Financial Crime World

Ghana Eyes Compliance Risk Assessment Frameworks to Fight Money Laundering

Introduction

The Republic of Ghana has taken a significant step in combating money laundering and terrorist financing by revisiting its compliance risk assessment frameworks. The National Risk Assessment (NRA) process is aimed at identifying, assessing, and mitigating risks associated with these illicit activities.

Commitment to Fighting Money Laundering

Ghana’s government has reaffirmed its commitment to fighting money laundering, illicit financial flows, and transnational organized crimes. To achieve this goal, a World Bank-conducted risk assessment tool will be used to guide working groups in identifying vulnerabilities and threats.

The National Risk Assessment (NRA) Process

The NRA process involves three phases:

  • Phase 1: Identify Vulnerabilities and Threats: This phase aims to identify the risks associated with money laundering and terrorist financing.
  • Phase 2: Assess Risks: In this phase, the identified vulnerabilities and threats are assessed to determine their likelihood and potential impact.
  • Phase 3: Report Finalization and Recommendations for Action Plan: The final phase focuses on report finalization and recommendations for an action plan to mitigate the risks.

Improving AML/CFT Measures

The 2009 Mutual Evaluation of Ghana highlighted several shortcomings in the country’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) measures, including a lack of customer due diligence by financial institutions and no guidelines for internal rules. However, since then, several legislations have been passed to address these issues.

Boosting Cash-Based Economy with Microfinance Institutions

The emergence of microfinance institutions has boosted Ghana’s cash-based economy, increasing vulnerability to money laundering and terrorist financing risks. The NRA is expected to lead to a National Strategic AML/CFT Action Plan that will inform resource allocation and guidance for accountable institutions.

Conclusion

The ultimate goal of the NRA is to strengthen Ghana’s compliance risk assessment frameworks and protect its economy from the threats of money laundering and terrorist financing. By identifying vulnerabilities and threats, assessing risks, and implementing effective measures, Ghana can effectively combat these illicit activities and maintain a stable financial system.