Financial Crime World

Money Laundering: The Hidden Menace

What is Money Laundering?

A growing concern in Ghana’s financial sector, money laundering has become a major threat to the country’s economy and national security. This illegal activity involves concealing or disguising the origin of illegally obtained funds by making it appear as if they come from legitimate sources.

According to the Anti-Money Laundering Act, 2014 (Act 874), money laundering is defined as:

  • Converting, concealing, disguising or transferring property known or suspected to be proceeds from an unlawful activity.
  • Aiding and abetting money laundering by helping individuals retain and control illegally obtained funds.

Penalties for Money Laundering

The penalties for violating the Anti-Money Laundering Act are severe. Individuals found guilty of money laundering can face:

  • A fine of up to GHS 60,000.
  • Imprisonment of at least 12 months and not more than 10 years, or both.
  • Institutions that fail to comply with anti-money laundering regulations can also be fined up to GHS 6,000.

Freezing of Assets

In the course of investigations, the Financial Intelligence Centre (FIC) has the power to freeze accounts for a period of one year under Section 23A of the Act. However, recent Supreme Court decisions have highlighted the need for reforms to ensure that this power is exercised in a manner that respects individuals’ constitutional right to own property.

In a landmark case, the Supreme Court ruled that Trial Courts should not permit institutions to retain frozen assets beyond the one-year period without recourse to the Constitution’s guarantee of preservation of property rights. The Court also recommended that investigative bodies should be able to apply to the Courts for an extension of time for further freezing of accounts during investigations.

Conclusion

Money laundering is a serious crime that has severe consequences for individuals, institutions and the nation as a whole. To avoid falling victim to this illegal activity, it is essential that businesses and individuals conduct thorough due diligence on their clients and transactions. By doing so, they can help prevent the laundering of illegally obtained funds and ensure the integrity of Ghana’s financial system.

References

  • Anti-Money Laundering Act, 2014 (Act 874)
  • Black’s Law Dictionary, Ninth Edition [2004]
  • The Consequences of Money Laundering and Financial Crime, Bureau of International Narcotics and Law Enforcement Affairs, U.S Department of State
  • Anti-Money Laundering Act, 2008 (Act 749)