R 201604Z NOV 08
FM AMEMBASSY ACCRA
TO SECSTATE WASHDC 7268
INFO DEPT OF JUSTICE WASHDC
DEPT OF TREASURY WASHDC

UNCLAS  ACCRA 001475 
 
FOR INL 
FOR SCT 
FOR EEB 
FOR AF/W AKUNNA COOK 
JUSTICE FOR AFMLS, OIA, AND OPDAT 
TREASURY FOR FINCEN 
 
E.O. 12958:N/A 
TAGS: ECON EFIN SNAR KCRM KTFN GH
SUBJECT: Ghana: 2009 International Narcotics Control 
Strategy Report, Vol. II 
 
REF: STATE 103815 
 
¶1. Ghana is not a regional financial center, but due 
to continuing turmoil in the region, GhanaQs 
financial sector is likely to become more important 
regionally as it develops. Most of the money 
laundering found in Ghana involves narcotics and 
public corruption.  Ghana is a significant 
transshipment point for cocaine and heroin.  Police 
suspect that criminals use nonbank financial 
institutions, such as foreign exchange bureaus, to 
launder the proceeds of narcotics trafficking. 
Criminals can also launder their illicit proceeds 
through investment in banking, insurance, real 
estate, automotive import, and general import 
businesses.  Reportedly, donations to religious 
institutions have been used as a vehicle to launder 
money.  The number of Qadvance feeQ or 419 fraud 
letters, known as Sakawa in Ghana, that originate 
from Ghana continues to increase, as do other 
related financial crimes, such as use of stolen 
credit and ATM cards. 
 
¶2.  Informal activity accounts for about 45 percent 
of the total Ghanaian economy.  GhanaQs 2000 census 
found that 80 percent of employment was in the 
informal sector.  Only a small percentage of the 
informal economy, however, relies on the banking 
sector.  Because some traders smuggle goods to evade 
tax and import counterfeit goods, black market 
activity in smuggled goods is a concern.  In most 
cases the smugglers bring the goods into the country 
in small quantities, and Ghanaian authorities have 
no indication that these smugglers have links to 
criminals who want to launder money gained through 
narcotics or corruption. 
 
¶3.  Ghana has designated four free trade zone areas, 
but the Tema Export Processing Zone is currently the 
only active free trade zone.  Ghana also licenses 
factories outside the free zone area as free zone 
companies.  Free zone companies must 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 officials do not suspect that trade- 
based money laundering (TBML) schemes are a major 
problem in the free trade zones.  Although the 
Government of Ghana (GOG) has instituted 
identification requirements for companies, 
individuals, and their vehicles in the free zone, 
monitoring and due diligence procedures are lax. 
 
¶4.  The GOG has 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 government is promoting efforts to model GhanaQs 
financial system on that of the regional financial 
hub in Mauritius.  In line with this, the GOG passed 
the Banking (Amendment) Act, 2007 Act 738, on June 
18, 2007.  The law establishes the basis for the 
provision of international banking services in Ghana 
and requires the Bank of Ghana to authorize offshore 
banks.  Prior to this law, the Bank of Ghana 
licensed only reputable and internationally active 
banks.  On September 7, 2007, Barclays Bank of Ghana 
Ltd., a subsidiary of Barclays Bank PLC, UK became 
the first to start operating as an offshore bank. 
The Bank of Ghana is in the process of drafting 
regulations for offshore banks.  A Financial 
Services bill, which will provide the legal 
framework for the non-bank financial services 
component of the international financial services 
center, is before parliament and expected to be 
passed before the end of December 2008.  To reduce 
the duplication in processes and information 
exchange, the law will also establish a Financial 
Services Authority which will absorb the functions 
of the National Insurance Commission and the 
Securities Exchange Commission.  Ghana will 
therefore have two regulators for the financial 
services sector; Bank of Ghana will be responsible 
for all banking and deposit taking business, and the 
Financial Service Authority will handle all other 
financial services.   The bill stipulates that the 
two institutions will establish a National Financial 
Services Coordination Committee to exchange 
information. 
 
¶5.  Nearly six years after drafting began, in 
January 2008 the Parliament passed GhanaQs Anti- 
Money Laundering (AML) law. Accompanying regulations 
to the law have also been passed. The law covers 
obliged institutions and their reporting and 
disclosure requirements; the role of supervisory 
authorities; preventive measures; customer 
identification and record keeping requirements; and 
rules for suspicious transaction reporting. Ghana 
has bank secrecy laws, but allows the sharing of 
information with relevant law enforcement agencies. 
Law enforcement officials can compel disclosure of 
bank records for drug-related offenses.  Bank 
officials have protection from liability when they 
cooperate with law enforcement investigations. The 
new AML law requires banks and individuals to report 
suspicious transactions. 
 
¶6.  The banking sector lacks a strong regulatory 
framework to prevent money laundering and report 
suspicious transactions, although entities recognize 
the importance of such a framework. The Bank of 
Ghana allows two types of foreign currency bank 
accounts: the foreign exchange (FE) account and the 
foreign currency (FC) account. The FE account is 
tailored to foreign currency sourced within Ghana 
while the FC account targets transfers from abroad. 
Bank of Ghana regulations instituted in December 
2006 under the Foreign Exchange Act allow U.S. 
$10,000 per year to be transferred from an FE 
account without documentation and approval from the 
Bank of Ghana. The regulations also allow import 
transactions of up to $25,000 without initial 
documentation for FE accounts. There are no limits 
on the number of such transactions made on each 
account or on the number of such accounts that an 
individual can hold. The law does not permit foreign 
exchange bureaus to make outward transfers. Local 
banks strictly follow Qknow your customerQ rules. 
Ghana has no effective system to obtain data on an 
individualQs dealings with all the banks in Ghana. 
 
¶7.  Ghana has a cross-border currency reporting 
requirement. However, Ghanaian authorities have 
difficulty monitoring cross-border movement of 
currency. In an operation in 2008, the national 
security office detected that millions of dollars 
worth in foreign currencies have been entering Ghana 
through the Togo-Aflao border, which is basically 
repatriated money.  The money is first transported 
from Ghana across the border undeclared and then 
returned through the same border but declared on the 
Foreign Exchange Declaration Form.  This then allows 
the individual to take the money out of Ghana 
legally.  In a bid to curb this, the Bank of Ghana 
directed that effective October 20, 2008, the 
highest sum of money permitted to be carried by an 
individual arriving in the country is $10,000 or its 
equivalent.  The directive was, however, ambiguous 
on whether amounts in excess of the $10,000 should 
only come through the bank or can still be 
transported.  This defeats the Foreign Exchange law 
purpose of ensuring that all money transfers above 
$10,000 go through the banks for traceability. 
 
¶8.  The AML law calls for the establishment of a 
Financial Intelligence Unit (FIU), overseen by the 
National Security Council.  Ghana plans to fund the 
FIU, which is yet to be formed, through government 
grants and donations.  The FIU will not investigate 
crime but will gather and analyze intelligence to 
help in identifying proceeds of unlawful activity 
and the perpetrators of the crimes.  The FIU will 
have the authority to obtain information from other 
government regulatory authorities and from financial 
institutions.  The GOG arrested, and is currently 
prosecuting, a flight attendant and two accomplices 
in August 2008 and are currently under prosecution 
for attempting to launder #59,870.  No arrests or 
prosecutions related to terrorist finance were made 
in 2008. 
 
¶9.  The Narcotic Drug Law of 1990 provides for the 
forfeiture of assets upon conviction of a drug 
trafficking offense.  A February 2007 court order 
compelled authorities to release seized assets in a 
1991 landmark narcotics trafficking case which 
resulted in a ten-year jail sentence of the convict, 
and return the assets to the owners.  The ex-convict 
had appealed the seizure, arguing that the assets 
did not belong to him.  The draft Proceeds of Crime 
Bill, pending since 2006, contains provisions 
dealing with pre-emptive measures, confiscation and 
pecuniary penalty orders, search and seizure, and 
restraining orders and realization of property.  The 
draft Proceeds of Crime bill will merge with the 
existing Serious Fraud Office Law, 1993 (Act 466). 
The Serious Fraud Office, established by this law, 
investigates corruption and crimes that have the 
potential to cause economic loss to the state. 
 
¶10.  Ghana has criminalized the financing of 
terrorism, as required by United Nations Security 
Council Resolution 1373.  The Anti-Terrorism Bill, 
which came before Parliament in 2005, was passed on 
July 18, 2008.  The law addresses terrorist acts, 
support for terrorist offenses, specific entities 
associated with acts of terrorism, and search, 
seizure, and forfeiture of property relating to acts 
of terrorism.  The law imposes a term of 
imprisonment of between seven years and twenty-five 
years for any offense under the law. The Bank of 
Ghana has circulated the list of individuals and 
entities on the UNSCR 1267 Sanctions CommitteeQs 
consolidated list to local banks, but no Ghanaian 
entities have identified assets belonging to any of 
the designees. 
 
¶11.  Although current Ghanaian law does not allow 
for the sharing of seized narcotics assets with 
other governments, the Narcotic Drug Law of 1990 
includes provisions for the sharing of information, 
documents, and records with other governments.  It 
also provides for extradition between Ghana and 
foreign countries for drug-related offenses.  The 
United States has not requested financial 
investigative assistance from Ghanaian authorities. 
 
¶12.  Ghana is a member of the Inter-Governmental 
Action Group Against Money Laundering and Terrorist 
Financing in West Africa (GIABA), a regional body 
modeled after the Financial Action Task Force (FATF). 
Ghana has bilateral agreements for the exchange of 
money laundering-related information with the United 
Kingdom, Germany, Brazil, and Italy.  Ghana is a 
party to the twelve UN conventions on terrorism, 
including the UN International Convention for the 
Suppression of the Financing of Terrorism.  Ghana is 
a party to the 1988 UN Drug Convention, and the 
African Union Convention on Preventing and Combating 
Corruption.  In June 2007, Ghana ratified the UN 
Convention against Corruption.  Ghana has not signed 
the UN Convention against Transnational Organized 
Crime.  Ghana has endorsed the Basel Committee's 
Core Principles for Effective Banking Supervision. 
 
¶13.  The GOG should move swiftly to implement the 
AML Bill, and should expand the list of predicate 
crimes to comply with international standards.  The 
GOG should improve capacity among the agencies 
impacted, and establish its FIU.  The GOG should 
make every effort to pass asset seizure and 
forfeiture legislation that comports with 
international standards as soon as possible.  Once 
the laws are in place, Ghana should take the 
necessary steps to promote public awareness and 
understanding of financial crime, money laundering 
and financing of terrorist activities.  Ghana should 
immediately release regulations and guidance for its 
new offshore entities, and draft legislation to 
ensure that offshore entities are treated 
identically to the onshore sector under the AML law. 
Additionally, the GOG should require that the true 
names of all offshore entities are held in a 
registry accessible to law enforcement.  The GOG 
should increase cooperation and information sharing 
with other governments.  Ghana should also become a 
party to the UN Convention against Transnational 
Organized Crime. 
 
¶14. Post's POC for UNSCR is Economic Section Chief 
Philip Cummings; email: cummingspm@state.gov. 
 
TEITELBAUM