Financial Crime World

Ghana’s Fight Against Money Laundering and Terrorist Financing: Challenges and Progress

Accra, Ghana - In a bid to strengthen its fight against money laundering and terrorist financing (ML/TF), Ghana has undergone a national risk assessment (NRA) review process.

The Review Process

The review was conducted in two phases, involving the re-composition of working groups and validation of their reports. The objective of the review was to identify and mitigate ML/TF risks by adjusting and amending legal and regulatory frameworks.

Challenges Faced

However, the review process faced several challenges, including:

  • Limited access to data
  • Lack of cooperation from some institutions
  • Some respondents did not have statistical units or information readily available, making it difficult to obtain accurate data
  • Industry players expressed concerns about providing information, citing fears of tax audits and business secrets being compromised

Progress Made

Despite these challenges, Ghana’s NRA review process has made significant progress. The Mutual Evaluation Report (MER) conducted in 2016 identified several strategic deficiencies that need to be addressed.

Key Findings

The MER revealed that:

  • Ghana’s AML/CFT regime was not comprehensive, with some sectors such as extractive and petroleum, cocoa, and hotels not being included in earlier assessments.
  • Sector-specific AML/CFT guidelines had not been revised to be consistent with the Financial Action Task Force (FATF) 40 Recommendations.
  • The financial system is vulnerable to ML/TF risks due to the growth of its cash-based economy and emergence of microfinance institutions, mobile money services, and investment companies.

Threat Analysis

The assessment concluded that:

  • Crimes such as fraud, stealing, robbery, drug trafficking, corruption, and tax evasion are the most rampant in Ghana.
  • The extractive, petroleum, and hotel sectors have also exposed the threat of these crimes.
  • Cybercrime is a particularly big issue in Ghana, with an overall threat rating of medium-high.

National Vulnerability Assessment

The national vulnerability assessment focused on 24 areas with varying levels of capacity to detect and prevent ML/TF risks. The assessment identified several vulnerabilities, including:

  • Weaknesses in customer due diligence
  • Transaction monitoring
  • Reporting requirements

Implementation of Measures

Ghana has implemented several measures to address the deficiencies identified in the MER, including:

  • Development of a national AML/CFT policy document and action plan.
  • Sector-specific guidelines
  • Administrative sanctions regime to ensure effective implementation of the AML/CFT regime.

Conclusion

In conclusion, Ghana’s NRA review process has identified several challenges and vulnerabilities in its AML/CFT regime. However, the country has made significant progress in addressing these deficiencies and is committed to strengthening its fight against ML/TF.