The Bank of Ghana (BoG) is in the process of developing a robust framework for implementing a Risk-Based Approach (RBA) to Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) for designated non-financial businesses and professions.
Dr Ernest Addison, Governor, BoG, said this on Tuesday in a speech read on his behalf at the opening of the Regional Train-The-Trainers’ Workshop on Risk-Based Supervision for AML/CFT Compliance in Accra.
He said the Bank, in January this year, developed a basic risk-based approach to anti-money laundering and CFT supervision of savings and loans companies. He said this framework conforms to the Financial Action Task Force (FATF) supervisory requirements, with respect to off-site and on-site supervision.
These tools would be replicated for the finance houses, rural banks, and all BoG regulated institutions.
Dr Addison said, in all of those developments, the key objective was to monitor the risk profile of licensed institutions, the adequacy of the Money Laundering/Terrorist Financing risk assessment and risk management systems, and compliance with their AML/CFT obligations.
The four-day workshop is being organised by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), a specialised institution of the Eceonomic Community of West Africa States (ECOWAS), in collaboration with the International Monetary Fund and Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH.
It is being attended by more than 40 participants from the five Anglophone countries in the ECOWAS Sub-Region – Ghana, Nigeria, Liberia, Sierra Leone and The Gambia. The primary objective of the workshop is to equip the participants with the necessary technical skills to be able to deliver similar trainings in their respective countries.
Dr Addison said AML/CFT issues must be placed within the context of diversity, adding that issues of conflict of regulatory requirements, controls, awareness and capabilities across different countries and regions, more or less, constrained efforts at tackling money laundering.
He said those conditions created loopholes, which unscrupulous persons (money launderers) skillfully used to find new “outlets” for illicit money.
Consequently, such illicit money might be transferred from countries or institutions/regions with more stringent controls for cross-border financial crimes to areas with weaker control structures.
The Governor noted that from the global perspective, such developments constrained efforts against money laundering and improvement of financial integrity.
“This reinforces the need to strengthen international cooperation and efforts towards the harmonisation of AML/CFT principles and methodologies to improve gains made so far in the delivery of international financial system integrity,” he said.
Dr Addison said financial transactions across the ECOWAS Sub-region were predominantly cash-based with less sophisticated identification systems, which made most financial institutions vulnerable to AML/CFT risks.
He said although recent trends in modernisation of payment systems and financial digitisation were positive, they had introduced another layer of problems that AML/CFT efforts must address.
He said the fast evolution of financial technologies (Fintechs) could pose money laundering risks due to easy access to digitised products and services, which might compromise the know-your-customer principle.
The Governor said, over the years, Ghana had sought to establish a robust AML/CFT regime, and undertook her first National Risk Assessment in 2014, capturing all the sectors, including the banking sector.
Mr Kwaku Dua, GIABA National Correspondent and Chief Executive Officer, Financial Intelligence Centre, called on countries and financial institutions to take the necessary steps to identify, assess and understand the risks they were exposed to, and take the AML/CFT measures commensurate to those risks to mitigate them effectively.
“This would help bring sanity in the financial institutions and to ensure an effective or robust AML/CFT regime.”
Mr Aba Kimelabaou, Director-General, GIABA, in a speech read on his behalf, said the complex and dynamic nature of ML/TF made it imperative for stakeholders to continue to work together and explore better ways to counter the threats posed by the seemingly intractable problem.