coins Disguised as crypto A Company Ltd, created a Cryptocurrency Platform accessed on a created website through a marketing platform (YouTube channel), the investors were promised to get their investment multiplied by two every three months, however later the website system was closed and none have access to his/her invested amount. More than 250 persons were victims of fraud and theft by deception that business the Company Ltd management were arrested together with another involved suspect from another company. Through that social media channels, it was created a group whatsup and massive networking within inner circles; most victims were required to join the business with investments from each person ranging from $50, $100, $500, $1000, $3000, $5000and up to $10.000. financial service providers interactions with VAs and VASPs. Nonetheless, 84% of sector respondents recognized that their financial products and services could potentially support VA and VASP activities. However, the assessment in Rwanda found no reported cases of ML or TF related to VAs, based on available reports and open sources. As a result, the overall threat posed by VAs and VASPs for ML/TF activities in Rwanda was rated Low.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 80
4. VA&VASPs sector Vulnerability
assessment
All the identified VASPs in Rwanda operate without registration nor licensing, as there is no regulatory framework governing the activities of VAs and VASPs in the country. Additionally, there is inadequate skills on VAs and VASPs for LEAs, regulators of financial sectors and financial service providers.

The overall ML vulnerability rating for
VAs was rated Medium-Low, reflecting the lack of regulatory infrastructure and licensing provisions, the limited capacity in identifying, investigating, and prosecuting offences involving VA, coupled with a very low adoption rate (Rwanda ranks 142nd out of 155 countries according to the 2023 Chainalysis report). The overall TF vulnerability Medium low General Public Perception Survey The general public have shown interest in regulating crypto asset business in Rwanda, 50% of participants emphasized on allowing and regulating crypto business and propose the framework to include both VAs and VASPs.
Figure 17: Regulatory responses to VA activities in Rwanda
Overall, 89.5 % of the respondents, recommended the regulatory frameworks to cover both VAs and VASPs.

Recommendations
As global investor interest in Rwanda increases, the unregulated status of VAs presents risks, including Ponzi schemes and scams. This highlights the need for heightened vigilance to prevent the misuse of financial services by virtual asset entities. The following are key recommended actions to mitigate those risks:

To comply with FATF Recommendation
15, Rwanda should designate VASPs as reporting entities within its AML/ CFT frameworks.
To establish legal framework governing
VA&VASPs in Rwanda. Meanwhile, VASPs should be registered for AML/ CFT compliance and supervision
To conduct training and awareness
programs related to VA&VASPs to LEAs, regulators and other competent authorities
To develop a blockchain national
policy to boost innovation and attract tech-professionals, while advising consumers to be vigilant about scams and seek financial advice when engaging with virtual assets.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 81 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT FINANCIAL INCLUSION PRODUCT RISK ASSESSMENT 6

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 82

Introduction
The purpose of this risk assessment is to evaluate the ML/TF risks associated with financial inclusion products available in Rwanda. This involves identifying the unique features of these products, assessing their associated risks, and aligning with national priorities in applying AML/CFT measures. Additionally, the assessment evaluates the applicability of AML/CFT principles to these financial products. The findings from this assessment will inform the development of national policies aligned with the objectives of the National Financial Inclusion Strategy. The assessment of the ML/TF for financial inclusion products targeted specific product features, the overall ML/TF risk environment and indicates initial risk levels for each product. It also offers guidance on managing high risks products.
6.1.1 Financial inclusion overview
Rwanda Vision 2050 and National Strategy for Transformation (NST-2) aim to position the country as a leading financial services hub in Africa. To support this vision, Rwanda adopted Fintech Policy (2022–2027) to promote a robust fintech ecosystem, contributing to a cashless society and inclusive financial access. Additionally, the establishment of reliable identification infrastructure such as the National Identity Card and the company registry facilitates due diligence, boosts financial inclusion, and improved access to financial services. Moreover, Rwanda has adopted the National Financial Inclusion Strategy 2022-2026. This Strategy defines financial inclusion as the ability of individuals and businesses to effectively access a wide range of useful and affordable financial products and services that meet their needs, offered by both formal and informal institutions, and delivered in a responsible and sustainable manner. The strategy aims to expand access to more advanced financial products for those with limited access. The 2024 Rwanda Finscope survey reveals that, 96% of Rwandan adults (7.8 million people) are financially included. This only leaves a mere 4% (358,000) who rely on on informal mechanisms.
Figure 18: Overview of financial products/services (%)
Source: Finscope 2024 survey report.

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Formally served refers to individuals
or businesses using financial services from regulated institutions, such as banks, insurers, e-money issuers, and agents of formal financial service providers. Consumers often use formal services alongside informal ones.
Informally served indicates individuals
or businesses using financial services from unregulated institutions, such as moneylenders, tontines, and community-based groups. These providers may or may not have official recognition.
Excluded refers to individuals or
businesses who rely solely on personal relationships to manage their financial needs, without access to formal financial institutions or informal mechanisms, such as saving at home or borrowing from family and friends.
6.1.2. Factors influencing Financial
Inclusion in Rwanda
The FATF emphasizes that financial exclusion occurs when individuals lack access to affordable formal financial services, forcing them to rely on informal providers. It stresses that improving financial inclusion among underserved groups strengthens AML/CFT measures. In this regard, Rwanda has implemented frameworks to promote financial inclusion. Regulatory sandboxes introduced by the National Bank of Rwanda (BNR) and the Capital Market Authority (CMA) foster fintech innovation. Mobile money services provide accessible financial services like cash in/cash out, money transfers, bill payments, and government transactions. Through extensive agent network, banks and mobile money providers reach underserved and remote areas. Banks support financial inclusion by offering tailored products and digital solutions, while Umurenge SACCOs, established in 2008, drive rural savings and provide loans, especially to those with irregular incomes. Regulation No 65/04/2023 for non-deposit taking financial service providers enables services like peer-to-peer lending, credit guarantees, and mortgage finance, expanding access to credit. Micro-insurance, particularly through partnerships with mobile operators and fintech’s, offers affordable risk protection for low-income populations. Pension schemes like the EJOHEZA long-term saving scheme, launched by the government, encourages voluntary savings for salaried and self-employed individuals, providing a secure future for diverse population segments, including children. To promote and ensure financial inclusion, there is a strong public awareness campaign encouraging the adoption of a cashless economy.

Financial inclusion products risk
assessment
6.2.1. General AML/CFT control measures
The assessment focused on the market entry controls, the establishment of monitoring mechanisms, policies, procedures and guidelines to examine and/or monitor risks arising from financial inclusion products, geographical-country risk and AML/CFT training and awareness programs. Financial inclusion products, in Rwanda, are offered by regulated institutions. Before entering the sector, the market entry control mechanisms such as “Fit and Proper” test are applied to the providers of financial inclusion products. They are also required to comply with the AML-CFT requirements, including CDD, detection and reporting of suspicious transaction requirement.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 84 However, local legislation does not provide a formal definition of financial inclusion products, and there are no specific guidelines outlining KYC requirements for these products.
6.2.2. Financial inclusion product threat
The financial inclusion product threat was rated Low due to absence of suspicious financial crime cases involving financial inclusion products, the low volume and value of transactions, income levels, thresholds, and KYC requirements. Bank savings, microloans, micro-insurance, and pensions assessed were deemed not exposed to ML/TF threat. On the other hand, mobile money and agency banking exposure to ML/TF threat was rated medium due to high transaction thresholds, cross-border transactions, agent usage, their involvement in fraud cases and low understanding of AML/ CFT obligations among their agents and the use of agents in itself further exposes them to ML/TF abuse.
6.2.3. Financial inclusion product
vulnerability
Financial inclusion in Rwanda is guided by the National Financial Inclusion Strategy, underpinned by regulatory frameworks. Key stakeholders in Rwanda’s financial inclusion ecosystem include banks, mobile money operators, other financial service providers, insurers, pension providers, regulators, public institutions and various development partners. The financial inclusion products in the banking and other financial institutions sector are mainly savings, credit and payments channels and from the assessment undertaken, financial inclusion products fall in either of the following categories: (i) deposit and loan products; (ii) Money remittances; (iii) mobile money and remittances; (iv) Informal village savings and loan associations; and (vi) Insurance and pension funds.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 85 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT
Table 7: Product features and vulnerability
Product Product features and vulnerability Vulnerability rating Bank Savings Banks, mobile money and other deposit-taking financial institutions have expanded the functionalities of regular savings and introduced new methods to facilitate saving through agents’ networks. However, have inadequate knowledge on AML/CFT requirements. Low Microloans The value and number of loan transactions are limited, with most products having threshold limits for both the value and frequency of transactions. Additionally, the product features are clearly defined, and risk mitigation measures are in place. Anonymous use of the product is not permitted, as institutions require customer identification prior to onboarding Low Micro insurance Microinsurance products do not permit a cross-border transactions, are not offered to non-residents, and anonymous use of the product is not possible. Low Remittance Services Thresholds have been set for both the amount of remittance and on the number of transactions. Crossborder transactions with high-risk jurisdictions are very unlikely due to rigorous scrutiny. Low Mobile money Customers can use mobile phones to transfer funds between devices, regardless of the service provider, and also between mobile phones and bank accounts. However, cross-border transactions and the use of agents may increase the ML/TF risk. The low level of AML-CFT understanding among agent users increases the product’s vulnerability to ML/TF abuse. Medium Agent banking The high-value threshold, combined with the low level of AML-CFT understanding among agent users and inadequate knowledge on regulatory requirements, makes this service vulnerable to ML/TF abuse. Medium The analysis of financial inclusion products revealed that most products have limits on transaction value and frequency. In addition, service providers ensure compliance with AML/CFT standards, including customer identification processes and screening processes and they provide regular training to agents and users. Hence, financial inclusion product vulnerability was rated Medium-Low. The findings from the perception survey rated Mobile money service as highly vulnerable to ML/TF, due to the convenience it offers to the users. This derives from its non-face-to-face

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 86 customers, wide geographical access, cross-border transactions, and the use of agents.
3. The overall ML/TF risk environment
The assessment revealed that the overall financial inclusion products exposure to ML and TF risk was rated Medium-Low, owing to the existing legal frameworks that promote financial inclusion and AML/ CFT compliance. The banking sector and mobile money operators are central to financial inclusion, serving as the primary financial service providers for a wide range of economic agents. They play a central role in facilitating transactions across other sub-sectors, including insurance, securities, and pensions. The Central Bank conducts risk-based supervision to ensure compliance and mitigate risks. However, the assessment highlights that stringent KYC requirements pose a major challenge for providing financial inclusion products. Many of these products do not have the option to apply simplified due diligence measures on low risk customers, lack of credit scoring alternatives and the lack of awareness in low-income segments.
4. Recommendations
Key recommended actions for enhancing financial inclusion and mitigate associate ML/TF Risks include the following:

Update and approve the financial
inclusion National Strategy
Define financial inclusion product to
provide guidance to reporting persons
Promote the application of Risk-based
due diligence measures — Regulators and Supervisors should allow agents to open a full operational account for low-income earners classified as low risk customers and apply simplified KYC requirements for FI products assessed as low risk
Conduct ML/TF risk reviews of financial
inclusion products
Organize capacity building and raising
awareness activities on AML/CFT Requirements to the facilitators of financial inclusion.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 87 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT TAX CRIMES ML RISK ASSESSMENT 7

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 88

Introduction
Rwanda’s 2018 National Risk Assessment (NRA) on Money Laundering and Terrorism Financing (ML/TF) identified notable vulnerabilities with tax offenses rated as a Medium-Low due to limited monitoring and compliance. Subsequent to the publication of Rwanda’s 2018 National Risk Assessment (NRA), Rwanda adopted a risk-based approach, implementing initiatives including manning CCTV cameras at strategic borders, deploying the surveillance police, and whistle blower programs to support tax fraud reporting. The assessment conducted aimed at evaluating current ML risk related to tax crimes21 by analysing threats and vulnerabilities
Tax system in Rwanda
Rwanda’s taxation system emphasizes self-assessment, voluntary disclosure, and fostering accurate tax reporting by promoting honesty among taxpayers. However, those who evade taxes are subject to both administrative and criminal penalties. To enhance tax compliance and boost revenue collection, Rwanda has introduced several initiatives focused on modernizing tax administration, expanding the tax base, and utilizing technology for greater efficiency. These efforts include the implementation of digital tax services through the E-tax system, the use of electronic billing machines (EBM), the deployment of business intelligence systems, and the introduction of cargo tracking systems, all aimed at improving tax compliance and streamlining processes. The initiatives and systems in place highlight the country’s commitment to modernization and boosting tax revenue, which reached 15% of GDP and contributed 50.8% to the national budget in the 2022/2023 fiscal year as illustrated in the following figure 21Under Rwanda context tax crime means tax evasion.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 89 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT
Figure 19:Contribution of tax to GDP and the National Budget
Source: RRA Annual activity report 2022/2023 The notable influence of taxes on GDP and the national budget is reflected in the steady increase in net revenue collections, which has closely aligned with the overall growth of the economy as shown in figure below
Figure 20:Revenue collections and contribution to the national treasury
Source: Rwanda: RRA Tax statistics, Fiscal year 2022/2023, 6th Edition The figure above shows contestant increase in revenue collections and contribution to the national treasury from 2016 up to 2022. To further promote transparency in the tax system and strengthen tax policy, various initiatives have been introduced, including the signing of agreements with the global tax community and active participation in tax forums. The agreements include:
Double Taxation Agreements (DTAs) Rwanda signed Double Taxation Avoidance Agreements (DTAAs) with countries like South Africa, Belgium, Mauritius, Singapore, Turkey and the UAE to prevent double taxation and boost international trade. Efforts to expand these agreements continue with other countries in Africa, Asia, and Europe.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 90 East African Community (EAC) Tax Agreements As an East African Community (EAC) member, Rwanda has signed agreements to harmonize tax policies, customs procedures and VAT regulations with other member states. Global Forum on Transparency and Exchange of Information for Tax Purposes Rwanda, as a member of the Global Forum on Transparency, follows international tax transparency standards enabling information sharing through Exchange of information on request (EOIR) & Automatic exchange of information (AEOI) to combat cross-border tax evasion and fraud. African Tax Administration Forum (ATAF) Rwanda, as a member of the African Tax Administration Forum (ATAF), collaborates with African tax authorities to enhance tax transparency, combat illicit financial flows and strengthen tax policy frameworks. Through ATAF, Rwanda aligns its tax administration with international best practices. Other initiatives involve legal frameworks aimed at improving tax compliance while curbing tax evasion and fraudulent activities. According to Rwandan law (Articles 90 and 91 of Law No. 020/2023 of 31/03/2023 on tax procedures), offenses such as tax evasion and falsified VAT refund claims are prohibited and subject to both administrative and criminal penalties.
3. The Tax Crimes and Proceeds Threat
Assessment
The Tax Crimes and proceeds ML threat assessment evaluated the scale through determining the magnitude of known tax crimes, proceeds and frequency in Rwanda, their connection to money laundering and evaluated the impact of tax evasion on macroeconomic indicators (Estimated GDP).
7.3.1 The magnitude of tax crime threat in
terms of incidences and proceeds The assessment analysed enforcement data considering the frequencies of tax crimes and proceeds involved as well as their impact on GDP.
Figure 24: Determining the scale of tax crime threats
Source: RRA

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 91 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT The above figure illustrates the number of tax crimes investigated, the proceed involved and estimated impact to GDP. From 2019 to 2024, 116 tax evasion cases totalling 23 billion Rwandan francs were identified and investigated, 63 prosecuted resulting into 36 convictions involving FRW 432,189,137. The analysis of these cases shows that all of them have been committed domestically, there was no international nexus. The previous NRA of 2018 had identified 31 tax evasion cases with worth 18 billion Rwandan francs. The increase in number of identified cases from 31 to 116, identified in the current national risk assessment is due to effective systems that identify tax evasion cases. However, it’s also worth noting that, the proportion of involved proceeds tremendously reduced compared to the previous NRA tax evasion proceeds.
7.3.2 The threat assessment on revenue
stream
The analysis focused on specific revenue streams—PIT, CIT, payroll tax, and VAT— highlighting areas where tax crimes are most prevalent, ensuring a logical flow from broader context to detailed findings.
Figure 25: The heat map visuals level of tax crime threat among the revenue streams
From the analysis of both known and perceived crimes, VAT incidences and proceeds involved (70% of total liability and incidence) and this revenue stream emerge to pose higher threat than other revenue streams. Subsequently, the heat map identifies both known and perceived VAT crimes to possess a medium threat compared to other revenue streams as illustrated in
figure below.
7.3.3 Assessing Money Laundering Threat
The analysis of money laundering threats examined the link between offshore money laundering and offshore tax crimes as well as incidence of proceeds in money laundering cases connected to the tax crimes. The analysis reviewed both known and perceived incoming and outgoing activities as shown in the heat map below.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 92
Figure 26: Heat map data visual showing money laundering threat level
From the heat map above, there’s no threat of money laundering resulting from tax crimes. The analysis of law enforcement data indicated no money laundering case related to tax crimes either identified or investigated. however, the perception is that tax crime can lead to money laundering.
7.3.4 Business sectors at risk of tax crime
The analysis of tax crime typologies indicated wholesale, retail, and construction sectors as the most vulnerable to tax evasion. Case study: Tax evasion case A corporation (Z Company Ltd) was transiting goods through Rwanda from Neighbouring Country A destined to Neighbouring Country B. Official declarations of transiting goods were done under normal procedures given to cross border transit goods (T1) under declaration of 1M7 where the transiting goods are put Seal until the final destination where tax authority verifies and remove the seal. By Contrast the vehicle in transit manoeuvred and tried to evade by dumping goods through forging documents to accompany the goods for local consumption making declaration of 1M4. Breaking seal without consent of tax authority is an offence. The vehicle was surveyed and tracked by tax authority. Nature of tax crime: Unaccustomed goods (tax evasion in customs) Subsequently, goods were confiscated and auctioned and accomplices criminalized. Amount involved: Rwf 49,220,084.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 93 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT The findings from the general tax crimes and proceeds threat assessment indicate that the overall threat of tax crime to ML is assessed medium
4. Vulnerability assessment
Addressing tax evasion requires evaluating legal strength, tax authority capacity, technological use, international cooperation and procedures that detect and prevent offenses. Domestic Tax Vulnerability assessment aims to identify and evaluate the weaknesses within the tax systems framework that could be exploited for tax-related offenses. Assessing the maturity and effectiveness of a country’s legal, institutional and operational frameworks. The domestic vulnerability was assessed using the prevailing tax laws, regulations and guidelines and legal instruments.

Legal framework Assessment
The legal framework sets the foundation for tax administration and assess its adequacy and alignment with best practices by examining laws and regulations governing tax collection, enforcement, and penalties to ensure they are clear, consistent, and comprehensive. Those legal instruments are in place and they are updated regularly to enhance tax compliance. However, the implementation is still having some gaps.
Institutional framework Assessment
Rwanda Revenue Authority was established and empowered to ensure transparency and accountability and integrity of tax system. In its operations, it assesses tax abuse, monitors the implementation of tax policies, laws and procedures against best practices and works hand in hand with relevant authorities. However, there is need to improve and capacitate staff who examine tax offenses, need to improve tax systems for effective detection of tax crimes.
Operational areas vulnerable to tax
evasion
The vulnerability assessment identified operational areas of transfer pricing, underreporting, and non-filing as effective functional areas, while falsehood, obstruction, and offshore schemes emerged as particularly vulnerable areas requiring greater focus. The assessment rated the tax crime ML vulnerability medium-low.

Conclusion
The findings from the Tax Crime threat and vulnerability assessment subsequently indicated that the current tax system face a medium level risk derived from medium low vulnerability and medium threat.
Recommendations

Tackling tax offenses is essential
for a fair tax system, better revenue collection, and public trust. Despite progress in managing vulnerabilities, more work is needed. Hence, the following are key recommended actions:
Strengthening Tax Enforcement
through enhancing the institutional capacity in combating tax evasion
Implement sector-specific
interventions in high-risk areas
Educate taxpayers on the importance
of compliance and the consequences of tax evasion.
Strengthening collaboration with both
international and local partners to address cross-border tax evasion.
Keep improving systems to always
detect and identify tax crime cases

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 94 NON-PROFIT ORGANISATION TERRORIST FINANCING RISK ASSESSMENT 8

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Introduction
The non-profit sector is a vital contributor to society and the global economy, not only in Rwanda but worldwide. It provides essential services and functions that improve the quality of life for many, often in challenging and dire circumstances. According to the Financial Action Task Force (FATF), an Non-Profit Organization(NPO) is defined as any legal person, arrangement, or organization primarily engaged in raising or disbursing funds for charitable, religious, cultural, educational, social, or fraternal purposes, or for carrying out other types of “good works.” This assessment was conducted to identify which subset of organizations that fall within the FATF definition of NPO, identify the features and types of NPOs which by virtue of their activities or characteristics, are likely to be at risk of terrorist financing abuse and to identify the nature of threats posed by terrorist entities to the NPOs which are at risk as well as how terrorist actors can abuse those NPOs.
Registered NPOs subsets in Rwanda
In Rwanda, NPOs address a wide range of social, economic, and humanitarian needs (charitable services) across various thematic areas, including agriculture; energy; urbanization and rural settlement; transport; environment and natural resources; private sector development; youth empowerment; financial sector development; ICT; education; health; social protection; water and sanitation; decentralization and governance; justice, reconciliation, law and order; advocacy; economic governance/ PFM; sport; culture; religious (Evangelism); socio/Fraternal purposes; and good works (Humanitarian actions). NPOs are allowed to participate in more than one among these different sectors. The assessment, noted that all NPOs intervening in below activities are not falling under FAFT definition, this includes Agriculture, Energy, urbanization and rural settlement, Transport, Private Sector development, Environmental and natural resources, advocacy, Economic governance and financial sector development while the remaining categories fall within the NPO definition as per FATF. During the assessment there were 2,366 NPOs registered in Rwanda. Out of these registered NPOs, 1,888 NPOs were found meeting the FATF NPO definition (1,089 National NGOs, 198 International NGOs, 531 Faith-Based Organizations (FBOs) and 70 Common Benefit Foundations) and 478 NPOs are not falling under FATF definition due to the nature of their works.
TF Inherent Risk in the Non-Profit
Organisations sector
The assessment evaluated the nature of the terrorist financing (TF) threat to Non-Profit Organizations and determined which NPO activities may be at risk of TF abuse.
8.3.1. Nature of the TF Threat to NPOs
The findings of the assessment indicated that NPO, due to their activities, are threatened for Terrorist Financing by the following factors:

The abuse by those who want to
promote extremist ideologies
Politically instability in neighboring
jurisdictions
Terrorist Sympathizers

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 96
8.3.2. NPO’s activities that may be at risk
of TF abuse

Alternative sources of funds (donations
in cash and religious offerings)
Cash fund-raising from anonymous
sources.
Trainings and workshops
Generally, the assessment revealed that NPO sector was at Low Risk of TF abuse. However, Faith Based Organisations were found to be more exposed to TF abuse, followed by Common Benefit Foundations and National NGOs, while International NGOs were found to be at the lowest level of TF abuse.TF abuse is mostly due to use of cash especially FBO coupled by complex control and other initiatives such as fundraisings and offerings.
Table 8: Inherent TF risk assessment
Inherent risk Assessment Rating Assessment Rating Assessment Rating Assessment Rating Input variables 1 Diversion of funds Low 0.2 Low 0.2 Low 0.2 Low 0.2 2 Affiliation with a terrorist entity Low 0.2 Low 0.2 Low 0.2 Low 0.2 3 Abuse of programming Low 0.2 Low 0.2 Medium 0.5 Low 0.2 4 Support to recruitment efforts Low 0.2 Low 0.2 Low 0.2 Low 0.2 5 False representation/Sham NPO Low 0.2 Low 0.2 Low 0.2 Low 0.2 6 Collection of funds Low 0.2 Does not exist 0.0 Low 0.2 Does not exist 0.0 7 Transfer of funds Low 0.2 Low 0.2 Low 0.2 Low 0.2 8 Expenditure of funds Low 0.2 Low 0.2 Low 0.2 Low 0.2 1 Size Large 1.0 Medium 0.5 Large 1.0 Small 0.2 2 Activity type Service 1.0 Service 1.0 Service 1.0 Service 1.0 3 Offshore/complex control structure Low 0.2 High 1.0 Low 0.2 Low 0.2 4 Level of accountability required by funding sources Low 1.0 Medium 0.5 Low 1.0 Low 1.0 5 Level of verifiability of fundraising methods Low 1.0 Medium 0.5 Low 1.0 Low 1.0 6 Level of cash transfers, valuable in-kind goods Low 0.2 Low 0.2 Medium 0.5 Low 0.2 7 Level of risk appetite Low 0.2 Low 0.2 Low 0.2 Low 0.2 8 Complexity / length of operational chains Low 0.2 Low 0.2 Low 0.2 Low 0.2 9 Reliance on transitory or informal workforce Low 0.2 Low 0.2 Low 0.2 Low 0.2 10 Level of professionalism Low 1.0 Medium 0.5 Low 1.0 Low 1.0 11 Use of cash Low 0.2 Low 0.2 Low 0.2 Low 0.2 12 Use of virtual currency Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 13 Use of informal money transfer system Low 0.2 Low 0.2 Low 0.2 Low 0.2 Summary rating 0.20 Summary rating 0.18 Summary rating 0.24 Summary rating 0.22 Summary rating 0.20 Summary rating 0.20 Summary rating 0.50 Summary rating 0.22 Summary rating 0.62 Summary rating 0.43 Summary rating 0.64 Summary rating 0.62 Threat TF Typologies Proximity to active terrorist threat

Inherent risk assessment
No
National NGOs International NGOs Faith Based Organisations Intermediary variables Common Benefit Foundation NPO Profile T HR E AT s ummary res ult (us ing an OP E N DOOR approach) INHE R E NT VULNE R ABILITY summary result Operational features Overall inherent ris k rating of c ategory of NP Os :
Methods to transfer funds Inherent vulnerability

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 97 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT As shown in the above table on inherent risk, threat level in Faith-Based Organizations was rated Medium and Low in International NGOs and National NGOs as well as Common Benefit Foundations. Additionally, the inherent vulnerability rated high in the FaithBased Organizations, National NGOs and Common Benefit Foundations while International NGOs was rated low. Overall the inherent risk was assessed Low across all NPO sector in Rwanda.
4. Evidence of TF abuse of the NPO
sector
The assessment highlighted that:

From 2019 to 2024, no Suspicious
Transaction Reports (STRs) related to TF within NPOs were submitted to the Financial Intelligence Centre (FIC). Additionally, the FIC intelligence reports did not indicate any NPO involvement in TF or terrorism cases during this period.
The assessment revealed that
there were no cases of TF/Terrorism Convictions, Prosecutions, Investigations and Intelligence involving NPOs.
No credible open-source information
or allegations surfaced regarding terrorism or TF involving NPOs.
Figure 21: Level of TF abuse of NPO
Assessment Rating Assessment Rating Assessment Rating Assessment Rating 1 Number of TF/terrorism Convictions Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 2 Number of TF/terrorism Prosecutions Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 3 Number of TF/terrorism Investigations Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 4 Number of TF/terrorism Intelligence Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 5 Number of TF/terrorism STRs Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 6 Number of TF/terrorism Allegations in credible open sources Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Does not exist 0.0 Open Door approach Summary rating 0.00 Summary rating 0.00 Summary rating 0.00 Summary rating 0.00 Common Benefit Foundation

Evidence of level of terrorist financing abuse of NPO
National NGOs Faith Based Organisations No Input variables International NGOs While TF remains a global threat, the evidence indicates that the NPO sector in Rwanda is at low risk of TF abuse.

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5. The effectiveness of mitigating
measures
The NPO sector in Rwanda is regulated and supervised by Rwanda Governance Board (RGB), an independent public institution with primary mandate to promote good governance, monitor service delivery, and regulate Non-Governmental Organizations (NGOs) and political parties in Rwanda. NPOs sector is categorized into four main groups: National Non-Governmental Organizations (NNGOs), International NonGovernmental Organizations (INGOs), Faith-Based Organizations (FBOs), and Common Benefit Foundations (CBFs), each category governed by specific legislation. National Non-Government Organizations and International NonGovernment Organizations are regulated under Law N°058/2024 of 20/06/2024, which outlines the management framework for both domestic and foreign NGOs operating in Rwanda. Common Benefit Foundations are governed by Law No 059/2021 of 14/10/2021, setting out provisions for foundations established for the public good. FaithBased Organizations (FBOs) operate under Law N°72/2018 of 31/08/2018, which determines the organization and functioning of faith-based Organizations. Through its regulatory framework, RGB conducts monitoring, and supervision aiming to enhance accountability, ensure transparency and compliance, and prevent the misuse or exploitation of NPOs, thereby strengthening the integrity of the sector in Rwanda. Rwanda 2nd round of MER 2024 noted that the NPO sector has not been assessed for purposes of determining those NPOs at risk of TF abuse and concluded the TF risk from NPOs are not well understood. Additionally, assessment highlighted number of deficiencies including:
diversion of funds, lack of comprehensive due diligence for donors and supports, lack of sanctions screening mechanism, inadequate monitoring of NPOs activities and inadequate outreach and awareness program to NPOs.
Table 9: Mitigating measures
Mitigating measures ASSESSMENT RATING RATING ASSESSMENT RATING RATING ASSESSMENT RATING RATING ASSESSMENT RATING RATING GENERAL INPUT VARIABLES 1 Quality of outreach and education Medium 0.5 Medium 0.5 Medium 0.5 Medium 0.5 2 Quality of NPO policies Medium 0.5 Medium 0.5 Medium 0.5 Medium 0.5 3 Scope of registration of FATF NPOs Medium 0.5 Medium 0.5 Medium 0.5 Medium 0.5 4 Availability and accessibility of accurate NPO information Medium 0.5 Medium 0.5 Medium 0.5 Medium 0.5 5 Avoiding disruption of NPO activities High 1.0 High 1.0 High 1.0 High 1.0 6 Quality of Governance Medium 0.5 Medium 0.5 Low 0.2 Medium 0.5 7 Quality of Financial management Low 0.2 Medium 0.5 Low 0.2 Medium 0.5 8 Quality of Project management Low 0.2 Medium 0.5 Low 0.2 Medium 0.5 9 Quality of staff vetting and oversight Low 0.2 Medium 0.5 Low 0.2 Low 0.2 10 Level of commitment to ethics and transparency Low 0.2 Medium 0.5 Low 0.2 Medium 0.5 11 Level of self-regulation (incl. implementation) Low 0.2 Medium 0.5 Low 0.2 Low 0.2 Overall mitigating meas ures rating of c ategory of NP Os : Summary rating 0.47 Summary rating 0.58 Summary rating 0.43 Summary rating 0.54 Common Benefit Foundations
4. Mitigating measures assessment
International NGOs Faith Based Organisations Government measures NPO measures Inter media ry Variab No National NGOs

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Figure 22:Overall mitigating measures in NPO
Overall rating per NPO Category Indicators National NGOs International NGOs Faith Based Organisations Common Benefit Foundations Ratings Inherent Risk Low (0.20) Low(0.18) Low(0.24) Low(0.22) Evidence of the level of TF abuse Does not exist (0.0) Does not exist (0.0) Does not exist (0.0) Does not exist (0.0) Quality of Mitigating measures Low (0.47) Medium(0.58) Low (0.43) Medium(0.54) The overall mitigating measures in NPOs were rated Medium. This is derived from the International NGOs and Common Benefit Foundations rated medium and the National NGOs and Faith Based Organizations were rated Low
6. Overall NPOs RISK assessment
The assessment revealed that the overall terrorist financing (TF) inherent risk in Non-Profit Organization (NPO) sector was rated Low. The TF threat was rated Low while inherent vulnerability across the sector was rated Medium. In addition, the mitigating measures were rated Medium. Hence, TF risk in NPOs is Medium Low.

The assessment highlighted the
following key challenges and weaknesses
Some NPOs have limited
understanding of terrorism financing risks and their Counter Terrorist Financing obligations;
Insufficient capacity to conduct due
diligence on funding sources and donors;
Some NPOs were found to be using
cash in hand instead of using bank accounts in conducting financial transactions.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 100

Some NPOs were found to be
reallocating their budget to unplanned activities which would otherwise lead this budget into the hands of terrorists.

Recommendations
Key recommended actions include the following:

Apply Risk Based Approach (RBA) in
AML/CFT monitoring and supervision of NPOs
The regulator should establish the
procedures to approve all needed NPO budget reallocation/diversion and enhance budget implementation through monitoring and inspections
NPOs to establish sound procedures
to approve all needed budget reallocation/diversion and enhance budget implementation.
NPOs should conduct due diligence
on funders and donors before entering into relationship
Enhance outreach and engagement
with the NPO sector to raise awareness of TF abuse within the sector.
Ensure that all transactions are
conducted via regulated financial and payment channels.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 101 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT ENVIRONMENTAL AND NATURAL RESOURCE CRIMES RISK ASSESSMENT 9

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 102

Introduction
The Environmental and Natural Resource Crimes Risk Assessment seeks to identify key threats and vulnerabilities within the sector, while providing strategic recommendations to strengthen regulatory controls, prevent environmental crimes, and effectively tackle the risks of associated money laundering. The environmental sector has evolved due to human activities, technological changes, and shifting land use, contributing to environmental degradation and crime. The sector plays a crucial role in Rwanda’s economy, promoting sustainable resource use and environmental stewardship. Rwanda’s Constitution (Article 22) mandates the state to provide a clean, healthy environment and highlights the duty of all citizens to protect it (Article 53). The Ministry of Environment (MoE) oversees Rwanda’s environmental protection and sustainable management of resources, supported by various agencies. Wildlife crimes and offenses in forestry, fisheries, pollution, and mining are investigated, prosecuted, and penalized. Violations such as illegal plastic use and buffer zone breaches also face legal consequences.
Environmental and natural
resources threat assessment Natural resources in Rwanda, including land, water, forests, mines, and geology are under the Ministry of Environment(MoE). The Ministry is responsible for among others; coordinating the environment and Natural Resources sector aiming to protect green spaces and climate resilience while utilising natural resources optimally. The threat assessment considered the rate of environmental crimes investigated, prosecuted and analysed the amount of money involved and recovered. During the assessment period, 18 wildlife crime cases were investigated involving illegal hunting, selling, injuring, or killing protected animal species. There were 16 cases that were prosecuted with 10 convictions. At the time of the assessment, 6 cases were still pending in courts, 2 were closed by the prosecution while other 2 were acquitted. The confiscation was
291.5 kgs of ivory worth Frw 135,064,800.
In addition, other administrative fines and non-criminal actions were taken for various sector offenses. No case of ML in the sector was investigated.
Figure 23: Criminal sanctions and fines
Rwanda investigation bureau (RIB) data

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 103 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT The figure above shows that the offense that is predominant is the use of plastic and polythene bags followed by violating buffer zones, illegal fishing and illegal mining. Based on the analysis of quantitative and qualitative data, environmental sector offenses are assessed to have a moderate likelihood and impact on the ecosystem, economy, and criminal environment. The overall threat to the sector is considered Medium. This rating is derived from the fact that the majority of the identified cases were committed in Rwanda, with a few that originated from the neighbouring countries generating higher proceeds of crime compared to domestic cases. Rwanda was used as a transit point to other destinations, particularly Asia, Australia, and the EAC region.
3. Vulnerability sector assessment
The vulnerability assessment highlights Rwanda’s strong legal and institutional frameworks for addressing environmental crimes, including effective preventive and criminal law enforcement, as well as robust customs and border controls, enabling the country to combat environmental criminal activities effectively.
9.3.1. Institutional Framework

In addition to the Ministry of
Environment, Rwanda has set up various institutions to the manage natural resources including:RNRA which manages and promotes natural resources. Rwanda Environment Management Authority Responsible for environmental protection, along with provincial and district committees.
Rwanda Water Resources Board (RWB)
Responsible for improving the quality and productivity of water resources; and
Integrated Water Resources
Management (IWRM).Rwanda’s national water resources policy, which promotes the coordinated development and management of water, land, and related resources.
9.3.2. Legal Framework
To ensure that the environment is well protected, different legal instruments have been put in place by the government of Rwanda and other stakeholders. It includes but not limited to the following:
the Constitution of the Republic of Rwanda in its article 22 and 53. Established Law n°48/2018 of 13/08/2018 on environment, Law N° 064/2021 of 14/10/2021 governing biological diversity. Other provisions concerning environmental crimes include:
Law N° 064/2021 of 14/10/2021 governing biological diversity, Law N° 58/2018 of 13/08/2018 on mining and quarry operations, LAW N°48/2018 of 13/08/2018 on environment, Law N° 27/2021 of 10/06/2021 Law governing land and Law N°49/2018 of 13/08/2018 determining the use and management of water resources in Rwanda. The assessment of ML vulnerability in the Environmental and Natural Resource Crimes Sector was rated Low.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 104
4. Money Laundering risk of the environmental and natural resource crimes sector
Figure 24: The overall ML risk in environmental and Natural Resources sector
The assessment of ML risk in the Environmental and Natural Resource Sector was rated Medium Low; this derived from environmental natural resources threat, which is rated Medium while the vulnerability is Low. The risk assessment highlighted the following weaknesses:

Absence of indicators to detect these
crimes in financial transactions or activities, which limits the institutions’ ability to report suspicious activities.
Low understanding among
stakeholders about their AML responsibilities;
Not conducting parallel financial
investigation while investigating/ prosecuting environmental crimes
Lack of clear collaboration guidelines,
and ineffective remote witness testimony for environmental crimes.

Recommendations
The following are key recommended actions:

To create clear indicators to help
reporting persons to detect and report suspicious transactions and activities related to environment and natural resources;
To raise awareness among
stakeholders about AML obligations to enhance compliance;
To improve Data Systems: Strengthen
the Ministry of Environment’s database to distinguish between criminal and administrative sanctions;
To ensure that LEAs conduct
parallel financial investigation while investigating environmental crimes;
To clarify Asset Management Roles:
Establish detailed guidelines for the Seized and Confiscated Property Unit to ensure effective collaboration;
To enable Real-Time Information
Sharing: Implement a secure system for timely access to beneficial ownership and directorship details; and
To establish domestic collaboration
framework ensuring prompt exchange of information and joint activities whenever necessary.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 105 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT GENERAL KEY RECOMMENDATIONS 10

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 106

Recommendations to policy makers
The following key recommendations have been made:

Government of Rwanda should
strive to formalize its economy by adopting strong measures, such as implementing strong digital payment systems to enhance transparency and reduce reliance on cash transactions
Government of Rwanda should
strengthen the capacity and resource allocation to FIC and the law enforcement agencies to enable them adequately to counter the emerging ML / TF threat
Government of Rwanda should Update
and approve the financial inclusion National Strategy
Government of Rwanda should develop
a comprehensive legal and regulatory framework governing VAs/VASPs
Government of Rwanda should develop
legal and regulatory framework governing real estate agents/operators
VASPs should be designated as
reporting person
Build the capacity of the supervisory
bodies to supervise and ensure compliance with ML/TF preventive measures
the AML/CFT laws, relevant regulations
and Orders should be revised to address the identified technical compliance deficiencies in the mutual evaluation report (MER); and comply with AML/CFT International Standards
Ensure harmonization of TCSP
Regulations: Resolve regulatory conflicts regarding TCSPs serving as nominee directors, as company law restricts directorship to natural persons.
Establish the system for management
of assets seized and frozen in order to maintain their values
Enhance the asset recovery measures

Recommendations to Stakeholders

Competent authorities should develop
a mechanism to collect and document ML/TF related data in a manner which allows for easy retrieval and access
Supervisory authorities to enhance
the supervision by applying risk-based supervision
Supervisory authorities should ensure
that the reporting persons understand and implement their AML/CFT obligations and ML/ TF risks in order to be able to manage them
the competent authority should
explore the feasibility of providing direct access to basic information (via online) to all reporting persons and the public at large
All reporting persons, particularly
financial institutions, to conduct institutional risk assessment of their customers, products, services, transactions, and delivery channels, based on the findings of the NRA relevant to them
FIC in collaboration with competent
authorities should organise AML/CFT awareness campaign targeting key AML/ CFT stakeholders
FIC should develop an elaborate
guidance on PEP and communicate it to reporting persons for easy screening
Issue the national sanction list and
make it available to reporting persons
Ensure laws governing Notaries and
Bailiffs are amended in line with the AML/CFT law requirements to resolve the issue of conducting CCD and reporting of STRs

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3. Sectoral Recommendations

Financial sector regulators should adopt risk-based AML/CFT supervision to
appropriately target entities that are more vulnerable to ML/TF abuse.
Financial institutions should develop training programs for their staff, and continuously
review the effectiveness of trainings conducted, to improve AML/CFT knowledge among staff.
Financial sector service providers should enhance training for their staff/employees.
RGB to enhance Risk based supervision of the NPO sector and to put in place guidance
and best practices to NPOs on how they shall prevent the TF and enhance supervision.
RDB, to ensure all legal structures have submitted accurate and updated BO
information and enhance compliance with BO Reporting, conduct further awareness on BO obligations and enforce legal sanctions to improve compliance.
LEAs to conduct parallel investigation for ML cases and ensure that when handling
terrorism case, related terrorist financing case is investigated.

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 108 CONCLUSION Rwanda is dedicated to collaborating with both international and domestic stakeholders to prevent, detect, and take action against ML/TF. As a growing hub for business, finance, and trade in the region, Rwanda must remain proactive in addressing the rapidly changing ML threat landscape and evolving criminal techniques, ensuring its AML/CFT framework remains robust and adaptive. To this end, Rwanda is continuously enhancing its comprehensive approach to combating ML/TF through prevention, detection, and enforcement. This includes strengthening its AML/CFT legal and regulatory frameworks, closely supervising AML/CFT obligated entities across all sectors, and fostering strong partnerships between public and private stakeholders. Such collaboration will enable quicker identification of risks and more coordinated responses to emerging threats. The NRA offers a consolidated view of the primary ML threats, vulnerabilities and risks facing the country. FIs and designated non-financial businesses and professions DNFBPs in Rwanda are encouraged to integrate the findings of this NRA into their risk mitigation strategies to fortify their own AML measures. Risk assessment is an ongoing process, and Rwanda remains committed to continuously monitoring and evaluating risks. This approach ensures that the country maintains an up-to-date understanding of threats and the effectiveness of its mitigation strategies. The findings of the assessment informed the development of a strategic action plan aimed at guiding both the Government and the private sector in prioritizing resource allocation to address ML/TF risks. (see
ANNEX 3: 2024 NRA ACTION PLAN).

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 109 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT APPENDICES
ANNEX 1: List of stakeholders engaged in providing inputs to the NRA

Ministry of Finance and
Economic Planning • Rwanda National Police
Ministry of Foreign Affairs and
International Cooperation • Rwanda Revenue Authority
Ministry of Trade and Industry • Financial Intelligence Centre
Ministry of Justice • Notary and Bailiffs Representatives
Judiciary • Rwanda Bar Association
The Office of Ombudsman • Rwanda association of Real estate
brokers
National Bank of Rwanda • Rwanda bankers’ Association
National Intelligence and
Security Service • Banks Representatives
National Public Prosecution
Authority
Insurance and pension
Representatives
Transparency international
Rwanda • Cooperatives Representatives
Rwanda Development Board • Microfinance Representatives
Rwanda Forex Bureaus
Association • Rwanda Civil Society Platform
Rwanda Governance Board • Money Transfers Representatives
Rwanda Gas and Petroleum
Board
Real Estate Brokers and Agency
Representatives
Rwanda Investigation Bureau • E-Money issuers Representatives
Capital Market Authority • Accountant and Auditors
Representatives
Ministry of Environment • Directorate of immigration and
emigration

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 110
ANNEX 2: Public perception

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 111 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT
ANNEX 3: 2024 NRA ACTION PLAN
No Recommended actions/ Activities Responsible Institutions Timeline FebJune/25 2025/ 2026 2026/ 2027 2027/ 2028 ENHANCING UNDERSTANDING OF ML/TF RISK 1 Disseminate NRA findings and conduct awareness activities FIC(lead) Supervisory & Competent Authorities V 2 Update AML/CFT National policy and strategy FIC(lead) NCC V 3 Update the strategic plans of competent and supervisory authorities aligning their priorities, objectives and activities with the risks identified LEAs Supervisory authorities FIC V 4 Conduct Institutional risk assessment for their customers, products, services, transactions, and delivery channels. Reporting persons V ENHANCING AML/CFT LEGAL AND REGULATORY FRAME WORK 5 Update financial inclusion National Strategy MINECOFIN(Lead) BNR V 6 Develop a comprehensive legal and regulatory framework governing VAs/VASPs CMA (lead) BNR V 7 Develop legal and regulatory framework governing real estate agents/operators MINICOFIN(Lead) FIC V 8 Revise TCSP Regulations to be harmonized with provisions of the company law BNR (lead) RBD V 9 Develop and publish a Ministerial order on PEP MINICOFIN(Lead) FIC V 10 Amend laws governing Notaries and Bailiffs to align with the AML/CFT requirements MINIJUST V 11 Develop sentencing guidelines for ML/TF Cases Judiciary V STRENGTHENG INSTITUTIONAL CAPACITY 12 Organize training for Investigators, prosecutors and Judges on investigation and prosecution of ML/TF cases. LEAs (Lead) Judiciary V

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 112 13 Organize specialized training for Investigators, Prosecutors on identification of TF and the conduct of parallel financial investigations LEAs V 14 Organize specialized training for Investigators, Prosecutors on investigating cases involving Virtual Assets LEAs V 15 Develop or acquire advanced and specialized tools to investigate ML/TF cases, including software for tracking virtual assets and emerging crimes. LEAs V 16 Establish BNI and cash declaration systems, and develop tools to identify nondeclarations. FIC Competent Authorities operating at borders V V 17 Provide guidance to investigators and prosecutors on prioritizing and categorizing ML/TF cases, with a focus on identified high-risk predicate offenses LEAs V 18 Allocate adequate resources to law enforcement agencies to effectively combat the evolving ML/TF threat. LEAs V IMPROVING FINANCIAL INTELLIGENCE GATHERING, PROCESSING ,SHARING AND ACCESSING 19 Revise the FIC structure to expand staffing in core departments and establish any other necessary additional departments FIC MINICOFIN V V 20 Acquiring intelligence gathering tool FIC V 21 Organize training for FIC staff on operational and strategic analysis and other relevant areas FIC V 22 Provide guidance on accessing and using Finance intelligence for investigating ML/TF and predicate offenses. RIB NPPA V

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 113 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT INCREASING THE UNDERSTANDING AND IMPLEMENTING OF AML/CFT OBLIGATIONS 23 Develop a customised risk based supervisory manual Supervisory Authorities V 24 Implement risk based supervision activities Supervisory Authorities V 25 Organize training for Reporting persons on AML/CFT obligations Supervisory Authorities V V 26 Develop and implement training programs for reporting persons staff on AML/CFT Reporting persons V 27 Issue the Domestic sanction list and make it available to reporting persons NCTC FIC V 28 Establish and implement Risk based supervision framework for NPOs identified at risk of abuse for TF RGB V 29 Monitor the implementation of AML/CFT obligations and enforce sanctions for noncompliance Supervisory Authorities RGB V 30 Establish the system for maintaining comprehensive AML/CFT related statistics LEAs, FIC V 31 Strengthen digital payment systems to enhance transparency and reduce reliance on cash transactions BNR V IMPROVING ASSET MANAGEMENT AND RECOVERY MEASURES 32 Establish asset management system to preserve asset value and enabler confiscation by inventorying and properly managing seized, frozen, and confiscated assets, and conducting timely auctions LEAs MINIJUST(Lead) V V 33 Develop and implement procedures on provisional measures and confiscation to ensure uniformity in pursuing confiscation and to enhance effective recovery NPPA V V

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 114 34 Issue guidance on identifying and locating proceeds moved to other jurisdictions. RIB V V 35 Strengthen the Seized and Confiscated Assets unit by providing adequate human resources, equipment and appropriate infrastructure NPPA MINIJUST V V ENHANCING DOMESTIC AND INTERNATIONAL COOPERATION 36 Establish a comprehensive case management system for MLA and extradition requests. MINAFFET(Lead) MINIJUST RIB NPPA V 37 Develop and implement processes and procedures on other forms of cooperation and exchange of information. NPPA, RIB, FIC, Supervisory Authorities V 38 Establish collaboration framework for joint investigation of ML/TF and predicate offenses to ensure prompt exchange of information, good quality and timely investigation LEAs FIC V V 39 Expedite the Egmont Group membership FIC V V IMPROVING THE UNDERSTANDING, THE ACCESSIBILITY AND USE OF BO INFORMATION 40 Organize awareness activities on BO to all relevant authorities RDB Supervisory authorities V 41 Maintain accurate and updated BO information and Establish accessibility measures to BO basic information RDB RGB V 42 Enhance due diligence measures for legal structures at high risk RDB RGB Supervisory authorities V 43 Comply with CDD measures in relations to BO Reporting persons V

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 115 2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT ENHANCING TAX COMPLIANCE 44 Strengthening Tax Enforcement through enhancing the institutional capacity in combating tax evasion. RRA V 45 Educate taxpayers on the importance of compliance and the consequences of tax evasion. RRA V 46 Strengthening collaboration with both international and local partners to address crossborder tax evasion RRA V 47 Develop an advanced monitoring system RRA V MANAGING ML/TF RISKS RELATED TO ENVIRONMENTAL AND NATURAL RESOURCES 48 Develop indicators for suspicious transaction reports related to ML/TF activities involving environmental and natural resources MoE REMA FIC V 49 Raising awareness on ML/ TF risk associated with environmental and natural resources. MoE REMA FIC V 50 Improve Data Systems for monitoring comprehensive statistics on sanctions for noncomplying with environmental and natural resources protective measures. MoE REMA FIC V V 51 Establish the specific guidelines for management of Seized and Confiscated assets related with environmental and natural resources. MoE REMA FIC V V 52 Establish a domestic collaboration framework to ensure prompt exchange of information and coordinate joint activities in combating illegal wildlife trade MoE REMA FIC V V

2024 NATIONAL MONEY LAUNDERING AND TERRORIST FINANCING RISK ASSESSMENT 116

2024 Rwanda National Risk Assessment on Money Laundering and Terrorist Financing

Lineage: In force