Anti-Money Laundering & Financial Crime
COMPLIANCE STANDARDS FOR ANTIMONEY LAUNDERING AND
COMBATING THE FINANCING OF
TERRORISM
Presented by
ERM Institute
Saturday ,February 14, 2015
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Part II: Compliance Standards for AML/CFT
COURSE OBJECTIVES
By the end of this course, course attendants should be
acquainted with:
• The Financial Action Task Force( FATF) and its
Recommendations
• The European Union Directives on Money Laundering
• Regional and other International Initiatives on Money
Laundering
• Key U.S. Legislative and Regulatory Initiatives Applied to
Transactions Internationally
• Overview of Ghana’s AML/CFT Regime
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Part II: Compliance Standards for AML/CFT
FINANCIAL ACTION TASK
FORCE AND ITS
RECOMMENDATIONS
• Origin & Formation of FATF: G-7 launched it
in 1989, based at the OECD in Paris.
• Members & Observers: Currently 36
members( 34 jurisdictions and 2 regional
organizations, i.e. GCC, EC)
• 29 International and regional organizations
that are Associate Members or Observers of
FATF
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Part II: Compliance Standards for AML/CFT
CRITERIA FOR MEMBERSHIP
OF FATF
• Two-step criteria must be met for a jurisdiction
to become a Member
• Step 1- Fundamental criteria
– Fundamental criteria of membership requires the
jurisdiction to be strategically important
– Also, the other fundamental criteria is that the
jurisdiction becoming a must enhance FATF’s
geographic balance
• Step 2- Technical/other criteria : Written
commitment at political level
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Part II: Compliance Standards for AML/CFT
OBJECTIVES OF FATF
• Spreading the anti-money laundering
message worldwide
• Monitoring implementation of the FATF
Recommendations among FATF members
• Reviewing money laundering trends and
countermeasures
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Part II: Compliance Standards for AML/CFT
OBJECTIVES OF FATF
• Spreading the anti-money laundering
message worldwide
• Monitoring implementation of the
FATF Recommendations among FATF
members
• Reviewing money laundering trends
and countermeasures
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Part II: Compliance Standards for AML/CFT
FATF 40 RECOMMENDATIONS
• Recommendations first issued in 1990;
revised in 1996, 2003 and 2012.
Interpretative Notes added.
• After 9/11, FATF adopted Nine(9) Special
Recommendations on Terrorist Financing
• 2012 revisions combined the Nine(9) Special
Recommendations into the 40
Recommendations
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Part II: Compliance Standards for AML/CFT
FATF 40 RECOMMENDATIONS
• FATF’s Recommendations have become the
world’s blueprint for effective national and
international AML and CTF related controls
• The IMF & World Bank recognized the FATF
Recommendations as the international
standard for combating money laundering
and terrorist financing
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Part II: Compliance Standards for AML/CFT
COUNTERMEASURES AGAINST
ML/TF PROVIDED BY 40
RECOMMENDATIONS
• These measures cover:
– The identification of risks and development of
appropriate policies
– The criminal justice system and law
enforcement
– The financial system and its regulation
– The transparency of legal persons and
arrangements
– International cooperation
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Part II: Compliance Standards for AML/CFT
KEY HIGHLIGHTS OF 40
RECOMMENDATIONS
• Risk-Based Approach to issues of ML/TF
• Designated Categories of Offenses that
serve as ML predicates
• Terrorist Financing and Financing of
Proliferation should be criminalized
• Knowledge and Criminal Liability for ML
offenses as a result of “wilful blindness”
• Customer Due Diligence (CDD) measures
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Part II: Compliance Standards for AML/CFT
KEY HIGHLIGHTS OF 40
RECOMMENDATIONS
• Additional Customer Due Diligence on
Specific Customers and Activities
• Suspicious Transaction Reporting
• Expanded Coverage of Industries to include
Casinos, Real Estate Agents, Lawyers, etc.
• Transparency and Beneficial Ownership of
Legal Persons and Arrangements to be
scrutinized
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Part II: Compliance Standards for AML/CFT
KEY HIGHLIGHTS OF 40
RECOMMENDATIONS
• Powers and Responsibilities of Competent
Authorities overseeing financial institutions
to be enhanced and monitored
• International Cooperation in ML/TF
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Part II: Compliance Standards for AML/CFT
NON-COOPERATIVE
COUNTRIES
• FATF “names and shames” countries that it
judges have inadequate AML controls or did not
cooperate in global ML effort
• FATF have been identifying these “NonCooperative Countries and Territories”(NCCTs)
• The goal of the NCCT process was to reduce the
vulnerability of the financial system to ML by
ensuring that proper standards are kept
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Part II: Compliance Standards for AML/CFT
ASSESSMENT OF COUNTRIES
• Assessment of countries for purposes of
classification as NCCTs or otherwise cover
the following four(4) broad areas:
– Loopholes in financial regulations
– Obstacles raised by other regulatory
requirements
– Obstacles to international cooperation
– Inadequate resources for preventing and
detecting money laundering activities
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Part II: Compliance Standards for AML/CFT
ASSESSMENT OF COUNTRIES
• However in April, 2004, the IMF & World Bank adopted
on a permanent basis, a pilot program they had that
assesses a nation’s compliance with international AML
and anti-TF standards
• The adopted program put an end to FATF’s practice of
publicizing NCCTs
• While the original list of NCCTs no longer exists, in 2009
FATF issued a statement on high-risk and noncooperative jurisdictions.
• Further, in March 2010, FATF issued guidance concerning
how it would identify certain high-risk countries and set
forth the countries’ specific strategic AML deficiencies
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Part II: Compliance Standards for AML/CFT
THE BASEL COMMITTEE ON
BANKING SUPERVISION
• Established by the central bank governors of the G10 countries in 1974
• Aim is to promote sound supervisory standards
worldwide
• Committee’s secretariat provided by the Bank for
International Settlements(BIS) in Basel, Switzerland
• BIS is an international organization that fosters
cooperation among central banks and other agencies
in pursuit of monetary and financial stability.
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Part II: Compliance Standards for AML/CFT
THE BASEL COMMITTEE ON
BANKING SUPERVISION
• BIS services are provided exclusively to central
banks and international organizations
• Banking supervisors have a role in ensuring that
banks have procedures in place, including strict
AML policies.
• This helps avoid involvement with drug traders
and other criminals, as well as in the general
promotion of high ethical and professional
standards in the financial sector
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Part II: Compliance Standards for AML/CFT
INPUTS OF THE BASEL
COMMITTEE
• The Basel Committee over the years has set out several
principles and guidelines to prevent the use of the
banking sector for ML
• It has set out principles w.r.t:
– Customer identification
– Compliance with laws
– Conformity with high ethical standards and local laws and
regulations
– Full cooperation with national law enforcement to the extent
permitted without breaching customer confidentiality
– Staff training
– Record keeping and audits
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Part II: Compliance Standards for AML/CFT
INPUTS OF THE BASEL
COMMITTEE
• The Committee also has a paper which identified seven(7)
specific customer identification issues:
– Trust, nominee and fiduciary accounts
– Corporate vehicles, particularly companies with nominee
shareholders or entities with shares in bearer form
– Introduced businesses
– Client accounts opened by professional intermediaries, such as
“pooled” accounts managed by professional intermediaries on
behalf of entities such as mutual funds, pensions funds and money
funds
– Politically Exposed Persons
– Non-face-to-face customers, i.e., customers who do not present
themselves for a personal interview
– Correspondent banking
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Part II: Compliance Standards for AML/CFT
INPUTS OF THE BASEL
COMMITTEE
• The four(4) key elements of KYC, according to this
paper are:
– Customer identification
– Risk management
– Customer acceptance; and
– Monitoring
The Committee has subsequently issued several guidelines
on customer identification and due diligence to help in the
fight against ML and other financial crimes
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Part II: Compliance Standards for AML/CFT
EUROPEAN UNION(EU)
DIRECTIVES ON MONEY
LAUNDERING(ML)
• FIRST DIRECTIVE
– First EU Directive on Prevention of the Use of the
Financial System for the Purpose of ML was adopted by
the Council of Europe in June 1991.
– Directive required EU member states to amend national
laws if necessary and also enact legislation to prevent
their domestic financial systems from being used for ML
– European law prevails over national law in the case of
directives
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Part II: Compliance Standards for AML/CFT
EUROPEAN UNION(EU)
DIRECTIVES ON MONEY
LAUNDERING(ML)
• FIRST DIRECTIVE
– These EU Directives have far more weight than
voluntary standards issued by groups such as the
Basel Committee or the FATF. However they apply
to only EU member states
– This first Directive was confined to drug trafficking,
as defined in the 1988 Vienna Convention. However,
member states were encouraged to extend the
predicate offenses to other crimes
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Part II: Compliance Standards for AML/CFT
EUROPEAN UNION(EU)
DIRECTIVES ON MONEY
LAUNDERING(ML)
• SECOND DIRECTIVE
– The EU agreed on a Second Directive that amended the
first in December 2001
– This Second Directive required stricter money
laundering controls across the continent of Europe
– ONLY Denmark, Germany, the Netherlands met the
agreed deadline of June 15, 2003 for implementation
– However, Ireland and Spain complied shortly afterwards
and other member states eventually followed
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Part II: Compliance Standards for AML/CFT
KEY FEATURES OF THE EU’S
SECOND DIRECTIVE
• Extended scope of First Directive beyond drugrelated crimes to all other serious crimes like
corruption and fraud against the financial interests of
the European Community
• Brought bureaux de change and money remittance
officers under AML coverage
• Stipulated that knowledge of criminal conduct can be
inferred from objective factual circumstances
• Provided a more precise and inclusive definition of
ML
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Part II: Compliance Standards for AML/CFT
KEY FEATURES OF THE EU’S
SECOND DIRECTIVE
• Widened the businesses and professions that
are subject to the obligations of the Directive to
include auditors, external accountants, tax
advisers, real estate agents, notaries and legal
professionals
• The Second Directive was a tremendous step
forward because its applicability included many
of the important financial centers of the world
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Part II: Compliance Standards for AML/CFT
KEY FEATURES OF THE EU’S
SECOND DIRECTIVE
• The Second Directive went well beyond
similar standards issued by other
organizations such as the UN and even FATF
• The Second Directive exceeded the norms
contained in U.S. law and regulations
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
• Third EU Directive on the Prevention of the Use
of the Financial System for the Purpose of ML
and TF was based on elements of FATF’s revised
40 Recommendations
• The Third Directive was adopted in 2005
• The Third Directive has been implemented by
all members, even though several members did
not meet the original implementation deadline
of December 15, 2007
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
• Third Directive in line with FATF
Recommendations extended the scope of the
directives. This was done by:
– Defining “money laundering” and “terrorist
financing” as separate crimes
– Extending customer identification and suspicious
activity reporting obligations to other corporate
entities
– Detailing a risk-based approach to customer due
diligence
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
– Protecting employees who report suspicions of
ML or TF
– Obligating EU member states to keep
comprehensive statistics regarding the use of
and results obtained from suspicious
transaction reports, etc
– Requiring all financial institutions to identify and
verify the “beneficial owner” of all accounts
held by legal entities or persons
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
• The Third Directive applies to:
–
–
–
–
–
–
Financial institutions
Auditors, external accountants and tax advisors
Legal professionals
Trust and company service providers
Estate agents
High value goods dealers who trade in cash over
15,000 Euro
– Casinos
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Part II: Compliance Standards for AML/CFT
DIFFERENCES BETWEEN
SECOND AND THIRD
DIRECTIVES
• Unlike Second, Third Directive specifically
includes the category of trust and company
service providers
• Secondly, Third Directive covers all dealers
trading in goods who trade in cash over 15,000
Euros, unlike Second Directive
• Finally, the definition of financial institution
includes certain insurance intermediaries not
included in the Second Directive
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
• There were three(3) main points of contention
with regard to the Third Directive:
– The definition of politically exposed persons (PEPs)
– The inclusion of lawyers among those who are
required to report suspicious activity
– The precise role of the so-called “comitology
committee” of the EU
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Part II: Compliance Standards for AML/CFT
THIRD DIRECTIVE
• Third Directive defined PEPs as “natural persons
who are or have been entrusted with prominent
public functions and the immediate family members,
or individuals known to be close associates, of such
persons
• Close associates must be identified only when their
relationship with a PEP is publicly known or when
the institution suspects there is a relationship.
• Finally, the EU Commission said persons should not
be considered PEPs after at least one year of not
being in a prominent position
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
• REGIONAL FATF-STYLE BODIES AND FATF ASSOCIATE
MEMBERS
– There are currently eight(8) regional FATF-style bodies
and FATF Associate Members
– There are currently 21 international organizations that
have FATF-Observer status
– Many FATF member countries are also members of
these bodies
– They are as follows:
• Asia/Pacific Group on Money Laundering (APG)
• Caribbean Financial Action Task Force (CFATF)
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
• Council of Europe Select Committee of Experts on the
Evaluation of Anti-Money Laundering Measures
(MONEYVAL)(formerly PC-R-EV)
• Eastern and Southern Africa Anti-Money Laundering Group
(ESAAMLG)
• Eurasian Group (EAG)
• Financial Action Task Force of South America against Money
Laundering (GAFISUD- Grupo de Accion Financiera de
Sudamerica)
• Intergovernmental Action Group against Money-Laundering in
West Africa (GIABA- Groupe Intergouvernemental d’Action
contre le Blanchiment d’Argent en Afrique de l’Quest)
• Middle East and North Africa Financial Action Task Force
(MENAFATF)
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
• ASIA/PACIFIC GROUP ON MONEY LAUNDERING(APG)
– An autonomous regional anti-money laundering body
– Established in February 1997 at the Fourth Asia/Pacific
Money Laundering Symposium in Bangkok, Thailand by
an agreement among its members
– APG’s adopted “Terms of Reference” recognized the
FATF’s 40 Recommendations as the benchmark to be
implemented by members according to their particular
cultural values and constitutional frameworks
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
– APG’s Terms of Reference which were revised at its
2006 Annual Meeting said that, to ensure a global
approach, members of the APG would work closely
with FATF
– The APG is voluntary and cooperative in nature and
works closely with FATF and uses similar
mechanisms used by FATF in its operations
– Even though FATF and APG have reciprocal rights of
attendance at each other’s meetings, as well as
reciprocal sharing of documents, the APG
determines its own policies and practices
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
– Membership of the APG is open to any
jurisdiction within the Asia/Pacific region that
meets its six point criteria
– It is not a precondition for participation in the
APG that anti-money laundering or anti-terrorist
financing laws already be enacted
– The APG Secretariat is located in Sydney,
Australia
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
• CARIBBEAN FINANCIAL ACTION TASK FORCE
(CFATF)
– Fosters ML controls in the Caribbean region
– Main objective is to secure effective compliance
with its recommendations to prevent and control
ML and to combat TF
– Group consists of dozens of states in the Caribbean
basin and was established as the result of meetings
convened in Aruba in May 1990 & Jamaica in
November 1992.
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Part II: Compliance Standards for AML/CFT
REGIONAL AND OTHER
INTERNATIONAL INITIATIVES
– Canada, France, Mexico, the Netherlands, Spain, The UK, US
serve as “Cooperating and Supporting Nations”
– Has 19 Recommendations on ML which are complementary
to the FATF 40 Recommendations and were revised in 1999
– Kingston Declaration which was endorsed and affirmed by
member governments made a commitment to implement
the FATF and Aruba Recommendations, the OAS Model
Regulations, and the 1988 U.N. Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances
– The members agreed to enter into mutual assistance
agreements with each other to assist in ML investigations
– They also agreed the ML should be an extraditable offense
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Part II: Compliance Standards for AML/CFT
REGIONAL FATF-STYLE BODIES
AND FATF ASSOCIATE
MEMBERS
• FINANCIAL ACTION TASK FORCE ON MONEY LAUNDERING IN
SOUTH AMERICA (GAFISUD-GRUPO DE ACCION FINANCIERA DE
SUDAMERICA)
– The FATF on ML in South America was created in December 2000 in
Colombia
– Main objective is to implement AML measures in South America
– GAFISUD, with a secretariat in Argentina, was created by an
intergovernmental agreement that left the door open for more
countries to join
– GAFISUD has adopted the FATF’s Recommendations and expects to
develop its own Recommendations for purposes of AML/CFT
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Part II: Compliance Standards for AML/CFT
REGIONAL FATF-STYLE BODIES
AND FATF ASSOCIATE
MEMBERS
• MIDDLE EAST AND NORTH AFRICA FINANCIAL
ACTION TASK FORCE (MENAFATF)
– Established in November 2004 in Manama, Bahrain(
headquartered )by 14 countries in the region.
– Currently has 18 members
– Voluntary in nature and was established by
agreement between its members
– Independent organization having its own rules
– Have adopted the FATF Recommendations and
blueprints for purposes of AML/CFT
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Part II: Compliance Standards for AML/CFT
REGIONAL FATF-STYLE BODIES
AND FATF ASSOCIATE
MEMBERS
• EURASIAN GROUP ON COMBATING MONEY
LAUNDERING AND TERRORIST FINANCING(EAG)
– Another FATF-style regional body formed in October
2004 in Moscow
– Open to states in the region
– Countries such as Georgia, Uzbekistan, Ukraine,
Italy, the UK and US as well as international
organizations such as FATF, the World Bank and the
IMF, sit as observers of the organization
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Part II: Compliance Standards for AML/CFT
REGIONAL FATF-STYLE BODIES
AND FATF ASSOCIATE
MEMBERS
• EASTERN AND SOUTH AFRICAN ANTI-MONEY
LAUNDERING GROUP
– 14 countries from East Africa to the southern tip of
Africa currently make up this FATF-style regional
body
– In 1999, Group developed an MoU among its
member states which among other things, adopts
and implements the 40 Recommendations of FATF
– All 14 member states have signed memorandum
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Part II: Compliance Standards for AML/CFT
REGIONAL FATF-STYLE BODIES
AND FATF ASSOCIATE
MEMBERS
•
THE INTER-GOVERNMENTAL ACTION GROUP AGAINST MONEY LAUNDERING IN WEST AFRICA
(GIABA)
The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA)
established in the year 2000 is a major response and contribution of West African
states to the fight against money laundering.
GIABA is a specialized institution of ECOWAS that is responsible for strengthening the
capacity of member states towards the prevention and control of money laundering and
terrorist financing in the region.
Apart from member states, GIABA grants Observer Status to African and non-African
States, as well as Inter-Governmental Organizations that support its objectives and
actions and which have applied for observer status.
GIABA has granted observer status to several bodies including FATF and the Egmont
Group
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
• ORGANIZATION OF AMERICAN STATES(OAS) INTERAMERICAN DRUG ABUSE CONTROL COMMISSION
(COMISION INTERAMERICANA PARA EL CONTROL DEL
ABUSO DE DROGAS)(CICAD)
– OAS in May, 1992 became first permanent international body
to reach an agreement on AML legislation
– OAS unanimously approved of 19 articles, which it
recommended its member nations enact
– OAS was a result of the work of the Western Hemisphere
anti-drug organization, CICAD, two years earlier
– CICAD specializes in fighting drug trafficking and the drugs
trade in that hemisphere
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
• EGMONT GROUP OF FINANCIAL INTELLIGENCE UNITS
– Formed beginning 1995 by an informal coming together of
FIUs in Brussels
– Goal of group is to provide a forum for FIUs around the world
to improve cooperation in the fight against ML and TF and
foster implementation of domestic programs in this field
– Group has defined an FIU
– In 2001, group issued a document, “Principles for Information
Exchange Between Financial Intelligence Units for Money
Laundering and Terrorism Financing Cases”
– Document sets out guidelines for sharing information among
FIUs
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
– In 2004, the group issued “Best Practices for the
Exchange of Information Between Financial
Intelligence Units”
– As of June 30, 2010, there were 117 Egmont
member FIUs
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
•
THE WOLFSBERG GROUP
– An association of 11 global banks that aims to develop financial services industry
standards and related products for KYC, AML and CFT
– Group first came together in 2000 at the Wolfsberg castle in Switzerland
– Their principles hold no force of law and carry no penalties for those who do not abide by
them
– Have publishes principles that recommend controls for private banking ranging from
customer identification, EDD and PEPs
– Principles published in October 2000 and revised in May 2002 and is called “The
Wolfsberg Anti-Money Laundering Principles for Private Banking”
– Principles also address:
•
•
•
•
•
Reporting to management of ML issues
AML training
Retention of relevant documents
Deviations from policy
Creation of an AML department and an AML policy
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
• WoIfsberg Group also issued guidelines in
early 2002 on “The Suppression of the
Financing of Terrorism” outlining the roles of
FIs in the fight against ML and TF
• Wolfsberg Group has issued several other
guidelines to further its aims
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Part II: Compliance Standards for AML/CFT
OTHER ANTI-MONEY
LAUNDERING INITIATIVES
• THE WORLD BANK AND THE INTERNATIONAL
MONETRAY FUND( IMF)
– Have jointly supported efforts of FATF in addressing the
resistance of certain nations to joining the international
battle against ML
– Have a joint policy paper called “Enhancing
Contributions To Combating Money Laundering”,
detailing steps at combating ML
– Both are working with FATF and other international
bodies to help fight ML and TF through implementation
of several programs
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Part II: Compliance Standards for AML/CFT
OTHER INTERNATIONAL
ORGANIZATIONS
• Other international organizations with anti-money laundering and
terrorist financing initiatives include:
–
–
–
–
–
–
–
–
–
–
–
African Development Bank
Asia Development Bank
The Commonwealth Secretariat
European Bank for Reconstruction and Development (EBRD)
European Central Bank (ECB)
Europol
Inter-American Development Bank (IADB)
Interpol
International Organization of Securities Commissions (IOSCO)
Offshore Group of Banking Supervisors (OGBS)
World Customs Organization (WCO)
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Part II: Compliance Standards for AML/CFT
KEY U.S LEGISLATIVE AND
REGULATORY INITIATIVES APPLIED TO
TRANSACTIONS INTERNATIONALLY
This is a brief overview of the principal elements
of US law related to ML &TF that have a bearing
on international transactions and jurisdictions
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Part II: Compliance Standards for AML/CFT
USA PATRIOT ACT
• USA PATRIOT ACT is an acronym for a U.S
Congress law after 9/11 designed to disable
mechanisms that finance terrorism
• It stands for “ Uniting and Strengthening
America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism
Act” (USA Patriot Act)
• Law has Sections which deal with ML &TF
• Law has implications for US institutions and
non-US institutions that do business in the US
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Part II: Compliance Standards for AML/CFT
USA PATRIOT ACT
• Law empowers US Treasury Department to
provide regulations for which financial
institutions doing business in the US and
beyond are supposed to comply with
• The law allows the US to designate noncompliant financial institutions and countries to
be placed on blacklists and sanctioned
• The law has provisions related to
correspondent banking, customer and
enhanced due diligence, AML programs, private
banking, shell banks, PEPs, etc
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Part II: Compliance Standards for AML/CFT
US CRIMINAL MONEY LAUNDERING &
CIVIL FORFEITURE LAWS
• US AML law first enacted in 1986
• Defines “specific unlawful activity”(SUA) for which it
applies; but these include virtually every US crime
• US AML also reaches foreign individuals and foreign
financial institutions if the transaction occurs in whole or
in part in the US or if the foreign financial institution
maintains a bank account at a US financial institution
• The law also addresses issues of “wilful blindness” in
transactions
• Forfeiture of funds of foreign persons and institutions are
also addressed in US law
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Part II: Compliance Standards for AML/CFT
OFFICE OF FOREIGN ASSETS CONTROL
(OFAC)
• In addition to all these laws, the US Treasury
Department’s Office of Foreign Assets Control
(OFAC) administers and enforces economic and
trade sanctions based on US Foreign Policy and
national security goals
• This is done against targeted foreign countries,
terrorists, international narcotics traffickers and
people engaged in the proliferation of WMDs
• The US State Department, Treasury Department
and Presidency are responsible for such actions
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Part II: Compliance Standards for AML/CFT
OTHER US LAW(S)
• Foreign Account Tax Compliance Act (FATCA)
– The Foreign Account Tax Compliance Act (FATCA)
requires United States persons including individuals
who live outside the United States, to report
their financial accounts held outside of the United
States, and requires foreign financial institutions to
report to the Internal Revenue Service(IRS) about
their American clients. FATCA was designed
primarily to combat offshore tax evasion and to
recoup federal tax revenues.
– This also has AML/CFT implications
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Part II: Compliance Standards for AML/CFT
•
•
•
•
•
•
•
•
Overview of Ghana’s AML/CFT Regime
Anti-Money Laundering Act, 2008 (Act 749)
Anti-Money Laundering (Amendment) Act, 2014 (Act 874)
Anti-Money Laundering Regulations, 2011 (L.I. 1987)
Anti-Terrorism Act, 2008 (Act 762) and the Anti-Terrorism (Amendment)
Act, 2012 (Act 842)
Anti-Terrorism Regulations, 2012 (L.I. 2181)
The Bank of Ghana and Financial Intelligence Centre(BOG/FIC) Anti-Money
Laundering/Combating the Financing of Terrorism (AML/CFT) Guideline,
2011
Securities And Exchange Commission–Ghana and Financial Intelligence
Center(SEC/FIC) Anti-Money Laundering/Combating Financing Of Terrorism
(AML/CFT) Compliance Manual for Capital Market Operators,2011
National Insurance Commission(NIC) and Financial Intelligence Centre(FIC)
Anti-Money Laundering/Combating Financing Of Terrorism (AML/CFT)
Guidelines
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Part II: Compliance Standards for AML/CFT
Overview of Ghana’s AML/CFT laws cont’d
• Essentially, Ghana’s AML/CFT laws are based
on the Financial Action Task Force on Money
Laundering (FATF)’s recommendations and
best internationally accepted banking
standards.
END OF PART II
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Part II: Compliance Standards for AML/CFT
Current Global/Regulatory Trends in AML
• The passing of the EU Forth Directive in December
last year
– More scrutiny of PEPS and Ultimate Beneficial Owners
as a way of fighting bribery, corruption and tax evasion
– Outsourcing of Due Diligence to third parties; reliance
on Due Diligence of Group Companies
– Tighten rules on wire transfers. Transfers of over 1000
Euros to EU countries to be tightly monitored
– EU states given up to two(2) years to implement 4th
Directive.
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Part II: Compliance Standards for AML/CFT
Current Global/Regulatory Trends in AML
• US Financial Crime Enforcement Network
(FINCEN), going directly after compliance
officers of firms.
• In December 2014, one officer fined to the
tune of 1 million USD for AML violations.
Fines converted into a judgment which
essentially bars him from working in the
financial industry for the foreseeable future.
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