In years past, the economies of West African countries were marred with large-scale uncertainties. The preponderance of corruption, bribery, counterfeiting and many other unwholesome criminal acts had ebbed the confidence of investors in bringing their hard-earned capital into our countries. With such a low level of participation in international trade, West African countries had a low development index. In such a dire situation, many citizens of West African countries are mired in poverty, therefore becoming more susceptible to manipulations of drug lords, money launderers, and financiers of terrorism and the proliferation of weapons of mass destruction.
However, with the introduction of anti-money laundering (AML) enforcement and monitoring in the region, especially with the establishment of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), the murky waters are becoming clearer and West Africa is becoming more acceptable to the international world as being open, and in fact, good for business. This is in no small measure due to the vigorous monitoring of AML regimes in ECOWAS member States, and the instituting of measures to deter money launderers and criminals from exploiting loopholes in our countries to carry out their nefarious activities.
What has made the success more enduring is the prevalence of a system that periodically evaluates countries’ anti-money laundering and combating the financing of terrorism (AML/CFT) regimes. When such evaluation occurs, it usually measures two key components: One: Are there laws that criminalise money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction? Two: To what extent are AML/CFT policies effective in combating money laundering and terrorist financing crimes?
The mutual evaluation process assesses countries’ level of compliance with the Financial Action Task Force (FATF) Recommendations, and thus enables GIABA and its development partners to determine the type of technical assistance required by Member States to improve measures against money laundering and terrorist financing. The Mutual Evaluation exercise is, therefore, of immense benefit to the assessed country as it provides information to the international community about the country’s financial, governance and legal frameworks, and therefore creates a platform for inflow of foreign direct investment.
At the forefront of the global anti-money laundering campaign is the Financial Action Task Force (FATF). In February 2012, FATF reviewed its erstwhile 40+9 Recommendations into a consolidated FATF Recommendations, which addresses new and emerging threats, clarify and strengthen many of the existing obligations while maintaining stability and rigour in the Recommendations. The FATF Recommendations set out a comprehensive and consistent framework of measures which countries should implement in order to combat money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. Additionally in 2013, the FATF adopted a new Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems. Both the Recommendations and Methodology are the yardsticks against which countries’ level of compliance to international standards and efficacy of their AML/CFT regimes are measured.
The Mutual Evaluation is the peer review mechanism by which countries’ systems are assessed on an ongoing basis, regarding levels of implementation of the FATF Recommendations, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.
From 2007 to 2013, GIABA conducted the First Round of Mutual Evaluation Cycle of ECOWAS countries. The results of the first round of Mutual Evaluation showed deficiencies in member States’ AML/CFT systems. Since then, different actions have been taken to buoy up the political goodwill, legal framework, and human capacities needed to fight money laundering and terrorist financing. These actions have shown palpable improvement in West Africa’s AML/CFT regimes. For instance, Financial Intelligence Units of thirteen (13) West African countries have been admitted into the Egmont Group of FIUs, while Ghana and Nigeria were removed from the FATF Public Statement. Nigeria is currently seeking full membership of FATF. These are few of the achievements recorded between the end of the first round of the Mutual Evaluation and the commencement of the Second Round.
Many countries of West Africa are now due for the Second Round of the Mutual Evaluation Cycle of their AML/CFT regimes. At its meeting in Niger in 2014, the GIABA Ministerial Committee, comprising the three ministers of Finance, Justice and Interior from each member State approved the calendar of the Second Round of Mutual Evaluation. Republic of Ghana is starting the process with an on-site visit conducted in September 2016. Others would follow in due course.
At the end of the exercise, each evaluated country is rated depending on the efficacy of measures put in place to detect, prevent or sanction cases of money laundering and terrorist financing. Ratings range from compliant, largely compliant, partially compliant, to non-compliant. A report is issued after completion of the mutual evaluation. It is then discussed and adopted at GIABA Plenary.
Key to the high standard of mutual evaluation is the training of assessors who would form the core of the panel to review the evaluated country’s level of compliance of international AML/CFT standards, and the efficacy of those measures. This is why the planned regional training workshop on Revised FATF Methodology for Mutual Evaluation Assessors to hold at the Holiday Inn Airport Hotel Accra, Ghana from Monday March 20 to Friday March 24, 2017 is a step in the right direction. The training workshop, a second in the series, which will be jointly delivered by GIABA and FATF hopefully will ensure a consistent high standard of training across the Global Network to enhance the quality of potential mutual evaluation assessors, such that West African assessors will conduct mutual evaluations within West Africa, and if possible participate in mutual evaluations of FATF and other FATF Style Regional Bodies (FSRBs).
Such training will expectedly provide West Africa with a pool of efficient and effective assessors for the GIABA Second Round of Mutual Evaluation; increase the number of trained assessors in ECOWAS member States; improve the quality of on-site mutual evaluation assessment; as well as ensure the production of objective and accurate mutual evaluation reports of high standard in a timely manner.
If as many West African states can get a rating of as much compliant and largely compliant as possible in their Mutual Evaluations, then it may be said that the successes of anti-money laundering and combating the financing of terrorism (AML/CFT) regimes in the region can only be enhanced.
