CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
or bearer instruments worth CVE1 million or more must declare them in writing. Duty of Control The law imposes a strict “duty of control” ( dever de controlo ) requiring direct involvement from the com - pany’s senior management in the following cases: • Approval of policies – Policies, procedures and internal controls designed to mitigate and manage identified money-laundering risks must be formally approved by the company’s senior management. • Appointment of a responsible officer – The com - pany is required to designate a responsible top- level manager to ensure the application of the legal preventative requirements. • High-risk approvals (PEPs) – If the company estab - lishes or maintains business relationships with politically exposed persons (PEPs), it must obtain prior authorisation from its senior management. • Implementation of controls and audit – The board must ensure the implementation of an independ - ent internal control mechanism and maintain an internal audit function independent of other depart - ments to verify the compliance and effectiveness The fact that a company is a legal entity does not exempt its directors and managers from personal liability: • Criminal liability – The criminal liability of a legal entity does not exclude the individual responsibil - ity of its agents, such as directors. Furthermore, the company itself can be held criminally liable if a crime was made possible due to a wilful violation of surveillance or control duties by its organs or representatives. • Inhibition of functions (accessory sanction) – As an accessory sanction for AML infractions, a court or supervisory authority may ban an offender from exercising corporate, administrative, or manage - ment functions for a period ranging from one to ten years. of these policies. Personal Liability • Personal fines – The law establishes specific fines for individuals (eg, managers and directors) who commit administrative offences.
• Crime for breach of confidentiality (tipping-off) – If a director or employee reveals to a client or third party that a suspicious transaction report was sent to the UIF, they are committing a crime punishable by up to three years in prison, or a fine. • Good faith exemption – As a safeguard, the law exempts directors and employees from any crimi - nal, civil, disciplinary or administrative liability if they report their suspicions to the UIF in good faith, even if it is later proved that the illegal activity did not occur. 6. Audit, Risk and Internal Controls 6.1 External Auditors The appointment of an external auditor by the share - holders’ ordinary general meeting becomes manda - tory if, at the end of the financial year, the company exceeds one or both of the following thresholds: • annual turnover exceeding CVE200 million (over GBP1.528 million); and • total net assets exceeding CVE15 million (GBP114,654.19). Auditors are subject to certain requirements regarding their independence, which prohibits them from having any personal, financial or professional relationships that are incompatible with the functions of an auditor. Companies issuing securities admitted to trading on the stock exchange are also required to have an exter - nal auditor. 6.2 Risk Management and Internal Controls Although the laws do not explicitly use the terms “geo - political risk” or “international sanctions”, they strictly address these issues under different terminology. Geopolitical Risk (Country/Geographic Risk) Companies are required to identify, assess and under - stand “country or geographic risk”. At the board level, senior management must formally approve all poli - cies, procedures and controls designed to mitigate and manage these geographic risks. Furthermore, the board of directors is legally required to include a clear
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