Identifier
Created
Classification
Origin
05ACCRA228
2005-02-02 18:32:00
UNCLASSIFIED
Embassy Accra
Cable title:  

INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT

Tags:  KCRM PTER KSEP SNAR KTFN EFIN GH 
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UNCLAS SECTION 01 OF 02 ACCRA 000228 

SIPDIS

E.O. 12958: N/A
TAGS: KCRM PTER KSEP SNAR KTFN EFIN GH
SUBJECT: INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
PART II: MONEY LAUNDERING AND FINANCIAL CRIMES

REF: 04 STATE 254401

UNCLAS SECTION 01 OF 02 ACCRA 000228

SIPDIS

E.O. 12958: N/A
TAGS: KCRM PTER KSEP SNAR KTFN EFIN GH
SUBJECT: INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT
PART II: MONEY LAUNDERING AND FINANCIAL CRIMES

REF: 04 STATE 254401


1. Introduction: Post appreciates the extensions given for
completion of this report, but wishes to underscore the
difficulties involved in collecting the data. The Government
of Ghana employs one person at the Bank of Ghana to monitor
all issues related to money laundering. His long recent
absence, coupled with the lack of money laundering
legislation, makes the collection of substantive data
difficult. Post will continue to gather the information
requested and report as soon as possible. Post has also made
the passage of strong money laundering legislation an MPP
tactic for 2005 and has requested ESF funds for technical
assistance to achieve that goal. End Introduction.


2. Ghana is not a regional financial center, although the
government is promoting efforts to model Ghana's financial
system on that of the regional financial hub in Mauritius.
The government developed new laws to stimulate financial
sector growth, including the revision of the banking law to
strengthen the operational independence of the Central Bank
(Bank of Ghana). The Bank of Ghana imposed higher capital
requirements to increase competition and force consolidation.
Due to continuing turmoil in the region, Ghana's financial
sector will likely take on more of a regional financial role
as it develops.


3. The banking sector lacks a strong regulatory framework to
prevent money laundering and other suspicious transactions,
although it is sensitized to the importance of such a
framework. The police suspect that nonbank financial
institutions, such as foreign exchange bureaus, may be used
to launder the proceeds of narcotics trafficking. The extent
of this problem is unknown. They also allege that donations
to religious institutions have been used as a vehicle to
launder money. The number of "advanced fee" scam letters
that originate in Ghana has increased dramatically, as have
other related financial crimes, such as use of stolen credit
and ATM cards.


4. The informal economy makes up approximately 45 percent of
the total Ghanaian economy, according to World Bank
estimates. Only a small percentage of this part of the

economy, however, relies on the banking sector. Ghana's
relatively low tariffs do not encourage smuggling. The lack
of government resources, however, makes both the informal
economy and smuggling difficult to track with accuracy.


5. According to our source in the Bank of Ghana, there is no
evidence of the Government of Ghana or any of its senior
officials promoting or engaging in laundering the proceeds
from illegal drugs transactions or terrorist financing.
Neither does Post have any knowledge of financial
institutions engaged in money laundering.


6. Ghana has criminalized money laundering related to
narcotics trafficking and other serious crimes. Law
enforcement can compel disclosure of bank records for
drug-related offenses, and bank officials are given
protection from liability when they cooperate with law
enforcement investigations. Local banks are not required to
report suspicious transactions, but are required by the
Central Bank to report their 20 largest deposits and 20
largest withdrawals on a weekly basis. The Central Bank
circulated the list of individuals and entities on the UN
1267 sanctions committee to local banks but no assets have
been identified. Ghana has cross-border currency reporting
requirements. In December 2001, the Bank of Ghana began
drafting money laundering legislation designed to increase
the government,s financial oversight capabilities. As of
January 2005, the bill had not been submitted to Parliament
and Post has been told it is still in executive branch
consultations.


7. Ghana designated two areas, Tema and Sekondi-Takoradi, as
free trade zone areas and also licenses factories outside the
free zone area as free zone companies. Free-zone companies
export at least 70 percent of their output. Most of the
companies produce garment and processed foods. The Ghana
Free Zone Board and the immigration and customs authorities
monitor these companies. Immigration and customs sources
report they do not suspect any trade-based money laundering
schemes.


8. The Narcotic Drug Law of 1990 provides for the forfeiture
of assets upon conviction of a money laundering offense. The
Government of Ghana made no arrests or prosecutions related
to money laundering in 2004.


9. Ghana participated in the formation of the
Inter-Governmental Action Group Against Money Laundering
(GIABA) at the December 2001 meeting of the Economic
Community of West African States in Dakar. In July 2002,
Ghana also hosted the 2002 West African Joint Operation
Conference (WAJO) that promotes regional law enforcement
cooperation against narcotics trafficking, terrorism, and
money laundering. In May 2003, more than 40 representatives
from financial institutions and law enforcement agencies
participated in the Economic and Financial Anti-Fraud and
Computer Crime Training Course.


10. Domestic security agencies cooperate in the fight against
terrorism but need assistance. Ghana is a signatory to all
twelve international anti-terror conventions, and has drafted
legislation to enforce them. Ghana is a party to the 1988 UN
Drug Convention and the UN International Convention for the
Suppression of the Financing of Terrorism. Ghana has endorsed
the Basel Committee's "Core Principles for Effective Banking
Supervision." Ghana has bilateral agreements for the exchange
of money laundering-related information with the United
Kingdom, Germany, Brazil, and Italy.


11. Ghana's money laundering legislation is still being
drafted and under discussion between ministries. Post will
continue to pursue precision on the status of draft
legislation. When legislation is finally passed the main
obstacle will be the amount of resources required to enforce
the legislation. Currently the Bank of Ghana has one
employee tasked with tracking all suspicious transactions and
money laundering cases for the entire government. Existing
drug-related asset seizure laws are enforced, but the amounts
involved are small, since most traffic is handled in cash.
The lack of resources and manpower makes it almost impossible
to ascertain the scope of money laundering and terrorist
financing in Ghana.
YATES