Ghana

Money laundering is a problem in Ghana and its manifestations include

(1) the perception of Ghana as a weak anti-money laundering jurisdiction;

(2) the increasing incidence of drug trafficking and the huge inflows of cash into the country, which are strongly suspected to be laundered funds;

(3) the surge in expensive real estate purchases paid for in cash in US dollars; and

(4) the apparent lack of public awareness of the phenomenon of money laundering and its harmful effects. In particular, increased cases of drug trafficking and arrests at the various ports of entry, offshore interdiction, and related corruption cases are reported weekly in the media.

A scandal in November 2005 involving a parliamentarian in New York during the seizure of 62 kg of heroin, and the interdiction of the MV Benjamin, alleged to be carrying 77 parcels of cocaine (as much as 2 tons) and involving an Assistant Commissioner of Police in the Ghana Police Service and other known narcotic traffickers, raises serious concerns about Ghana’s effort to combat illicit drug trafficking and related money laundering in the country.

A significant feature of the economy is that migrant worker remittances have been increasing consistently since 1990. Indeed, it has been reported that migrant worker remittances continue to be an important anchor of the Ghanaian economy. The inflow of remittances has been rising and continues to be an important source of foreign exchange to the economy, with its magnitude exceeding the amount of official development assistance to Ghana. It is unclear to what extent this development has been driven by the lax AML environment and the prognosis and implications under the envisaged more stringent regulatory/ supervisory regime. On November 6, 2007, the Parliament of Ghana passed an AML law, but the necessary AML regulations are yet to be issued.

Apart from the AML law, other legislations and regulations relevant to the AML/CFT framework include: The Narcotics Drug (Control) Enforcement and Sanctions Law 1990 (PNDCL236); the Foreign Exchange Act 2006; the Banking (Amendment) Act 2007; the Criminal Code; and of course, the Anti-Money Laundering Regulations 2007. Thus Ghana has had to rely entirely on the Narcotics Drug (Control) Enforcement and Sanctions Law 1990 (PNDCL 236) to deal with drug-related cases of money laundering. Apart from the lack of a separate legislation on terrorist financing, there is no FIU in Ghana. In the absence of an FIU, Ghana does not meet the standards prescribed under Recommendations 25 and 26 of the FATF and thus would not be in a position to share financial reciprocal information with the international community. Fortunately, the recently passed AML law has provision for the establishment of this important AML/CFT structure. Similarly, the National AML/CFT Strategy framework with succinct procedures for implementation, developed with the participation of stakeholders from the Ministry of National Security, the Narcotics Control Board, the Ghana Customs, Excise and Preventive Service, the Bank of Ghana and Ministries of Interior, Justice and Finance, has not yet been approved by the Government of Ghana. These are some of the major challenges and priorities for action for this country in the coming year.

A Committee for Cooperation between Law Enforcement Agencies and the Banking Community (COCOLAB) was constituted in 1997 by the Bank of Ghana and the Inspector General of Police, with the support of the Government. Its initial membership was made up of representatives of the Bank of Ghana, licensed banks, and the Police, but it was later enlarged to include the Bureau of National Investigations, the Immigration Service, and the Customs, Excise and Preventive Service. The core mandate of the Committee was to provide a forum for exchange of ideas, knowledge and information on criminal syndicates’ modus operandi and the process of obtaining evidence to track down prime culprits involved in ML-related schemes and crimes. The COCOLAB has since become dormant.

In 2006, a Technical Committee was established to draft the Anti-Money Laundering and the Proceeds of Crime Bills. The membership of the Technical Committee consisted of representatives of the Bank of Ghana, Narcotics Control Board, Ministries of the Interior, Finance, and National Security, Serious Frauds Office, Police, Revenue Agency Board and a private financial consultant. After producing the draft law, the committee seems to have fizzled. Other initiatives taken to strengthen the AML framework even before the AML Bill was passed into law included the Know Your Customer Guidelines of 2005 and the Foreign Exchange Act 2006. Two important provisions of the latter are the authority granted to the Bank of Ghana to impose restrictions on the import and export of foreign exchange, and the requirement that all foreign exchange payment transactions in Ghana must be through a bank. The coming of an AML law in Ghana has suffered inordinate delay, given that the country has been in the forefront of political and economic reforms in Africa. Nonetheless, now that the law has been passed, the country can look forward to working hard for its effective implementation.