US embassy cable - 05ACCRA228

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