Accra, Ghana, December 5, 2019//-Policymakers in Ghana are finding it difficult to catch a sleep due to the rising money laundering actives in the West African country.
Although Ghana can boast of some of the strongest anti-money laundering rules and regulations in the West African sub-region, it is not being spared by money launders.
According to experts, money laundering is the process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean. Money laundering in itself is a crime in Ghana and the world over.
Criminals use a wide variety of money laundering techniques to make illegally obtained funds appear clean.
Stages of money laundering
The process of laundering money also referred as dirty money typically involves three steps: placement, layering, and integration.
Placement involves moving the funds from direct association with the crime. While layering involves disguising the trail to foil pursuit), and integration is making the money available to the criminal, once again, with its occupational and geographic origins hidden from view.
Over the years, criminals have concealed their illicit proceeds by investing in legitimate businesses through a number of schemes using the Bank, Non-Bank Financial Institutions (NBFIs) and the Designated Non-Financial Businesses and Professions (DNFBPs).
It is estimated by the International Monetary Fund (IMF) that the magnitude of money laundered in the world is about 3-5% of the world’s Gross Domestic Product (GDP).
According to the United Nations Office on Drug and Crime (UNODC) one – fifth of this comes from illicit drug trade.
Figures from the Financial Intelligence Centre (FIC) Ghana revealed that 2,010 suspicious transaction reports (STRs) from banks and non-bank financial institutions on suspected money laundering cases from 2010 to 2016.
Out of the number, 787 of them had been reported to various law enforcement agencies for appropriate actions.
Although 2017, 2018 and 2019 figures are yet to be released, officials of the FIC said the numbers are still increasing on monthly basis.
Since 2014, Ghana only prosecuted and convicted 11 persons for various money laundering offences and its associated crimes.
Also, the latest Anti Money Laundering Index conducted by the Swiss Basel Institute of Governance indicated that Ghana has gone up six places to 60th in the anti-money laundering and terrorist financing rankings.
According to the rankings, Ghana ranked 60th position in 2019 as against 66th position in 2018. With a score of 5.29 in 2019 compared to 5.32 in 2018.
Based on the score, a country is seen or can be classified as doing well if it is closer to 1, however, if it is close to 10 then it means that it is not doing that well. This is based on the score range of 1 -10.
This shows that Ghana is not doing well in fighting money laundering and its related crimes in the country. The best-performing countries show a near-zero risk level, in this domain countries are ranked from highest to the lowest level of risk.
Money laundering trends
Madam Naa Wellbeck, an official of Market Conduct Office of the Financial Stability Department of the Bank of Ghana (BoG) noted that money laundering trends including cyber-crime schemes, romance fraud, confidence fraud, casino and lottery scam, gold scam and impersonation, are also on the rise in the country.
Cheque cloning and email hacking are the newest trends currently being used by money launderers and these mechanisms are rapidly gaining grounds, she added.
Threats
With regard to the threat analysis, 2018 National Risk Assessment (NRA) assessment concluded that crimes such as fraud, stealing, robbery, drug trafficking, corruption, and tax evasion, are the most rampant.
Most of the sectors captured in this NRA have acknowledged the tremendous growth of Ghana’s cash-based economy. As a result many microfinance institutions, mobile money services and investment companies have emerged, and are operating, thus boosting the internal transfer of money.
This has made the financial system vulnerable to Money Laundering and Terrorism Financing (ML/TF) risks. The extractive, petroleum and hotel sectors have exposed the threat of this sector.
“Cybercrime is a particularly big issue in Ghana. The overall threat was rated as medium-high. Our assessment of the national vulnerability focused on 24 areas with varying levels of capacity to deal with threats”, the NRA said in its executive summary.
Deficiencies
Banks operating in the country are required to report large cash transactions and other suspicious activities that might be signs of money laundering to the BoG, FIC, Economic and Organised Crime Office (EOCO) and securities for prosecution.
However, some of these banks, NBFIs and microfinance institutions (MFIs) fail to report large cash transactions and other suspicious money laundering activities to the institutions mentioned above.
Another deficiency is the understaffing of the FIC was established in accordance with section 4 of the Anti-Money Laundering Act, 2008 (Act 749) as amended – as a body corporate with perpetual succession mandated by law to request, receive, analyse, interpret and disseminate financial intelligence in Ghana and abroad.
The Centre only has 14 staff stationed in Accra. How can 14 staff monitory the activities of money laundering and its related crimes across the country? Experts questioned.
Also, the use of operational financial intelligence to prosecute money launderers by law enforcement agencies in Ghana is limited.
Additionally, the overall picture depicts the existence of a strong legislative and regulatory framework, but a low enforcement regime.
Regulations
The Ghana Anti-Money Laundering Act, 2008 (Act 749) states that a person commits an offence of money laundering if the person knows or ought to have known that, acquiring property is or forms part of the proceeds of such unlawful activity.
Once a person converts, conceals, disguises, or transfer properties, or disguises the unlawful origin of the property, that decision automatically forms part of the money laundering chain, Madam Wellbeck said.
She explained that the objectives of the Anti-Money Laundering Regulations were formulated to provide guidelines for formation of internal rules, identification of unlawful activity, establishment and verification of identity, verification of legal entities, verification of partnerships and record keeping.
Ghana is which is a member of the Financial Action Task Force (FATF), an inter-governmental body which is charged with the responsibility of examining money laundering techniques and trends, reviewing national and international measures.
It had already been implemented, and setting out further measures that needed to be applied to combat money laundering in the country.
Although the regulators, law enforcement agencies and policymakers are working around to stem money laundering activities in the country, it appears the criminals are ahead of them.
By Masahudu Ankiilu Kunateh, African Eye Report
