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Compliance Risk Assessment Key to Ghana’s Fight Against Money Laundering and Terrorist Financing

The Government of Ghana has launched a comprehensive national risk assessment (NRA) process to identify, assess, and mitigate money laundering (ML) and terrorist financing (TF) risks. This crucial step helps the country understand the ML/TF threats facing its economy.

Understanding the NRA Process

According to experts, the NRA process tested the robustness of Ghana’s current anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The goal is to develop a National Strategic AML/CFT Action Plan that will guide the allocation of resources and ensure compliance with the AML/CFT regime.

Technical Assistance

The World Bank provided technical assistance and guidance to working groups in Ghana, who used a national risk assessment tool to conduct the exercise. The findings, interpretations, and judgments are solely the work of the working groups and do not reflect the views of the World Bank.

Phases of the NRA Process

Ghana’s NRA process involved three phases between September 2014 and April 2016. This report focuses on the final phase, which involves finalizing and recommending the Report and Action Plan.

Mutual Evaluation Findings

A Mutual Evaluation conducted in 2009 revealed several shortcomings in Ghana’s compliance with AML/CFT measures. For instance:

  • Financial institutions failed to conduct customer due diligence (CDD) as required by FATF Recommendations.
  • There were no guidelines for accountable institutions to develop internal rules.
  • A Financial Intelligence Centre was non-existent.

Progress Made

However, significant progress has been made since then, with several legislations passed to address the shortcomings.

Key Findings and Recommendations

The NRA process identified the rapid growth of Ghana’s cash-based economy as a major risk factor. The proliferation of microfinance institutions has increased the internal transfer of money, making the financial system more vulnerable to ML/TF risks. The report highlights the need for adjustments and amendments in legal and regulatory frameworks to mitigate these risks.

Recommendations

The NRA process recommends:

  • Improving customer due diligence (CDD) practices by financial institutions.
  • Developing guidelines for accountable institutions to develop internal rules.
  • Establishing a Financial Intelligence Centre to facilitate information sharing and monitoring of suspicious transactions.