Ghana exits money laundering list

Ghana has exited a global list of countries with deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CTF) regimes, more than two years after it was added.

The country was removed from the Financial Action Task Force’s (FATF’s) 'grey list' last Friday, after the global watchdog on money laundering (ML) and terrorist financing (TF) was satisfied that Ghana had adequately strengthened its regime against the two practices, in line with international requirements.

Consequently, the FATF said in a statement last Friday that “financial transactions from and into the country will no longer be subjected to the ‘increased monitoring process’".

EU blacklist

Ghana was added to the FATF's 'grey list' in February last year after the global watchdog found that the country's AML/CTF regime lacked the needed strength to combat the illicit practices.

Following its action, the European Union (EU) reacted in May last year by citing Ghana among a group of countries that it said had strategic deficiencies in their AML/CTF regimes.

As a result, financial transactions into and out of the country and due diligence on investments into the economy had been treated with extra caution, while Ghana’s Financial Intelligence Centre (FIC) led efforts to strengthen the AML/CTF regimes.

Congratulations

The FATF congratulated Ghana on the significant progress it had made in addressing the strategic AML/CTF deficiencies identified earlier by the FATF and included in its action plan.

"Ghana will no longer be subjected to the FATF’s increased monitoring process. This comes after Ghana received an on-site visit, despite the COVID-19 crisis. Ghana will work with the Intergovernmental Action Group Against Money Laundering and Terrorism Financing in West Africa (GIABA), of which it is a member, to continue to strengthen its AML/CTF regime," the statement, which was issued after a plenary meeting, said.

EU next

The Chief Executive Officer (CEO) of the FIC, Mr Kwaku Dua, told the Daily Graphic yesterday that the development was positive for Ghana's image and the economy.

He said after the removal of Ghana’s name from the FATF’s 'grey list,' it was expected that the EU would do the same.

"It is to be expected that they will also remove us from the 'black list' because their action was taken on the basis of the FATF’s action. Now that we have exited the FATF list, I think that the EU will also take us off," Mr Dua said.

He, however, explained that the union might have to follow a procedure to be able to remove the country from its list.

Implications

When asked what the removal from the FATF’s 'grey list' meant, Mr Dua said: "It means that the confidence that was lost in our AML/CTF regime is now back. It also means that our financial system has regained its integrity internationally and the FATF and the global community now believe that we have a stronger and robust system to fight the practices."

Mr Dua added that the additional monitoring and checks that financial transactions into and from the country were subjected to would now be relaxed, making it easier for investors and businesses to move funds into the economy for projects.

The feat also meant that financial institutions would no longer suffer the adverse effects associated with the extra due diligence to which their transactions were subjected, he stated.

He attributed the removal of the country from the list to the successful implementation of an action plan that was handed the country by the FATF to help strengthen its AML/CTF regimes.

Mr Dua said the government supported the centre, the national body mandated to combat ML/TF, with political will and resources, leading to the timely completion of the plan, to the admiration of the requirements.

Banks' perspective

For his part, the CEO of the Ghana Association of Bankers (GAB), Mr John Awuah, said the development was a big relief to financial institutions, whose operations had suffered adverse effects following the enlistment on to the 'grey list'.

He said the subsequent action by the EU had put pressure on Ghanaian banks, as their relationships with corresponding banks were revised in ways that hampered transactions.

"It caused some banks to have their corresponding banking relationships suspended, while others had to endure enhanced due diligence checks on their corresponding banking licences and transactions. It frustrated the relationship, and as you know, in international trade, time is of essence," Mr Awuah said.

He said the successful exit of the country from the list meant that banks and financial institutions would no longer suffer those extra due diligence, paving the way for increased business and growth.

Way forward

Going forward, the two financial sector experts advised the country to keep up the momentum against ML/TF to ensure that it did not slide back into the list.

They recommended strict enforcement of the laws, rules and regulations that were passed under the implementation of the FATF action plan to help ward off such illicit practices.

Mr Dua of the FIC further called on the government to continue to have political commitment towards the fight against the canker.

He said it was only through that and commitment that the country was able to find the resources to implement the various requirements requested by the FATF, leading to its exit.

Mr Dua called for increased financial support to the FIC to strengthen its operations and keep Ghana safe from the activities of money launderers and terrorism financiers.