7 February 2014

Ghana: Govt Tightens Regulation On Money Laundering

Ghana yesterday took a giant step towards tightening its regulations on money laundering, with Parliament adopting the Anti-Money Laundering (Amendment) Bill 2013 report from its sub-committee on Constitutional and Legal Affairs.

The country is at the crossroads of amending its existing law to conform to international best practices after being blacklisted and later whitelisted by the Financial Action Task Force (FATF) in 2012 same year.

The objective of the amendment, among many others, according to officials, is to make the law consistent with international standards set by the Financial Action Task Force (FATF) and to improve the legal regime to enhance financial integrity in the country.

This will make Ghana better positioned to fight money laundering and to make it worthy of admission into the prestigious EGMONT Group to foster collaboration and facilitate exchange of financial intelligence.

The Bill also seeks to strengthen the Financial Intelligence Center of Ghana, in its operations in combating money laundering, terrorist financing and other transnational organized crimes more effective.

Money laundering occurs when proceeds of crime or fraud are concealed through series of processes, mostly through financial institutions, to look genuine.

Terrorist financing, on the other hand, is when individuals and/or institutions fund the activities and operations of groups listed by the United States of America as terrorists.

Ghana in 2008 enacted its Anti-Money Laundering Act, 2008, Act 749, to combat money laundering and track criminals and financiers of terrorist activities.

Three years later (2011), the law was revised, following the passage of a Legal Instrument (LI) by the country's legislature to augment the efforts of the security agencies in combating crime and corruption.

That instrument provided ample measures to verify the identities of persons involved in money laundering and the detection of their proceeds for unlawful activities.

However, three years down the line, the law has been found not to be consistent with international best practices.

The country's definition on money laundering is also said to be too narrow which is inhibiting the work of the Attorney-General's Department to enforce actions relating to money laundering at the courts.

"Because of the scope, the judges are often not certain that the offenses that we often refer to, are money laundering," noted a deputy Attorney-General, Dr. Dominic Ayini, in a brief to Parliament on the subject matter.

Another grey area identified in the Act is the non-classification of transnational organized crime such as terrorist financing among offenses classified under the law.

"Section 5(c) of the Anti-Money Laundering Act, 2008, Act 749, gives the Financial Intelligence Center the power to exchange information with financial intelligence units in other countries as regard to money-laundering activities and similar offenses.

"However, there was no definition for similar offenses in Section 51 of the Act, making it impossible to classify transnational organised crime such as terrorist financing as part of similar offenses," bemoaned Chair of the Parliamentary sub-Committee on Constitutional and Legal Affairs, Alban Bagbin.

The existing law, according to Mr. Bagbin, also conflicts with Article 19(11) of the Constitution hence, the need to harmonize it to be consistent with the country's legal framework.

"In Article 19(11) of the Constitution, it provides that no person shall be convicted of any criminal offense unless it is defined and the penalty for it prescribed in a written law.

"The implication is that the Financial Intelligence Center has no legal basis to exchange intelligence on terrorist financing with financial intelligence units in other jurisdictions," he noted.

Some Members of Parliament who contributed to the adoption of the motion welcomed the move by the government since money laundering was becoming the order of the day.

"It is important we begin to align our laws to the rest of the world to meet international best practices," noted Abdul-Rashid Hassan Pelpuo, MP for Wa Central.

MP for Offinso South, Ben Abdallah Banda said the country had not been able to become a member of the EGMOND Group because of the deficiencies embedded in the existing law and argued that the amendment would clamp down on terrorist financing and money-laundering.

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