Last Updated 14/02/2013
CENTRAL AUTHORITY FOR REPORTING
A Financial Intelligence Centre was set out by Section 4 of the Anti-Money Laundering Act (Act 749) of 2008 (the “AML Act”). It was established in January 2010.
OTHER ANTI-MONEY LAUNDERING REGULATOR(S)
Bank of Ghana
Inter-Governmental Action Group Against Money Laundering and Terrorist Financing in West Africa (GIABA)
Bureau of National Investigations
Customs, Excise and Prevention Service
Serious Fraud Office
The Immigration Service
The Attorney General and Ministry of Justice
Securities Exchange Commission
ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?
The AML Act treats lawyers as “accountable institutions” (First Schedule of the Act).
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
There is currently no guidance in place for lawyers.
It is noteworthy that Section 38 AML Act provides for the following:
“(1) The [Financial Intelligence] Centre shall issue guidelines related to
(a) the verification of identity,
(b) the reporting of suspicious or unusual transactions, and
(c) any other obligation imposed on an accountable institution under the Act.
(2) The guidelines shall take into account the
(a) categories of accountable institutions,
(b) persons involved, and
(c) categories of transactions”
No guidelines for Designated Non-Financial Businesses and Professionals (DNFBPs) have been published yet by the Financial Intelligence Centre.
IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
The General Legal Council (“GLC”) is responsible for the regulation of the legal profession in Ghana. The GLC was created by the Legal Profession Act (Act 32) of 1960 and has the authority to discipline members of the profession through a Disciplinary Committee.
The GLC might be considered a supervisory body for the purposes of Section 29(1) of the AML Act, which authorises supervisory bodies to report members it suspects of being involved with unlawful activities; however there is currently no evidence that lawyers are supervised or regulated for AML/CFT purposes.
The Ghana Bar Association is a voluntary professional association for lawyers with no power to discipline members or enforce professional ethics. Although membership is not mandatory, all admitted to legal practice are automatically registered as members.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.
Client Due Diligence measures (“CDD”), under the AML Act, involve:
Identifying proceeds of unlawful activity
Knowing the customer via obtaining enough information to identify and verify the client whom they are required to identify (i.e. the beneficial owner),
Recording business transactions,
Developing internal policies procedures and controls, and
Obtaining more information where required.
In particular, with respect to the information that lawyers must obtain to identify proceeds of unlawful activity, Section 7 of the AML Regulations provides that:
“(1) An accountable institution shall obtain information from or in respect of
(a) a client who establishes a business relationship or concludes a single transaction, or
(b) a prospective client who seeks to establish a business relationship or conclude a single transaction.
(2) An accountable institution shall obtain information whenever it is reasonably necessary with a view to obtaining additional information
(a) related to a business relationship or single transaction which poses a particularly high risk of facilitating money laundering activities, or
(b) to enable the accountable institution identify proceeds of an unlawful activity.
(3) The information shall take into account any guidelines related to the verification of identity or the reporting of suspicious or unusual transactions which may apply to that accountable institution.
(4) The information which an accountable institution shall obtain shall be adequate to reasonably enable the accountable institution determine whether transactions involving the client referred to are consistent with the accountable institution’s knowledge of that client and are in compliance with the Act, these Regulations and the internal rules.
(5) The client’s business activities shall include particulars related to the
(a) source of that client’s income, or
(b) source of the funds,
which that client expects to use to conclude the single transaction or transactions in the course of the business relationship.”
Currently, there is no specific KYC guidance for Designated Non-Financial Businesses and Professionals (DNFBPs). The Bank of Ghana has published a AML/CFT Guideline for bank and non-bank financial institutions in Ghana.
In addition to CDD requirements, DNFBPs are required under Section 40 of the AML Act to, in consultation with the Financial Intelligence Centre formulate and implement internal rules concerning:
the establishment and verification of the identity of the person whom they are required to identify;
information of which records must be kept, the manner in which and the place at which the records must be kept; and,
the steps to be taken to determine when a transaction is reportable, and other matters that an institution may determine.
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
The Bank of Ghana has directed financial institutions to take a risk-based approach to client due diligence, but there is no indication that this extends to accountable institutions, including lawyers.
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
Pursuant to Section 1(2)(e) of AML Regulations, the internal rules set out by the accountable institutions must provide for “enhanced due diligence on specified persons” i.e. politically exposed persons (PEPs) as referred to in Section 8 of AML Regulations.
First, Section 8 provides that “[a]n accountable institution shall put in place appropriate risk management systems in addition to the performance of client due diligence to determine whether a prospective client or beneficial owner is a [PEP].”
Then, “[a]n authorised officer of an accountable institution responsible for establishing a business relationship with a prospective client of the accountable institution shall perform enhanced due diligence and seek senior management approval before establishing a business relationship with a [PEP].”
Lastly, “[w]here an existing client or beneficiary is subsequently found to be or becomes a [PEP], an authorised officer of the accountable institution shall seek senior management approval to continue the business relationship.”
Concerning the sources of a PEP’s wealth, Section 9 provides that “[a]n accountable institution shall take reasonable measures to establish the source of wealth and source of funds of a client and beneficial owner” identified as a PEP.
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
As accountable institutions, lawyers are subject to reporting obligations under the AML Act.
These reporting obligations are laid down in Section 30 of AML Act, according to which aperson or an institution has to report to the [Financial Intelligence] Centre within 24 hours if it knows or suspects that:
“(a) a business entity, an accountable institution or a trust has received or is about to receive the proceeds of unlawful activity, or
(b) a transaction to which the business entity is a part
(i) facilitated or is likely to facilitate the transfer of the proceeds of
(ii) has no apparent business or lawful purpose,
(iii) is conducted to avoid or give rise to a reporting duty under the AML Act,
(iv) maybe relevant to an investigation into tax evasion or an attempt
to evade the payment of tax, duty or a levy imposed by legislation,
(v) has been used or is about to engage in money laundering.”
Section 30 also provides that “[w]here a person suspects a transaction to be linked to or used for the financing of a terrorist act as defined by law, the person shall make a report to the Centre within 24 hours of the suspicion.”
The AML Regulations provide more details in the cases where suspicious transactions reports (STRs) have to be filed, and address the specific case of lawyers.
Section 32(1) of AML Regulations requires that “[a]n accountable institution shall pay special attention to transactions that
(a) are complex,
(b) involve unusually large sums of money,
(c) have unusual patterns, or
(d) have no apparent or visible economic or lawful purpose.”
According to Section 32(2), an accountable institution is required in furtherance of Section 32(1) to:
“(a) examine the background and purpose of the transactions specified,
(b) record the findings in writing within twenty-four hours, and
(c) forward the findings to the [Financial Intelligence] Centre.”
Section 32(3) addresses the specific case of Designated Non-Financial Businesses and Professions (DNFBPs), and among them lawyers.
According to its provisions, “[w]here an accountable institution other than a financial institution enters into a transaction with a client, the accountable institution shall report to the [Financial Intelligence] Centre if the transaction, in the case of…(c) an accountant, a lawyer, notary or other independent legal professional relates to:
(i) the buying or selling of real estate;
(ii) managing client money;
(iii) managing bank savings or securities accounts;
(iv) the organisation of contributions for the creation, operation or management of companies;
(v) the creation, operation or management of legal persons or arrangements and buying and selling of business entities;
(vi) acting as or arranging for another person to act as a director or secretary of a company, a partner of a partnership or in a similar position in relation to other legal persons;
(vii) providing a registered business office, business address or
accommodation or correspondence or an administrative address for a legal person; or
(viii) acting as or arranging for another person to act as a trustee of an express trust, or nominee shareholder for another person, in the preparation or conduct of activities of the client,
in a suspicious or unusual manner" (emphasis added).
Section 33 of the AML Regulations provides additional information on reporting requirements: a lawyer “shall make a suspicious or an unusual transaction report regardless of
(a) the amount involved, or
(b) whether the transactions are thought to involve tax matters,
if the person making the report has reasonable grounds to believe that the transaction is being made to avoid the detection of money laundering…”
Under Section 6 of the AML Act, the Financial Intelligence Centre – the Ghanaian financial intelligence unit – is given the mandate to receive, analyse, and disseminate STRs.
DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Section 32 of the AML Act provides that “a person who makes a suspicious transaction report under section 30 is not liable for the breach of a restriction on disclosure of information by contract or by any law if the person reports the suspicion to the [Financial Information] Centre in good faith.”
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
Section 30(3)of AML Act forbids the person who has filed a STR from:
(a) disclosing the contents to another person [i.e., the transgressor] , or
(b) revealing the personal details of the officer of the Centre who receives the report to another person.
Section 30(4) prohibits the person who receives a STR from tipping-off.
There is a carve-out to the tipping-off offence. Section 30(5) requires the person who has filed a STR to disclose the contents of that report where:
(a) the person is required by law to disclose the contents,
(b) it is to carry out the provisions of the AML Act,
(c) it is for legal proceedings, or
(d) it is by an order of a Court.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
Section 11 of the AML Regulations provides that lawyers, as accountable institutions “shall conduct client due diligence on [existing clients] where
(a) the client conducts a suspicious or an unusual transaction,
(b) information on the client changes substantially, or
(c) the accountable institution becomes aware that the accountable institution lacks sufficient information about the existing client.”
Moreover, concerning Particularly Exposed Persons (PEP), Section 10 of AML Regulations provides that “[w]here an accountable institution is in a business relationship with a [PEP], the accountable institution shall conduct enhanced on-going monitoring of that business relationship.”
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
As any other citizens, lawyers are subject to the rules prohibiting anti-money laundering and terrorism financing.
In particular, with respect to laundering proceeds from a narcotic drug offence, Section 12 of the Narcotic Drugs Act of 1990 bans using, transferring the possession of, sending or delivering to any person or place, transporting, transmitting, altering, disposing of or otherwise dealing with, in any manner, any property or proceeds of any property with intent to conceal or convert that property or those proceeds knowing that all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of:
the commission of a narcotic drug offence; or
an act anywhere which, if it had occurred in Ghana, would have constituted a narcotic drug offence.
A person who contravenes to this provision is guilty of an offence and is liable on conviction to imprisonment for a term of not less than ten years.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
In 2012, the Financial Division of the Accra High Court remanded a lawyer in custody for allegedly being the “principal architect” of a money laundering scheme.
The case was revealed after a Dubai-based businessman was lured into the country by the lawyer to enter gold market. After concluding that the assets sold by the lawyer may be criminal proceeds, the business-man lodged complaint with Ghana National Security.
The final judgement on this case is yet to be rendered.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) OR A FATF-STYLE REGIONAL BODY CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
A Mutual Evaluation Report was published in April 2009 by the Inter-Governmental Action Group Against Money-Laundering in West Africa (GIABA), which reports the latest developments in Ghana in respect to AML legislation and their compliance with the FATF 40+9 Recommendations.
The GIABA report revealed a number of significant deficiencies, particularly with the core and key recommendations of the FATF. Some of the major deficiencies identified in Ghana’s AML/CFT regime include: lack of comprehensive preventative measures by financial institutions and DNFBPs in the areas of CDD, PEPs, and the application of a risk-based approach to AML/CFT compliance functions.
In October 2010, Ghana made a high-level political commitment to work with the FATF and GIABA to address its strategic AML/CFT deficiencies.
The measures Ghana has taken since the mutual evaluation report in November 2009 were addressed in the 2010 and 2011 follow-up reports.
The 2011 Follow-up Report praised Ghana’s AML Regulations as they “address CDD, and include rules related to establishment and verification of identity for natural and legal persons, record keeping, and due diligence for existing clients.” However deficiencies concerning DNFBPs are yet to be solved, in particular the DNFBPs’ awareness of their obligations, the publishing of guidelines for DNFBPs and the effective implementation of CDD by DNFBPs.
In 2011, GIABA adopted a Mutual Evaluation Implementation Action Plan for Ghana.
Although Ghana was blacklisted by FATF on 16 February 2012, FATF announced that “Ghana has been removed from the FATF’s Public Statement” of the blacklisting on 19 October 2012. FATF delegates lately visited Ghanaian authorities “to confirm that the process of implementing the required reforms and actions is underway to address deficiencies previously identified by the FATF” – pursuant to the latter’s 19 October 2012 decision.
In this context, a new reform will be enacted in order to ensure an effective implementation of anti-money laundering principles.The reform to be passed will focus on the actual implementation and improved enforcement of the existing law.
According to Dr Kwabena Duffuor, Ministry of Finance, since 2010 “all legal instruments relating to money laundering and terrorist financing had been enacted and focus would be on rigorous implementation to ensure effective performance.”
Information provided by:
Kimathi Kuenyehia, Sr.
Solicitor & Barrister, Ghana
Attorney & Counselor, New York
KIMATHI & PARTNERS, Corporate Attorneys
No. 6 Airport Road, Airport Residential Area
Airport, Accra, P.O. Box CT 6217
Office Tel: +233 0302 770 447
Direct Tel: +233 0302 766 870
Direct Mob: +233 24 7960 465
Fax: +233 0302 766 870
Anonymous, ‘Atuguba and three others before GLC Disciplinary Committee’ (May 2011) <http://www.ghanalaw.com/content/atuguba-and-three-others-glc-disciplinary-committee> accessed 4 March 2013
Anonymous, ‘Money laundering: Lawyer, Agronomist remanded’ (August 2012) <http://edition.myjoyonline.com/pages/crime/201201/79811.php> accessed 4 March 2013
Anonymous, ‘Ghana Committed To Eliminating Money Laundering And Terrorist Financing – President Mahama’ (January 2013) <http://www.ghana.gov.gh/index.php/component/content/article/96-top-headlines/19121-ghana-committed-to-eliminating-money-laundering-and-terrorist-financing-president-mahama> accessed 4 March 2013
16/01/2013 Ghana keeps on reforming its AML legislation to catch up with FATF requirements