By Helena Ama Cromwell
The global financial sector is experiencing an immense improvement over the years and globalization has been a key instrument to this achievement. Unfortunately, this development has also been accompanied with some transnational and financial crime like Money Laundering.
Money Laundering is the process whereby criminals attempt to conceal the illegal origin or illegitimate ownership of property and assets that are the proceeds of their criminal activities by passing it through a complex sequence of banking transfers or commercial transactions.
Laundering money may be the least concern of certain countries but it is a serious issue which needs immediate attention. It has staid consequences on the economy, political and social development of a country.
Legitimate private companies and businesses are the most affected group of money laundering. Since these businesses cannot compete with money laundering front businesses that can afford to sell products below its actual cost because their primary purpose is to clean illegitimate money and not to make profit.
Moreover, laundered money is usually untaxed meaning ultimately the people of a country must make up for the loss in tax revenue as a result putting financial pressure on the citizens.
Dirty money is known to be the lifeblood of organized crime and terrorism, therefore, global investigations on money laundering focuses more on drug trafficking and terrorist organizations. This is because a successful drug money laundering means more drugs, more crimes and more violence in the society.
The connection between money laundering and terrorism is a more complex, but it plays a critical role in promoting and sustaining terrorist organizations. People who financially support terrorist do not simply hand over the money to the terrorist groups. However, they send the money in a circles to allow them fund the organization and still remain anonymous. And on the other end, terrorist groups launder the money so that authorities are unable to trace them and foil their planned attack.
In Ghana, the Anti-Money Laundering Act, 2008 (Act 749), the Anti-Terrorism Act, 2008 (Act 762) and the subsequent passage of the Anti-Money Laundering Regulations, 2011 (L.I.1987) states that “a person commits an offence of money laundering if the person knows and/or ought to have known that property is and/or forms part of the proceeds of an unlawful activity and the person; converts, conceals, disguises or transfers the property; conceals or disguises the unlawful origin, disposition, movement or ownership of rights with respect to the property; or acquires, uses or takes possession of the property”.
Financial institutions in Ghana are exposed to varying money laundering risks and serious financial and reputational damage if they do not manage these risks effectively. Therefore, the Bank of Ghana (BoG) and Financial Intelligent Center (FIC) initiated measures for both banking and non-banking financial institutions in July 2018 to curb this ever growing delinquent.
The guidelines requires that every financial institution licensed by BoG shall adopt policies indicating its commitment to comply with Anti-Money Laundering and obligations under the relevant Acts and regulations to prevent any transaction that facilitates money laundering activities.
Also, every financial institution shall formulate and implement internal rules, procedures and other controls that will deter criminals from using its facilities for money laundering and shall ensure that its obligations under the relevant laws and regulations are always met.
Subsequently, when these policies are diligently implemented, it would not only minimize the risk faced by licensed financial institutions of being used to launder the proceeds of crime but also provide protection against fraud and reputational and financial risks.
Although measures are being implemented by relevant stakeholders, money laundering in Ghana is still on a rise and as of February 2019, the European Commission (EC) included Ghana to a list of 23 countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.
It is eminent for financial institutions in the country to have sporadic Anti-Money Laundering training for its management and staff so they can effectively detect the act and report to the appropriate quarters to be addressed.
By Helena Ama Cromwell