BoG to toughen stance on Anti-Money Laundering

BY: Jessica Acheampong
Money laundering

The Bank of Ghana (BoG) will soon publish sanctions for companies that fail to comply with provisions in the Anti-Money Laundering Act, 2014 (Act 874).

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This is in line with the amended Act which gives the BoG the authority to apply sanctions per its supervisory role.

The Second Deputy Governor of the Bank of Ghana, Dr Johnson Asiama, said this at a risk summit on March 29, but declined to give details of the sanctions. Instead, he said the BoG would soon announce the sanctions. 

“The Anti-Money Laundering Act, 2014 (Act 874) included the proliferation of weapons of mass destruction in its definition of unlawful activities and the new predicate offence - tax offence. It expanded the Customer Due Diligence framework which is the bedrock of sound anti-money laundering regime. The Act also gives the mandate to supervisory authorities to apply administrative sanctions, and the Bank of Ghana will soon publish its sanctions for non-compliance with provisions of the Act,” he said. 


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He said the new anti-money laundering Act which was passed in 2014 to remedy some deficiencies identified with the old Act.

The Anti-Money Laundering Act, 2014 (Act 874) is an act to amend the Anti-Money Laundering Act, 2008 (Act 749) to extend the application of Act 749 to expand the scope of actions that can be taken under the Act and to provide for related matters.

 

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Implementation of Basel II and III framework

Dr Asiama said the Bank of Ghana’s full implementation of the Basel Regulatory Framework was scheduled for 2018. 

“The full implementation of the Basel Regulatory Framework vis-a-vis the existing risk-based supervision will go a long way to prepare the banking sector for risk management practices that are commensurate with the kind of financial services and products that are rolled-out in the sector,” he said.

In line with this, the Bank of Ghana has created a unit of dedicated group of staff in the supervision departments to provide technical support for the Basel II and III implementation process. The unit has the responsibility of preparing the supervision department and the banking industry. 

The International Monetary Fund (IMF), he said, had given the BoG technical assistance (TA) to complement the initiatives under the programme.

“The required Technical Assistance (TA) is to assist in building capacity for the supervisory staff of the Bank of Ghana and the banking industry and also to develop a roadmap to build the structures necessary for implementation,” he said.

 

Managing risks 

Dr Asiama stated that as a regulator, the Bank of Ghana’s role over the years comprised sensitising banks to the importance of risk management systems. 

“We believe that banking institutions that adopt global and country-specific best practices will take proactive and not a reactive approach to risk management, assessing and providing safety buffers for expected and unexpected risk, long before a potential risk event crystallises. It should be noted that financial institutions who hitherto view risk management from the perspective of compliance or control (backward looking) must now view risk management from the perspective of value creation (forward looking) and the minimisation of inherent risk and operational losses,” he said. 

He also urged financial institutions to clearly articulate the risk appetite of their institutions in order to put measures in place that will mitigate expected as well as unexpected risk. 

 

The risk summit

The four-day capacity building summit was organised by Innovare, a knowledge and skills transfer provider, to equip bankers with skills needed to help them manage their risk.

It was on the theme: “Strengthening financial services operations with risk management.”

The Chief Executive Officer of Innovare, Mr C.K. Bruce, reiterated the need for banks to develop effective risk management systems to be able to deal with inherent risks associated with their operations. 

“This conference on financial services is to ensure that best practices in risk management is adhered to and practised by all the banks. You know of all the collapses, such as DKM and the rest; it was as a result of no proper risk management system and poor governance. These are issues that we need to address to strengthen the banking sector in Ghana,” he said.

He said the summit would be held annually to build the capacity of bankers by exposing them to new risks and how to deal with them.— GB