Thursday, December 27, 2012

WA’s implementation of FATF Recommendations hampered by low technical know-how, financial resources

GIABA DG launches 2011 Report in Dakar, Senegal
Low technical know-how and inadequate financial resources to implement the global standards set by the Financial Action Task Force (FATF) are some of the daunting challenges staring in the faces of West African Member States of GIABA.

The FATF, an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions, is regarded a global pacesetter in the fight against money laundering and terrorism financing. It has established a comprehensive, integrated and impact-oriented approach in the fight against money laundering and terrorist financing.

However, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) is concerned that member countries could not go by the uniform and consistent application of the global Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) Standards set by the FATF. 

GIABA’s Director General Dr Abdullahi Shehu says the rationale for this includes competing priorities for scarce government resources, severe lack of resources and skilled workforce to implement government programmes - including AML/CFT programmes, and an overall weakness in legal institutions. This makes it difficult for member countries to fully implement the FAFT standards, he said.

He said: “Our member countries have been confronted with operating environment filled with social change and uncertainties, and a string of practical issues in the fight against ML/TF, such as good governance, corruption, incomprehensive and competing legislative system, and lagged financial system.”

In fact, GIABA’s Mutual Evaluation Reports (MERs), which assesses member countries conformity with international standards for preventing money laundering and financing of terrorism, provide for remedial actions and timelines to address identified deficiencies.

The MERs reveal that some of the FATF Standards are not implemented at all, admits Dr. Shehu, but noted most countries are making significant progress to address the identified deficiencies in their AML/CFT regimes.

Nonetheless, he admitted the low level of compliance to the FATF Recommendation by GIABA member countries. It is reminiscent of the environmental peculiarities of the West African region, he said. 

The FATF Recommendations clearly encapsulate the various preventive measures that countries and stakeholder institutions are required to take. The recommendations set out principles of actions by governments and their competent authorities, as well as permit flexibility in implementation with due regard to countries’ unique circumstances and constitutional framework.

The FATF Recommendations also broadly covered four areas, that is, criminal justice system, financial system and its regulation, law enforcement and other competent authorities, and international cooperation.

Catch-22 situation

Considerable efforts to deal with money laundering and terrorism financing (ML/TF) in West Africa at the national, regional and the international levels, have been inhibited by several challenges – a catch-22 situation.

These challenges include legal and constitutional challenges; lack of proper autonomy of some regulatory and enforcement institutions, along with budgetary constraint; equipment and logistics problem; and absence of robust national ML/TF strategies, GIABA said in its latest report.

It said where national AM/TF strategies exist, they are yet to be approved or implemented. The sub region is also challenged by non functional inter-ministerial committees to coordinate efforts at the national level and ensure synergy; and weak strategic and operational cooperation at the regional and international levels.

GIABA said the major predicate crimes that generate funds for laundering in the West Africa as reported by the authorities across the sub-region are corruption, fraud (general or advance fee or tax  or bank), abuse of trust using forged documents, drug trafficking; smuggling of precious metals or stones; capital market-related crimes and cyber crimes.

Written by Modou S. Joof

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