FATF Blacklist Threatened Banks

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Accra, Wednesday November 7, 2012

Some commercial banks in the country lost substantial revenues as a result of the closure of the accounts of some of their customers when news got around that Ghana had been blacklisted by Paris-based Financial Action Task Force (FATF).

Within the nine months that the country was blacklisted, pressure mounted on the commercial banks from their corresponding foreign banks to enforce even stricter transaction procedures.

Richard Kumadoe, a fraud and money laundering prevention strategist, who disclosed this to CITY & BUSINESS GUIDE recently, said the action of the FATF presented a lot of difficulties to the econmy with the financial institutions being the hardest hit as funds coming in and out of Ghana had to be subjected to an enhanced scrutiny and seizure.

“When a country is blacklisted, all transactions to and from that country are carefully scrutinised (enhanced Due Diligence) by their corresponding banks (foreign counterparts) as a result of being a high risk jurisdiction and that was the case of many of the commercial banks in Ghana for the nine-month period.”

Ghana was given a reprieve by FATF after it was found to have met some requirements.

Ghana was blacklisted in February because there were “some deficiencies in the implementation of Ghana’s Anti-Money Laundering and Combating Terrorist Financing (AML/CFT) Framework and Procedures.”

According to Mr Kumadoe, Ghana has now been placed on a considerate watch list by FATF pending further inspection in January 2013 and that should improve financial transactions in the country.

He called for an effective collaboration and coordination of efforts in AML/CFT training and awareness creation, efficient adherence of KYC/CDD framework and procedures by financial institutions to avert what he called “the worst scenario.”

Mr. Kumadoe also called on all stakeholders, especially the Financial Intelligence Centre (FIC), Bank of Ghana (BoG), the Judiciary, Ghana Police Service and EOCO to effectively discharge their duties in accordance with the existing AML/CFT legislations.

He again implored the Compliance Association of Ghana to be proactive in the process of transaction monitoring and the identification of AML/CFT “Red flags” for effectual prevention of sanctions and penalties.

FATF is an inter-governmental body established in 1989. Its objectives are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

As a policy-making body, FATF works to generate the necessary political will to bring about national legislative and regulatory reforms.

It also monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures and promotes the adoption and implementation of appropriate measures globally.

In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.