A recent report by Inter-Governmental Action Group Against Money-Laundering in West Africa (GIABA) indicates that Ghana is not yet prepared to effectively combat money-laundering and terrorist financing in harmony with international standard of practice.
As such, Ghana had been placed on an expedited regular follow-up process and expected to present a follow-up report at GIABA's plenary
meeting in November 2010, to rectify the deficiencies that were identified during evaluation for the report dubbed: "Financial Action Task Force 40+9"(FATF 40+9)
Speaking on the 2009 report on Monday in a speech read on his behalf in Accra, Dr Kwabena Dufuor, Minister of Finance and Economic Planning (MOFEP) said the major deficiencies the evaluation report identified, included non-existence of a financial intelligence centre, and ineffective application of powers by appropriate authorities to investigate, detect,
seize and confiscate proceeds of crime.
Others were inconsistency in the mplementation of currency declaration
system across designated entry and exit points due to non-standardisation of the reporting format, and the lack of awareness of roles by Customs, Excise and Preventive Service officials.
The rest were lack of comprehensive preventive measures by financial institutions and accountable institutions in the areas of Customer Due Diligence, Politically Exposed Persons, application of risk-based approach to anti-money laundering and combating the financing of terrorism and combating the financing of terrorism compliance functions and the monitoring
of cross-border and domestic wire transfers, and lack of mechanism with regard to cross-border correspondent banking relationships, and clear
guidelines with respect to the use of third parties and intermediaries.
Dr Dufuor was delivering the keynote address at a three-day workshop organised by MOFEP and GIABA to develop a national strategy on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) strategy for Ghana.
He expressed optimism that the workshop would mark a new phase in the country's determination to counter money laundering and terrorist financing adding that it anticipated holistic approach towards collaboration,
coordination and co-operation among stakeholders would be realised.
"With a national strategy in place, we can more easily determine the activities and measures we would need to put in place to develop a robust
AMC/CFT regime.
"We would consolidate democracy, ensure economic and financial integrity, overcome corruption, accelerate socio-economic development and reduce poverty and promote political stability," he said.
Mrs Betty Mould-Iddrisu, Minister of Justice and Attorney-General, noted that money laundering undermined the legitimate operations of the private sector, caused loss of control of economic policies; capital flight and led to loss of government revenue and economic distortion as well.
"As stakeholders in the development of a National Anti-Money Laundering and Combating the Financing of Terrorism Strategy for the Republic of Ghana, it would be our task to formulate a framework to reveal the trail to link the tainted funds to criminal activity and convict the perpetrator," she said.
She admitted that the move would be quite challenging due to the high volume of cash based transactions and the existence of alternative
remittance awareness on the part of people outside the country.
Mr Martin Amidu, Minister of the Interior, expressed confidence that by the close of 2012, President John Evans Atta Mills' campaign promise of combating money laundering and drug trafficking would have been realised.
He said it was the expectation that Ghana would make the needed corrections to perform better in the next evaluation of GIABA.
"As members of the international community, we have international obligations to fulfil by ensuring compliance with our international
obligations in anti-money laundering and combating financial terrorism. We have fulfilled some of these obligations by enacting the anti-money laundering Act, 2008 (Act 749), the Anti-Money Laundering Regulations, 2008
(LI 1925), and the Anti-Terrorism Act, 2008 (Act 764)," he said.
In a speech read on his behalf, Dr Abdullahi Shehu, Director General of GIABA, observed that the cedi had become the most attractive, preferred and highly valued currency following the redenomination exercise in 2007
adding "the significance of this to criminals is legion: that is, less cash to carry, transaction with less volume of currency and easy to hide big
value in small volume".
"Although the convertibility of the currency is largely limited within the region with anticipated exchange risks, when combined with other factors such as free movement of goods and services within the region, proliferation
of unofficial currency exchange markets, prevalence of cash transactions, porosity of borders and weaknesses in AML enforcement measures across the region, criminals can still exploit the high value cedi notes as a store of
value," he said.
Dr Shehu noted that outcomes of the evaluations revealed significant deficiencies in the AML/CFT systems of member states that cannot be effectively addressed through isolated actions.
"It is in this regard that one of the main thrust of our follow up actions within the framework of our technical assistance programme to member states is to support them to develop a comprehensive National AML/CFT strategy," he said.
Dr Sehu said "each member state is expected to develop and implement a National AML/CFT Strategy to guide their efforts and actions against money laundering and terrorist financing. Only on this basis can truly realistic action plans be developed which would indeed reach the heart of the matter".
He revealed that 11 countries including Ghana had been so far evaluated with four countries namely Cote d'Ivoire, Guinea, Liberia and Togo to be evaluated by close of 2010 and 2011.
The GIABA report provided a summary of the AML/CFT measures in Ghana.
It described and analysed those measures and provided recommendations on how certain aspects of the system could be strengthened.
It also set out Ghana's level of compliance with the FATF 40 + 9 Recommendations.
To combat Money Laundering and the Financing of Terrorism, (ML/CFT), Ghana has developed legislative and institutional framework through the enactment of the Anti-Money Laundering Act (AMLA), 2008 (Act 749), the Anti-Terrorism Act (ATA), 2008, (ACT 762), the Narcotic Drugs (Control, Enforcement and Sanctions) Act, 1990 (PNDCL 236) , the Human Trafficking Act, 2005 (Act 694), the Bank of Ghana Act, 2002 (Act 612), the Banking Act, 2004 (Act 673), Securities Industry Act, 1993 (PNDCL 333), the Insurance
Act, 2006 (Act 724) the Foreign Exchange Act, 2006 (Act 723), and the Non-Bank Financial Institutions Act, 2008 (Act 774).
GIABA was established on the Authority of Heads of State and Government of ECOWAS on December 10, 1999.
Its main focus at inception was the protection of West African economies and financial systems against money laundering.
In January 2006, the statutes of GIABA were revised to reflect the growing link between Money Laundering and Terrorist Financing, following
terrorist attacks on the United States of America on September 11, 2002.
This is why counter-financing of terrorism was incorporated into GIABA's mandate.
GIABA conducts mutual evaluations of Member States in accordance with FATF standards and also in compliance with its enabling Statutes. The
evaluations are based on the FATF 40 recommendations (2003) and the nine special recommendations on terrorist financing (2001), using the AML/CFT Methodology 2004.
Member States of GIABA agree to subject themselves to a mutual assessment process in conformity with international standards for preventing money laundering and financing of terrorism as contained in Articles 12 to 14 of the GIABA Statute.
The scope of the evaluations is to assess whether the necessary laws, regulations or other measures required under the essential criteria are in force and effect, that there has been a full and proper implementation of all the necessary measures, and that the AML/CFT system as implemented is effective.
GIABA has adopted the FATF procedure in the evaluation of Member States and the evaluated country is rated depending on the efficacy of
measures put in place to detect, prevent or sanction cases of money laundering and terrorist financing.
Ratings range from compliant, largely compliant, partially compliant, to non-compliant.