Terrorism Financing Goes Beyond Mutual Evaluation Reports – FATF Boss

Vladimir Nechaev

By Patrick Baidoo with additional file from Globalnewsreel.com

(Coordinator, AML Journalists Network – Ghana)

Vice-president of the Financial Action Task Force (FATF), Vladimir Nechaev has advised its member States and regional styled bodies not to rely solely on the adoption of Mutual Evaluation Reports (MER) in determining that their financial systems are money laundering and terrorism financing compliant.

“The adoption of MER should not be an end in itself, as they should be used by each country as a starting point in working towards greater compliance with international standards and ultimately to implement an effective anti-money laundering (AML) and counter terrorism financing (CFT) policy and technological structure”.

In accordance with FATF standards and membership rules, members commit to a mutual peer review system to determine the levels of compliance with the international AML/CFT standards. These peer reviews are referred to as “mutual evaluations”.

A mutual evaluation thus involves a desk-based review of the member’s AML/CFT system as well as an on-site visit to the FATF styled regional body member State by a team of experts to have first-hand information on compliance levels, after which the mutual evaluation report is produced.

The FATF Vice President made this appeal when speaking at the 12th Inter-Ministerial Committee Meeting, organized by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) in Accra, recently.

GIABA is a West Africa FATF regional styled body which oversees that a country within this sub-region adheres to the rules and standards which have been set by FATF in adherence to check ML and TF.

He noted that MER documents concerning, Ghana, Nigeria, Cape Verde, Togo, Liberia, Sierra Leone and other African countries disclosed that some progress have been made in the fight against money laundering, however a number have still not achieved a great deal of progress hence the need to go beyond mutual evaluation reports.

“Countries in the region must carry out the necessary reforms in order to effectively fight money laundering and terrorist financing since every failure in a country’s AML/CFT system threatens not only that country but also, the regional and international financial sectors”.

Notwithstanding, Mr. Nechaev applauded Ghana and GIABA for its policies to criminalize money laundering and terrorist financing in West Africa.

Ghana’s President John Mahama, who officially opened the meeting, said money laundering was not an entirely new phenomenon in the sub-region and the African continent.

According to him, “the negative effect of money laundering has no respect for territorial boundary and that is why there is the need for all of us to put together resources and energy to confront the problem in all forms.”

“Accepting the challenge to host this event therefore is an illustration of our commitment to the sub-regional and indeed, the global effort to address this economic and security threat,” he stated.

Mr. Mahama reiterated Ghana’s determination and commitment as well as being resolute to fighting money laundering and the financing of terrorism.

“Let us collectively ensure that criminals do not use our jurisdiction to perpetrate their criminal activity. In our respective countries, we must ensure that law enforcement agencies are sufficiently empowered and resourced to detect and act proactively on suspicious activity.”

Former Nigeria Head of State and founding father of ECOWAS, Gen. Yakubu Gowon launched the Status Report on Operations of GIABA 2004 – 2013 and the GIABA 2012 Annual Report – a compendium of GIABA’s performance and achievements.

Also, Gen. Gowon acknowledged the committee’s effort in providing active policy guidelines towards the implementation of GIABA’s mandate of protecting the financial systems and “by extension, the national economy of member States from the laundering of proceeds of crime and preventing the financing of terrorism.”

The Inter-ministerial committee is the main policy making body of the community institutions.

In its 8 years of existence, the former Head of State indicated that GIABA had remained focused on its mandate and executed it to the benefit of the region.

“The growing level of sophistication of social vices and predicate crimes like high level of corruption, internet fraud and human trafficking, he emphasized, had negative repercussions on society, bringing into disrepute such values as honesty, integrity and good character”.