Financial Crime World

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

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ACCRA, GHANA - In a bid to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, Ghana has reviewed its National Risk Assessment (NRA) process. The review was prompted by strategic deficiencies identified in the country’s AML/CFT framework.

Review Process

The NRA process aimed to identify, assess, and mitigate money laundering and terrorist financing risks through adjustments and amendments in legal and regulatory frameworks. The goal was to develop a National AML/CFT Policy document and Action Plan to guide resource allocation and ensure compliance with the regime.

Challenges

However, stakeholders have raised concerns about the limitations faced during data collection. Some institutions did not provide required information, while others delayed or refused to validate their data. The lack of clear understanding of ML/TF issues among some respondents also hindered the process.

Highlights and Challenges

The review highlighted several challenges in Ghana’s compliance with AML/CFT measures:

  • The extractive and petroleum, cocoa, and hotel sectors were not previously assessed, and sector-specific guidelines had not been revised to align with the FATF 40 Recommendations.
  • There was no administrative sanctions regime in place until recently.
  • Ghana’s cash-based economy has grown significantly, leading to an increase in microfinance institutions, mobile money services, and investment companies. This has made the financial system more vulnerable to ML/TF risks.

Threat Analysis

The assessment also noted that:

  • Crimes such as fraud, stealing, robbery, drug trafficking, corruption, and tax evasion were identified as rampant in Ghana.
  • The extractive, petroleum, and hotel sectors were highlighted as areas of concern.
  • Cybercrime was also noted as a significant issue.

National Vulnerability Assessment

The national vulnerability assessment focused on 24 areas with varying levels of capacity to detect and prevent ML/TF risks. The overall threat rating was deemed medium-high.

Key Recommendations

To address the challenges and improve Ghana’s AML/CFT regime, the review process recommends:

  • Strengthening sector-specific guidelines to align with FATF 40 Recommendations.
  • Developing an administrative sanctions regime to penalize non-compliance.
  • Enhancing capacity building among industry players to detect and prevent ML/TF risks.
  • Implementing a robust risk-based approach to AML/CFT regulations.

Conclusion

Ghana’s review of its NRA process is a crucial step towards strengthening its AML/CFT regime. While challenges were faced during the process, the outcome provides valuable insights into the country’s ML/TF risks and vulnerabilities. The implementation of recommended measures will be crucial in ensuring Ghana’s compliance with international standards and effectively combating money laundering and terrorist financing.