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Ghana becomes second African country to join FATF

Ghana aims to be a member of the Financial Action Task Force (FATF), a global inter-governmental anti-money laundering and terrorist financing watchdog organisation.

This follows the delisting of the country from the FATF’s grey list of countries at a plenary meeting on June 23, 2021.

The FATF grey list comprises countries with a much higher risk of money laundering and terrorism financing but who are formally committed to working with the FATF to develop action plans.

These action plans address the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies of such grey list countries.

If successful, Ghana will be the second African country of the 39-member anti-money laundering and counter-terrorism organisation.

Presently, South Africa is the only member from the continent.

The Finance Minister, Ken Ofori-Atta, made known the decision of the country to join the anti-money laundering and counter-terrorism organisation at a media briefing in Accra.

“With these achieved, Ghana will be applying to be a member of the FATF organisation. Right now, only South Africa is a member of the 39 members, and we will hopefully be the second,” he noted

The Finance Minister also indicated the country’s readiness in supporting other African countries to be removed from the money laundering and terrorist financing list.

Ghana removed from FATF grey list

Ghana was removed from the Financial Action Task Force money-laundering and terrorist list of countries a week ago, after satisfactorily completing the action plan in a report by the international corporation review group.

By this decision, FATF and, for that matter, the international community, has renewed its confidence in Ghana’s anti-money laundering and countering the financing of terrorism regime.

This comes as a relief for the country considering the economic consequences suffered by countries that are grey listed. Removal from the list also boosts the confidence and integrity of the country’s financial environment as well as foreign direct investment (FDI).

Mr Ofori-Atta has therefore assured that the country would consolidate and build upon the gains of the reforms.

Additionally, it would provide the necessary support to strengthen the Financial Intelligence Centre in executing its mandate.

“The Ministry of Finance, Bank of Ghana (BoG) and the Ghana Revenue Authority (GRA) will ensure that adequate and sustainable resources are deployed to ensure the integrity of AML/CFT regime in Ghana,” he said.

Background to Ghana’s greylisting

In 2016, the Inter-Governmental Action Group against Money Laundering and Terrorist Financing in West Africa (GIABA) subjected Ghana to a second round of mutual evaluation.

Ghana was the first among her peers in the West African sub-region to have gone through the second round of mutual evaluation.

Although it had progressed over an earlier one in 2009, there were still significant gaps that needed to be addressed. The country was placed under observation by the International Cooperation Review Group (ICRG).

The ICRG and Ghana developed a two-year action plan spanning 2019 – 2021 with timelines to address the deficiencies.

European Union places Ghana on money laundering list

On May 7, 2020, the EU announced that it had placed 12 countries on the list of jurisdictions with weak or deficiencies in Anti Money Laundering and Terrorism financing laws.

The countries were Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe.

In Ghana’s situation, the action or directive was supposed to kick in from October 2020.

According to the EU, the weaknesses identified in these countries posed a serious risk to their financial system, hence the action, based on recommendations from the Financial Action Task Force.

However, the Finance Ministry described the action as surprising and unfortunate, especially when the government claimed that they had taken steps to address the problems outlined by the task force.

The action affected some banks with affiliates in Europe. The banks came under serious scrutiny due to some trans-border transactions.

Governor of the Bank of Ghana, Dr Ernest Addison, admitted the negative impact of the development on the financial sector in Ghana.

READ ALSO: European Union To Remove Ghana From Money Laundering List

In May 2021, the European Union announced that it would remove Ghana from the list of deficient countries in Anti-Money Laundering and Terrorism Financing.

This is because the country had made progress in taking corrective measures to deal with global money laundering and terrorist financing watchdog FATF issues.

After a meeting between President Nana Akufo-Addo and the President of the European Council, Charles Michel, the announcement was made as part of a working visit to Belgium.

Director of Communications at the Office of the President, Mr Eugene Arhin, explained that deliberations on May 19 and May 20 were fruitful and Ghana was likely to be taken off the red list within a month.

On Friday, May 21, he said it is expected that the FATF will make a pronouncement in June 2021.

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