Weak anti-money laundering laws impeding FDIs

Mark Assibey-Yeboah

There is a need for the country to amend its anti-money laundering laws and comply with the Financial Action Task Force (FATF) recommendations in order to attract needed foreign direct investments, a report by the Finance Committee of Parliament has stated.

According to the report, which was presented by the Committee’s Chair Mark Assibey Yeboah, the current situation – whereby Ghana is classified on the FATF ‘grey-list’ – poses a threat for businesses and foreign investments into the country.

“The Committee observed that while the grey-list is not a black-list, it serves as a major disincentive for businesses and large corporations as these entities are subjected to stricter accountability rules when dealing with grey-listed countries.

“These accountability requirements tend to increase the cost of doing business with grey-listed countries. Businesses therefore tend to shy away from such countries, and this negatively impacts on foreign direct investments flow,” the report noted.

In 2009, Ghana was blacklisted by FATF as the result of a mutual evaluation exercise on Ghana by the Inter-Governmental Action Group against money laundering in West Africa (GIABA) in respect of the FATF recommendations.

Following this exercise, government took measures to address some of the deficiencies – which subsequently put the country in the ‘grey-list’ after a second round of exercises that was conducted in 2016.

This notwithstanding, Ghana still has not met the revised FATF methodology, as the report of the second evaluation exercise identified some strategic deficiencies in the anti-money laundering regulatory framework.

In order to address these deficiencies and comply with the recommendations, government has therefore decided to review relevant laws – key among which is the current Anti-Money Laundering Act, 2007 (Act 749).

The Anti-Money Laundering bill, 2020, which is currently at the consideration stage in Parliament, seeks to amend and consolidate the laws relating to money laundering.

The bill seeks to, among others, grant supervisory mandate to the Financial Intelligence Centre to provide for an effective, proportionate and dissuasive sanctions regime for various money laundering infractions; and to clearly designate an anti-money laundering and counter financing of terrorism for designated non-bank financial businesses and professions, and to provide for powers and responsibilities of various anti-money laundering and counter financing of terrorism regulatory and suspensory regimes.

It also contains elaborate provisions on key areas, particularly the assessment of risks, national cooperation and coordination, customer due diligence and reporting suspicious transactions.

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