BANK OF GHANA AND FINANCIAL INTELLIGENCE CENTRE

1 I BANK OF GHANA AND FINANCIAL INTELLIGENCE CENTRE ANTI- money LAUNDERING/ COMBATING THE FINANCING OF TERRORISM & THE PROLIFERATION OF WEAPONS OF MASS DESTRUCTION (AML/CFT& P) GUIDELINE FOR BANKS AND NON-BANK FINANCIAL INSTITUTIONS IN GHANA JULY, 2018 ii Contents FOREWORD .. vii LIST OF ACRONYMS & ABBREVIATION .. viii INTRODUCTION .. ix PURPOSE AND OVERVIEW OF THE GUIDELINE .. ix THE OBJECTIVE .. x PART A .. 1 AML/CFT& P DIRECTIVES .. 1 GENERAL GUIDELINES ON INSTITUTIONAL 1 ASSESSING AML/CFT RISK AND APPLYING A RISK BASED APPROACH .. 1 APPOINTMENT OF ANTI money LAUNDERING REPORTING OFFICER AND DUTIES.

2 2 COOPERATION WITH COMPETENT AUTHORITIES .. 3 SCOPE OF UNLAWFUL ACTIVITIES .. 3 MEASURES TO BE TAKEN AGAINST ML/TF .. 4 CUSTOMER DUE DILIGENCE (CDD) .. 5 CONDUCTING CDD .. 5 CDD PROCEDURES .. 5 HIGHER-RISK CATEGORIES OF CUSTOMERS .. 7 LOWER RISK CUSTOMERS, TRANSACTIONS OR PRODUCTS .. 8 TIMING OF VERIFICATION .. 9 FAILURE TO COMPLETE CDD .. 10 EXISTING CUSTOMERS .. 11 POLITICALLY EXPOSED PERSONS (PEPs) .. 11 CROSS-BORDER CORRESPONDENT BANKING .. 13 NEW TECHNOLOGIES AND NON-FACE-TO-FACE TRANSACTIONS .. 14 iii RELIANCE ON INTERMEDIARIES AND THIRD PARTIES ON CDD FUNCTION.

3 14 MAINTENANCE OF RECORDS ON TRANSACTIONS .. 16 ATTENTION ON COMPLEX AND UNUSUAL LARGE TRANSACTIONS .. 16 SUSPICIOUS TRANSACTIONS, COMPLIANCE MONITORING AND RESPONSE TO SUSPICIOUS TRANSACTIONS .. 17 INTERNAL CONTROLS, COMPLIANCE AND AUDIT .. 18 OTHER MEASURES .. 19 SANCTIONS .. 19 SHELL BANKS .. 20 OTHER FORMS OF REPORTING .. 20 ATTENTION TO HIGHER RISK COUNTRIES .. 20 FOREIGN BRANCHES AND SUBSIDIARIES .. 21 AML/CFT EMPLOYEE-EDUCATION AND TRAINING PROGRAMME .. 22 MONITORING OF EMPLOYEE 23 PROTECTION OF STAFF WHO REPORT VIOLATIONS.

4 24 ADDITIONAL PROCEDURES AND MITIGANTS .. 24 RISK ASSESSMENT FOR NEW 24 TESTING FOR THE ADEQUACY OF THE AML/CFT COMPLIANCE PROGRAMME .. 25 FORMAL BOARD APPROVAL OF THE AML/CFT COMPLIANCE MANUAL .. 25 CULTURE OF COMPLIANCE .. 25 TERRORIST FINANCING&FINANCING OF PROLIFERATION .. 25 money OR VALUE transfer (MVT) SERVICES .. 26 WIRE TRANSFERS .. 27 Part B .. 30 KNOW YOUR CUSTOMER (KYC) PROCEDURES .. 30 DUTY TO OBTAIN IDENTIFICATION EVIDENCE .. 30 iv NATURE AND LEVEL OF THE BUSINESS .. 31 APPLY COMMERCIAL JUDGEMENT .. 31 ESTABLISHMENT OF IDENTITY.

5 32 WHAT IS IDENTITY .. 32 WHEN MUST IDENTITY BE VERIFIED .. 32 REDEMPTIONS/SURRENDERS .. 33 WHOSE IDENTITY MUST BE VERIFIED .. 33 SAVINGS SCHEMES AND INVESTMENTS IN THIRD PARTIES NAMES .. 35 PERSONAL PENSION SCHEMES .. 35 TIMING OF IDENTIFICATION REQUIREMENTS .. 35 CANCELLATION & COOLING-OFF RIGHTS .. 36 IDENTIFICATION PROCEDURES .. 37 GENRAL PRINCIPLES .. 37 NEW BUSINESS FOR EXISTING CUSTOMERS .. 38 CERTIFICATION OF IDENTIFICATION 38 RECORDING IDENTIFICATION EVIDENCE .. 39 CONCESSION IN RESPECT OF PAYMENT MADE BY POST.

6 40 TERM DEPOSIT ACCOUNT (TDA) AND INDIVIDUAL SAVINGS ACCOUNTS (ISA) .. 41 INVESTMENT FUNDS .. 42 ESTABLISHING IDENTITY .. 42 PRIVATE INDIVIDUALS .. 42 PRIVATE INDIVIDUALS RESIDENT IN GHANA .. 43 DOCUMENTING EVIDENCE OF IDENTITY .. 43 PERSONAL IDENTITY DOCUMENTS .. 44 DOCUMENTARY EVIDENCE OF ADDRESS .. 44 PHYSICAL CHECKS ON PRIVATE INDIVIDUALS RESIDENT IN GHANA .. 45 v ELECTRONIC 45 PRIVATE INDIVIDUALS NOT RESIDENT IN GHANA .. 46 PRIVATE INDIVIDUALS NOT RESIDENT IN GHANA : SUPPLY OF INFORMATION .. 47 NON FACE-TO-FACE IDENTIFICATION.

7 48 ESTABLISHING IDENTITY FOR REFUGEES AND ASYLUM SEEKERS .. 49 ESTABLISHING IDENTITY FOR STUDENTS AND MINORS .. 50 QUASI CORPORATE 50 EXECUTORSHIP ACCOUNTS .. 54 CORPORATE CUSTOMERS .. 56 HIGHER RISK BUSINESS .. 59 OTHER INSTITUTIONS .. 61 CHARITIES IN GHANA .. 62 REGISTERED 63 RELIGIOUS ORGANIZATIONS (ROs) .. 63 MINISTRIES, DEPARTMENTS AND agencies MDAs) AND OTHER PUBLIC INSTITUTIONS .. 64 FOREIGN CONSULATES .. 64 INTERMEDIARIES OR OTHER THIRD PARTIES TO VERIFY IDENTITY OR TO INTRODUCE BUSINESS .. 64 ACQUISITION OF ONE FINANCIAL INSTITUTION/ BUSINESS BY ANOTHER.

8 69 RECEIVING FINANCIAL INSTITUTIONS AND AGENTS .. 70 APPLICATIONS RECEIVED THROUGH BROKERS .. 70 APPLICATIONS RECEIVED FROM FOREIGN BROKERS .. 71 MULTIPLE FAMILY APPLICATIONS .. 71 LINKED TRANSACTIONS .. 72 DOMICILIARY ACCOUNT (DA) .. 72 PROVISION OF SAFE CUSTODY AND SAFE DEPOSIT BOXES .. 73 vi EXEMPTION FROM IDENTIFICATION PROCEDURES .. 73 FINANCIAL INCLUSION .. 74 SANCTIONS FOR NON-COMPLIANCE WITH KYC .. 75 APPENDIX A .. 75 INFORMATION TO ESTABLISH IDENTITY .. 76 APPENDIX B .. 82 DEFINITION OF TERMS .. 82 APPENDIX C.

9 95 money LAUNDERING AND TERRORIST FINANCING RED FLAGS .. 95 APPENDIX D .. 102 Further Guidance on Accountable Institutions Risk Assessment and Business/Customer Risk Rating .. 102 APPENDIX E .. 105 GUIDANCE ON ENHANCED DUE vii FOREWORD The world has experienced phenomenal growth of FINANCIAL services over the last couple of decades. This globalization has led to increased cross-border activities enhancing global FINANCIAL intermediation. Unfortunately, this development has been accompanied by a spate of transnational organized crime including money Laundering and Terrorist Financing (ML/TF) perpetuated by underground economies.

10 money Laundering and Terrorist Financing affect whole economies, and therefore impact negatively on the economic, political and social development, posing serious challenges to all countries. The need for countries to have strong anti- money laundering mechanisms, coupled with the enhancement of transparent FINANCIAL integrity cannot therefore be over-emphasized. GHANA is determined to maintain a sound FINANCIAL system and to join global efforts to minimize the scourge of money Laundering and Terrorist Financing. In pursuit of the above goal and in order to avoid the risk of under-regulation, the FINANCIAL INTELLIGENCE CENTRE (FIC) and the Bank of GHANA (BOG) is providing this Guideline to assist licensed banks and non-bank FINANCIAL institutions design and implement their respective AML/CFT compliance programmes.