Money Laundering booms under Mills

For the first time in the history of this country, Ghana, under the leadership of President Mills and his ruling National Democratic Congress has been indicted as one of the countries flouting recommendations for the fight against money-laundering and financing terrorism.

The international money-laundering watchdog, The Financial Action Task Force, has added Ghana to its blacklisted nations that have failed to meet international standards.

This development comes in the wake of persistent calls by civil society organisations, particularly the Danquah Institute, warning government to tackle the threat money laundering poses to the Ghanaian economy.

In August 2011, DI bemoaned what it called the NDC government’s seemingly uninterested stance in the enforcement of the Anti Money Laundering Act of 2007. Last Thursday’s development seems to have vindicated the position of the policy think tank about the attitude of President Mills towards tackling this problem.

As at 2010, DI revealed that nearly 60 to 100 percent of total remittances were sent through illegal money transfer routes, a major route for money laundering into Ghana.

This, according to the public policy think-tank, translated into cash between $1.2 billion and $2.12 billion, including laundered money from crime proceeds which passed through the illegal money transfer channels to Ghana in 2010 alone.

This is about half the total remittances to Ghana amounting to $2.12 billion, an increase of 18.4% from the 2009 amount of $1.79 billion.

The 2010 figure, according to DI, further constituted about 7 percent of Ghana’s GDP, 24.8 percent as a percentage of Ghana’s total export value of $7.9 billion and almost double of Ghana’s total foreign direct investment ($1.1 billion) for the same period.

The FATF, whose recommendations reach more than 180 countries through regional networks, estimates that money laundering and related financial crimes cost between 2 percent and 5 percent of global gross domestic product.

In its report, the FATF also called on governments to consider tax evasion as a money-laundering offence. The agency is also extending its focus to target the non-proliferation of weapons of mass destruction.

The FATF blacklist now includes 17 countries. Apart from the five new ones, they are: Bolivia, Cuba, Ethiopia, Iran, Kenya, Myanmar, Nigeria, North Korea, Sao Tome and Principe, Sri Lanka, Syria and Turkey.

No countries were taken off the blacklist, but Honduras and Paraguay were removed from an intermediary "grey-list" of countries found to be falling behind on international standards despite having committed to them.

"We are looking exclusively at the implementation of the standards," Rick McDonell executive secretary of FATF told journalists at a meeting in Paris. "Countries that we look at wind up on the list because they have not implemented them."

The body can make recommendations to any of the 36 countries that have signed a membership charter, as well as other nations, but it has no power to impose sanctions for violations.

The grey-list includes 22 countries: Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei, Cambodia, Ecuador, Kyrgyzstan, Mongolia, Morocco, Namibia, Nicaragua, the Philippines, Sudan, Tajikistan, Trinidad and Tobago, Turkmenistan, Venezuela, Vietnam, Yemen and Zimbabwe.

All these come in the wake of several warnings the Danquah Institute, the media and policy analyses think tank several months ago warned government about some illegal money transfers in the country of which the Bank of Ghana clearly denied.

Apart from financing terrorism, money laundering has very strong linkages with drugs and child trafficking.