GhanaWeb Feature by Ernestina Serwaa Asante
Any activity that allows an individual or group to unlawfully gain financial assets whether money, securities, or other property is considered financial crime.
Interpol defines financial crime as ranging from basic theft or fraud committed by ill-intentioned individuals to large-scale operations orchestrated by organized criminals with a presence across multiple continents.
These are serious criminal activities that should not be underestimated. Beyond their social and economic impact, they are often closely linked to violent crime and even terrorism.
Examples of financial crimes include money laundering, insider trading, embezzlement, terrorist financing, and proliferation financing.
According to Investopedia, money laundering is an illegal process that disguises large amounts of money generated from criminal activities, such as drug trafficking or terrorist funding, to make them appear legitimate.
The money obtained from these illegal activities is considered “dirty,” and the laundering process makes it look “clean.” To combat this, financial institutions implement anti-money laundering (AML) policies to detect and prevent such activities.
Corruption, on the other hand, is defined by Transparency International as the abuse of entrusted power for private gain. It erodes trust, weakens democracy, and hampers economic development.
Additionally, it exacerbates inequality, poverty, social division, and environmental crises.
The role of the Financial Intelligence Centre (FIC)
To combat these financial crimes, the Ghanaian government established the Financial Intelligence Centre (FIC) under Section 4 of the Anti-Money Laundering Act, 2008 (Act 749).
The FIC’s mandate is to receive and analyze suspicious transaction reports and other information related to financial crimes such as money laundering, terrorist financing, and proliferation financing. It plays a crucial role in identifying and addressing illicit financial activities.
The FIC collaborates with various stakeholders, including banks, regulatory bodies, and law enforcement agencies, to strengthen Ghana’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) framework.
One of its key responsibilities is detecting suspicious transactions, such as unusually large cash deposits or transfers.
For instance, if a customer attempts to make a large cash deposit or withdrawal beyond the legal limit, the bank may flag the transaction and refer it to the FIC for further analysis. This is particularly necessary when the source of funds is questionable, especially if it originates from high-risk countries known for financial crimes.
If the FIC determines that the transaction is legitimate, it will proceed as normal. However, if the account is linked to money laundering or other financial crimes, the funds will be frozen, and further investigations will be conducted to apprehend the criminals involved.
Disseminating actionable intelligence
Another critical function of the FIC is disseminating actionable intelligence. It shares its findings with law enforcement agencies such as the Ghana Police Service and the Economic and Organized Crime Office (EOCO) to aid investigations. This collaboration helps prosecute offenders once they are found guilty.
Collaboration with stakeholders
The FIC has partnered with the Bank of Ghana to develop guidelines for banks on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT).
It has also conducted training sessions for the Ghana Bankers Association, the media, and other stakeholders to help them detect financial crimes, understand their legal obligations, and support efforts to combat illicit financial activities.
Supporting tax crime investigations
The FIC also collaborates with revenue authorities, such as the Ghana Revenue Authority (GRA), to combat tax evasion and other tax-related crimes.
In 2020, the FIC worked with the GRA to investigate a suspected tax evasion scheme involving a Ghanaian business. The FIC provided intelligence and analysis that supported the investigation, leading to the recovery of unpaid taxes.
Challenges facing the FIC
Despite its significant contributions, the FIC faces several challenges that hinder its effectiveness:
Limited Resources
One of the major challenges is inadequate funding, limited human resources, and a lack of access to advanced technology, all of which affect the Centre’s efficiency and impact.
Corruption and political interference
Operating in an environment where corruption is prevalent makes it difficult for the FIC to function effectively. Political interference often suppresses its efforts, rendering it less effective in tackling financial crimes.
Data quality issues
The FIC also encounters challenges related to incomplete or inaccurate reporting of financial transactions, which can affect investigations and intelligence-gathering efforts.
The way forward
Despite these challenges, the collaboration between the FIC and other institutions remains crucial for strengthening Ghana’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime. A well-functioning system will contribute to a safer and more transparent financial environment.
This article was informed by knowledge gained from a specialized training program on investigating Illicit Financial Flows (IFF) in Ghana, organised by NewsBridge Africa and funded by GIZ in November last year.
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