Africa Day was established in 1963 by the Organisation for African Unity (OAU), and is celebrated annually on May 25. This year’s day focused on the empowerment of youth, and in the spirit of empowerment and self-determination, we thought we would look at how countries on the continent are combatting money laundering (ML) and terrorist financing (TF).
Anti money laundering (ML) measures on the continent are inconsistent — weaker in some jurisdictions and stronger in others. Recent FATF Mutual Evaluations on Zimbabwe and Uganda detail plenty of room for improvement. But these evaluations do not necessarily reflect on how other countries in the world’s second largest continent are approaching the fight against ML and TF.
Part of this fight has required some frankness in regard to ML and TF in Africa. Last year, the Governor of the National Bank of Angola Jose Pedro de Morais told the Financial Times that in African countries there is a ‘lower risk of detection’ for money laundering because ‘our compliance programmes are often not as robust as they should be and in some cases simply ineffective’.
Now, Morais is something a controversial figure: he is very wealthy individual who has worked as part of a regime that has faced intense corruption allegations, and his luxurious lifestyle has been well-documented. But his efforts to identify and articulate the problems of corruption in Angola — and his championing of global standards — should be lauded. He told the World Economic Forum that for Africa there ‘is an urgent need to go beyond standard anti-money laundering controls’.
Financial Intelligence Amendment Act
As we are all aware though actions are stronger than words, and fortunately this adage has been put into practice. South Africa recently ratified AML legislation in the form of the Financial Intelligence Amendment Act (FICA). The signing of the law is related to a June deadline imposed by FATF that required South Africa to bolster its AML procedures. Not doing so would have resulted in South Africa, the only African member of FATF, being expelled from the organisation.
FICA allows for greater scrutiny into PEPs, and makes the identification of beneficial owners easier. Prosecutors in the country stated that the failure to establish an anti money laundering council that was proposed in 2002 was ‘a fundamental mistake’, and diluted the fight against ML in the country.
Not even the most fervent optimist could claim that there isn’t more that African countries could do to combat money laundering across the region. External pressure to keep in line with global standards is an effective way to maintain and improve standards, as FATF’s South African deadline demonstrates. Ghana is another apt example. The World Bank supported the country as it produced its first AML national risk assessment in 2014 to identify areas of weakness and mitigate against them.
The support of NGO’s like the World Bank in helping combat ML/TF in Africa is crucial. Regional bodies play a significant role, too. In May the EU held a two-day workshop in Khartoum that looked to share best practice on AML/CFT. Sudan was removed from the FATF blacklist in 2015, and initiatives like the Khartoum are aimed at helping Sudan ensure it stays off that list.
There are serious, deep-rooted problems across Africa — corruption among them — that need resolving. Recognition of this within African governments has proliferated, and outside assistance continues to grow. If the will to fight money laundering and terrorist financing remains high, then the true potential of more than a billion individuals who live in Africa can be realised.
How can ICT help?
Money laundering continues to hold high profile with regulators and firms alike. Non-compliance with anti money laundering requirements can cause both significant reputational damage and penalties for organisations, meaning appropriate training for AML professionals is essential.
ICA's internationally recognised qualifications in anti money laundering are suitable for all levels of knowledge & experience. See the full list of aml courses here >
The ICA Certificate in Combating the Financing of Terrorism provides a foundation knowledge of the meaning of terrorist financing and proliferation, an introduction to the legal frameworks associated with global counter-terrorist financing strategy and an overview of the key terrorist financing threats and risks.