GHANAIAN AML/CFT COMPLIANCE LAWS Presented by ERM Institute Saturday, 21st February, 2015

Overview of Ghana’s AML/CFT Regime GHANAIAN AML/CFT COMPLIANCE LAWS Overview of Ghana’s AML/CFT Regime

GHANAIAN AML/CFT COMPLIANCE LAWS OVERVIEW CONT’D

Anti-Money Laundering Act, 2008 (Act 749) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Act, 2008 (Act 749) The Anti-Money Laundering Act, 2008 (Act 749) which is the foremost AML law among other things: • Defines Money Laundering as a crime and stipulates what constitutes aiding and abetting of the crime of money laundering. • Stipulates penalties of up to ten (10) years of imprisonment for the offence of money laundering. • Established the Financial Intelligence Centre (FIC) as the main AML watchdog in the country.

Anti-Money Laundering Act, 2008 (Act 749) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Act, 2008 (Act 749) • Provides a list of accountable institutions and the records to be kept by those accountable institutions including the duration of those records. • Allows the FIC to request for information from accountable institutions including banks. • Provides for Suspicious Transaction Report (STR) by accountable institutions and the reporting of electronic transfers. • Requires the formulation and implementation of internal rules for purposes of AML by accountable institutions. • Provides for the training of employees in AML and the mandatory appointment of a compliance officer to ensure observance of obligations of accountable institutions under the law. • Allows for investigation of suspected offences by investigating state bodies and the freezing of transactions or accounts. • Prescribes offences and penalties in relation to compliance and provides for referral of accountable institutions to the Bank of Ghana for administrative sanctions.

Anti-Money Laundering Regulations, 2011( LI 1987) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Regulations, 2011( LI 1987) The major highlights of the Regulations are as follows: • Regulation 1 stipulates the need for internal rules on AML/CFT. These internal rules include programmes of risk assessment for AML/CFT, control policy, monitoring policy, Enhanced Due Diligence (EDD), training of employees and establishment/maintenance of a manual of compliance procedures related to AML. • Regulation 2 stipulates the need for internal rules related to establishment and verification of identity of clients of accountable institutions. It also provides for disciplinary steps against relevant staff for non-compliance with AML/CFT regime. • Regulation 3 provides for internal rules related to record keeping.

Anti-Money Laundering Regulations, 2011( LI 1987) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Regulations, 2011( LI 1987) • Regulation 4 provides for internal rules related to reporting suspicious and unusual transactions. • Regulation 5 mandates the appointment of an AML Reporting Officer by accountable institutions including banks. • Regulations 8 to 10 discusses Politically Exposed Persons (PEPs) and the way they should be treated by accountable institutions. • Regulation 11 stipulates the need for a conduct of due diligence on existing clients and Regulation 12 stipulates the update of records by acc. institutions.

Anti-Money Laundering Regulations, 2011( LI 1987) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Regulations, 2011( LI 1987) Regulation 13 provides for general rules on identification of clients. • Regulations 14 to 20 discuss the verification of individuals whilst Regulations 21 to 31 discusses the verification of legal persons. • Regulations 32 to 36 discuss the reporting of suspicious or unusual transactions. • Regulation 37 discusses the use of reference accounts by financial institutions. • Regulation 38 stipulates guidelines to be issued by the FIC.

Anti-Money Laundering Regulations, 2011( LI 1987) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Money Laundering Regulations, 2011( LI 1987) • Regulation 39 mandates the FIC to provide feedback to accountable institutions on pertinent issues such as STRs. • Regulation 42 makes FIC a member of the Egmont Group of Financial Intelligence Units (FIU), a forum for FIUs around the world to improve cooperation in the fight against ML and FT. • Regulation 43 allows the FIC to review AML measures and CFT systems in the country on a regular basis in consultation with supervisory bodies. • Regulation 44 prescribes offences and penalties for the contravention of these Regulations by accountable institutions.

GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Terrorism Act, 2008 (Act 762) and the Anti-Terrorism (Amendment) Act, 2012 (Act 842) Act 762 and its amendment 842 were based to help in the fight against terrorism. Among other things, the Anti-terrorism Act and its amendment: • Defines what constitutes terrorism with respect to banking. • Allows Ghana’s High Court to order funds suspected to be related to terrorist activity to be frozen immediately. • Stipulates persons holding funds of terrorist entities to report without delay to the FIC of frozen funds. • Stipulates clearly that provision of financial services for commission of a terrorist act is an offence. • Provides for Regulations to its effective implementation.

Anti-Terrorism Regulations, 2012 (L.I. 2181) GHANAIAN AML/CFT COMPLIANCE LAWS Anti-Terrorism Regulations, 2012 (L.I. 2181) The Anti-Terrorism Regulations, 2012 (L.I. 2181) among other things: • Prohibits the provision of financial or other related services to specified entities. • Specifies what will necessitate an organization to be described as associating with acts of terrorism or proliferation of Weapons of Mass Destruction (WMD). • Allows for the freezing of funds of a person engaged in terrorism or proliferation of WMD. • Places a duty on accountable institutions to report on funds frozen by order of the High Court to the FIC. • Places a duty on accountable institutions to report on suspicious or unusual transactions to the FIC.

GHANAIAN AML/CFT COMPLIANCE LAWS BOG/FIC) Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Guideline, 2011. Following the enactment of the Anti-Money Laundering Act, 2008 (Act 749), the Anti-Terrorism Act, 2008 (Act 762) and the subsequent passage of the Anti-Money Laundering Regulations, 2011 (L.I.1987), Ghana is now giving necessary attention to the fight against money laundering and terrorist financing. The benefit of the Anti-Money Laundering Act will not be realized unless there is effective implementation of the collaborative measures being adopted by the Bank of Ghana (BOG) and the Financial Intelligence Centre (FIC) as well as compliance by licensed financial institutions. It is against this background that the BOG and FIC in accordance with section 6(d) of Act 749 and Regulation 38 of L.I.1987 developed the Guideline for financial institutions licensed by the Bank of Ghana.

GHANAIAN AML/CFT COMPLIANCE LAWS BOG/FIC) Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Guideline, 2011. The Guideline has incorporated essential elements of the AML Act and Regulations, relevant FATF-Recommendations, the sound practices of the Basle Committee on Banking Supervision and other international best practices on Anti-Money Laundering and the Combating of the Financing of Terrorism (AML/CFT). To provide a further guide and to avoid ambiguity, the Guideline on KYC is also provided to assist financial institutions in their implementation of the Guideline.

GHANAIAN AML/CFT COMPLIANCE LAWS BOG/FIC) Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Guideline, 2011. The Guideline covers among others the following key areas of AML/CFT policy; Reporting Officer designation and duties; the need to co-operate with the supervisory authority; customer due diligence; monitoring and responding to suspicious transactions; reporting requirements; record keeping; and AML/CFT employee training program. Financial institutions are exposed to varying money laundering risks and serious financial and reputational damage if they fail to manage these risks adequately. Diligent implementation of the provisions of this Guideline would not only minimize the risk faced by licensed financial institutions of being used to launder the proceeds of crime but also provide protection against fraud and reputational and financial risks. In this connection, the affected institutions are directed to adopt a risk-based approach in the identification and management of their AML/CFT risks.

GHANAIAN AML/CFT COMPLIANCE LAWS BOG/FIC) Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Guideline, 2011. Ghanaian financial institutions are also reminded that AML/CFT laws in all the jurisdictions in which they operate should not only designate money laundering and predicate offences but should also prescribe sanctions for non-compliance with the relevant laws and regulations on customer due diligence, non-rendition of prescribed reports and not keeping of appropriate records. It is, therefore, in their best interest to entrench a culture of compliance which would be facilitated by the Guideline. The Guideline is structured in two, Part A made up of the new AML/CFT Directives while Part B provides guidance on KYC (FIC/BOG)

GHANAIAN AML/CFT COMPLIANCE LAWS (SEC/FIC) (AML/CFT) Compliance Manual for Capital Market Operators, 2011. Under Section 9 (b) (d) (i) and (k), of the Securities Industry Act 1993, PNDCL 333 (as amended) (SIA), empowers the Commission to protect the integrity of the Securities Market against all forms of abuses. Furthermore the Anti-Money Laundering Act, 2008, Act 749 and its accompanying regulation, Anti-Money Laundering Regulations, 2011, LI 1987 and the Anti-Terrorism Act, 2008, Act 762 requires supervisors and regulators of relevant institutions in Ghana including regulators of financial institutions to give guidance to their regulated entities on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

GHANAIAN AML/CFT COMPLIANCE LAWS (SEC/FIC) (AML/CFT) Compliance Manual for Capital Market Operators, 2011. Given the prominence that financial crimes especially money laundering (ML) and terrorist financing (FT) have assumed in International financial markets, and the risks they pose to the financial markets globally and to Ghana in particular, the need for a comprehensive effort to fight this menace has been realized. It is against this background that the Securities and Exchange Commission (SEC) and the Financial Intelligence Center (FIC) in accordance with Section 6(d) of Act 749 and Regulation 38 of L.I.1987 have developed this manual to guide Capital Market Operators (CMOs) to enhance their monitoring and surveillance systems with a view to preventing, detecting and responding appropriately to ML and FT risks.

GHANAIAN AML/CFT COMPLIANCE LAWS (SEC/FIC) (AML/CFT) Compliance Manual for Capital Market Operators, 2011. This manual is also designed to manage the risks faced by CMOs on the laundering of the proceeds of crime and will also provide protection against fraud, reputational and other risks. Consequently, all CMOs are required to adopt a risk – based approach in the identification and management of their AML/CFT risks in line with the requirements of this manual.

GHANAIAN AML/CFT COMPLIANCE LAWS (SEC/FIC) (AML/CFT) Compliance Manual for Capital Market Operators, 2011. This manual has been enriched by the Financial Action Task Force (FATF) Recommendations and international best practice. The Anti-Money Laundering Act, 2008(Act 749) and its accompanying regulation, Anti-Money Laundering Regulations, 2011(LI 1987) and the Anti-Terrorism Act, 2008, Act 762 have prescribed sanctions for non-compliance. Some of the provisions cover clients due diligence issues, non-rendition of prescribed reports as well as failure to keep appropriate records. It is, therefore, in the best interest of CMOs to ensure compliance at all times with the prescriptions contained herein. The manual must be read in conjunction with the Anti-Money Laundering Act, 2008(Act 749) and its accompanying regulation, Anti-Money Laundering Regulations, 2011(LI 1987) and the Anti-Terrorism Act, 2008(Act 762).(SEC/FIC 2011)

(NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. GHANAIAN AML/CFT COMPLIANCE LAWS (NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. The NIC/FIC Guidelines have incorporated essential elements of the AML Act and Regulations, relevant FATF-Recommendations, the sound practices of the International Association of Insurance Supervisors (IAIS) and other international best practices on Anti-Money Laundering and the Combating of the Financing of Terrorism (AML/CFT).

(NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. GHANAIAN AML/CFT COMPLIANCE LAWS (NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. To provide a further guide and to avoid ambiguity, the Guideline on KYC is also provided to assist insurance practitioners in their implementation of these Guidelines. The Guidelines cover the following key areas of AML/CFT policy; Reporting Officer designation and duties; the need to co-operate with the supervisory authority; customer due diligence; monitoring and responding to suspicious transactions; reporting requirements; record keeping; and AML/CFT employee training program.

(NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. GHANAIAN AML/CFT COMPLIANCE LAWS (NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. Insurance practitioners are exposed to varying money laundering risks and serious financial and reputational damage if they fail to manage these risks adequately. Diligent implementation of the provisions of this Guideline would not only minimize the risk faced by licensed insurance practitioners of being used to launder the proceeds of crime but also provide protection against fraud and reputational and financial risks. In this connection, the affected institutions are directed to adopt a risk-based approach in the identification and management of their AML/CFT risks.

(NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. GHANAIAN AML/CFT COMPLIANCE LAWS (NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. Ghanaian insurance practitioners are also reminded that AML/CFT laws in all the jurisdictions in which they operate should not only designate money laundering and predicate offences but should prescribe sanctions for non-compliance with the relevant laws and regulations on customer due diligence, non-rendition of prescribed reports and not keeping of appropriate records. It is, therefore, in their best interest to entrench a culture of compliance which would be facilitated by the Guidelines.

(NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. GHANAIAN AML/CFT COMPLIANCE LAWS (NIC/FIC) (AML/CFT) Compliance Guidelines, 2011. The Guidelines are structured in two, Part A made up of the new AML/CFT Directives while Part B provides guidance on KYC.(NIC/FIC 2011)

GHANAIAN AML/CFT COMPLIANCE LAWS The recently passed Anti-Money Laundering (Amendment) Act, 2014 was passed mainly: • To clarify some inconsistencies and conflicts between the Anti- Money Laundering Act, 2008 (Act 749) and Article 19(11) of the 1992 Constitution. • To expand the country’s definition on Money Laundering since the definition in Act 749 is said to be too narrow, inhibiting the work of the Attorney-General’s Department to enforce actions relating to Money Laundering at the courts. To enable the country’s Financial Intelligence Centre (FIC), have the requisite framework to join the prestigious Egmont Group of Financial Intelligence Units(FIUs). The Egmont Group is an informal network of Financial Intelligence Units for the stimulation of international co-operation against Money Laundering. AML (AMENDMENT), 2014 (ACT 874)

GHANAIAN AML/CFT COMPLIANCE LAWS AML (AMENDMENT), 2014 (ACT 874) Prescribes administrative sanctions for violations Prescribes sanctions of up to 60,000 Ghana Cedis and 10 years imprisonment for violations of AML/CFT laws.