National ML/TF Risk Assessment 2024

Rwanda’s 2024 National ML/TF Risk Assessment: Advancing Financial Integrity and Risk Awareness

In November 2024, Rwanda released its updated National Money Laundering and Terrorist Financing Risk Assessment (NRA), a comprehensive report that evaluates the country’s exposure to financial crime risks and outlines strategies to mitigate them. The assessment builds upon the foundation of the 2018 NRA, incorporating new data, sectoral insights, and emerging threats to reflect the evolving economic and regulatory environment. Conducted by Rwandan authorities using the World Bank’s assessment tools, this exercise reflects the country’s commitment to maintaining compliance with Financial Action Task Force (FATF) standards and reinforcing its position as a secure and transparent financial hub in East Africa.

Strengthening the National AML/CFT Framework

Rwanda’s aspiration to become a regional financial hub under Vision 2050 has been accompanied by significant progress in developing a strong anti-money laundering and counter-terrorist financing (AML/CFT) regime. Over recent years, the government has modernized its legal and institutional architecture, creating key bodies such as the Financial Intelligence Centre (FIC) and the Coordination Council (CC), both of which play pivotal roles in policy formulation, coordination, and enforcement. Legislative reforms, including the Law No. 028/2023 on the prevention and punishment of money laundering and terrorist financing and the Law No. 037/2021 on the recovery of offence-related assets, have strengthened the country’s legal backbone for combating illicit financial flows.

The 2024 assessment serves as an update to Rwanda’s understanding of money laundering and terrorist financing vulnerabilities across multiple sectors. It provides a foundation for developing tailored countermeasures to prevent the misuse of financial systems and safeguard national stability.

National Money Laundering Risk

The NRA rated Rwanda’s overall money laundering (ML) risk as Medium, reflecting a balance between the country’s progress in regulatory enforcement and the continuing prevalence of certain predicate offenses. The assessment identified embezzlement, fraud, tax crimes, and cybercrime as the four most significant sources of illicit proceeds. Embezzlement accounted for thirty-nine percent of total proceeds of crime, making it the most significant threat, followed by fraud at twenty-four percent, tax crimes at twenty percent, and cybercrime at thirteen percent. These offenses not only generate large sums but also pose significant challenges to detection and recovery.

While domestic money laundering threats remain moderate, improved detection methods have led to an increase in registered cases. The report noted forty-four money laundering cases investigated over five years, resulting in nine convictions. However, despite improved vigilance, gaps persist in beneficial ownership transparency, asset recovery mechanisms, and the application of risk-based approaches across sectors. The informal economy continues to represent a substantial risk factor, contributing to over half of Rwanda’s gross domestic product and complicating the monitoring of cash-based operations.

Terrorist Financing Risk

The 2024 assessment rated Rwanda’s terrorist financing (TF) risk as Medium, derived from a medium threat level and a medium-low vulnerability rating. The domestic threat was considered low due to effective law enforcement measures, robust border controls, and ongoing public awareness initiatives. However, the external threat remains of concern, largely influenced by the presence of active terrorist groups in neighboring countries that have, in some instances, carried out cross-border attacks. Rwanda’s growing cooperation with regional and international partners has helped enhance the capacity to detect and prevent TF-related activities, but continuous vigilance remains necessary.

Sectoral Risks and Vulnerabilities

The assessment evaluated eighteen sectors across financial institutions and designated non-financial businesses and professions (DNFBPs) to determine their exposure to money laundering and terrorist financing risks. The real estate sector emerged as the most exposed, rated as Medium-High due to its history of being used to conceal proceeds of crime and the absence of a comprehensive regulatory framework. The banking sector, e-money issuers, and foreign exchange bureaus were rated Medium, reflecting their large transaction volumes and exposure to international transfers. In contrast, sectors such as insurance, securities, pensions, and money remittance services were found to have Medium-Low risk, while professional services like accounting, law, and auditing were rated Low.

The report highlights that, within DNFBPs, bailiffs and real estate businesses require stronger oversight and legal guidance. Although the financial sector has achieved notable improvements in compliance through customer due diligence, suspicious transaction reporting, and the adoption of risk-based supervision, enforcement remains inconsistent. The National Bank of Rwanda and other regulators continue to strengthen oversight and ensure that institutions align their internal controls with FATF standards.

Virtual Assets, Tax Crimes, and Environmental Risks

In recognition of global trends, the 2024 NRA expanded its scope to include Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). The sector was rated Medium-Low risk, with vulnerabilities attributed to limited regulatory coverage and inadequate expertise among financial and law enforcement authorities. While no cases of terrorist financing linked to virtual assets were detected, fraudulent investment schemes and fake cryptocurrency exchanges were identified as potential threats.

The assessment also examined tax crimes, which accounted for approximately twenty percent of all criminal proceeds between 2019 and 2024. Although Rwanda’s legal framework is strong, institutional capacity to investigate and prosecute tax evasion remains a challenge. Similarly, environmental and natural resource crimes were found to have a Medium-Low risk, mainly due to weaknesses in detecting such activities through financial monitoring systems.

Non-Profit Organizations and Terrorist Financing

The risk of terrorist financing abuse within the Non-Profit Organization (NPO) sector was rated Low. Out of 2,366 registered NPOs, only a small fraction showed exposure to potential misuse. Faith-Based Organizations (FBOs) were noted as relatively more vulnerable due to their reliance on cash-based fund collections, while international NGOs exhibited stronger governance and transparency standards. The Rwanda Governance Board continues to supervise and regulate NPOs to prevent exploitation for terrorist purposes.

Institutional Challenges and Recommendations

While Rwanda’s AML/CFT architecture is considerably strengthened, the report underscores certain areas needing improvement. These include developing proportionate sentencing guidelines for money laundering offenses, expanding the beneficial ownership registry, improving cross-border cooperation, and equipping investigators with the tools to trace illicit virtual asset transactions. The Financial Intelligence Centre’s pending membership in the Egmont Group also limits the country’s access to global intelligence-sharing networks.

To address these gaps, the report recommends updating the national AML/CFT strategy based on the 2024 findings, enhancing inter-agency coordination, increasing training for investigators and prosecutors, and promoting the formalization of the economy. Emphasis is also placed on building digital payment infrastructure, encouraging cashless transactions, and improving the management of seized and confiscated assets.

Conclusion

The 2024 National Money Laundering and Terrorist Financing Risk Assessment demonstrates Rwanda’s continued progress toward strengthening its financial integrity and resilience against illicit finance. By expanding the scope of risk evaluation to new areas and aligning domestic frameworks with international standards, the country reaffirms its commitment to transparency, stability, and global cooperation. The findings and recommendations of this assessment are not only a roadmap for future reforms but also a reflection of Rwanda’s determination to balance economic growth with compliance and integrity in an increasingly complex financial landscape.