Money laundering - the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activity - is conducted by the by the use of increasingly sophisticated methods for moving funds across borders.  The economic and social impact of money laundering is particularly devastating for developing countries with vulnerable financial systems, damaging the reputation of respected institutions and creating a barrier to foreign direct investment.

With awareness of the problem being the first step towards its solution, Interims for Development in collaboration with the National Banking College of Ghana, a leading training institution for banks and the financial sector in West Africa, held a seminar in June 2004 entitled ‘Understanding and Combating Money Laundering’.  The three day event which took place in Accra, Ghana, was designed to introduce delegates to the regulatory frameworks in place in developed countries, to identify methods of money laundering and its application in Africa and to offer practical advice in developing strategies and approaches to combat money laundering. 

The seminar, which was designed to be interactive and participatory and to enable delegates to share experiences and develop action plans for their own institutions, was facilitated by David Swanney, a British Chartered Accountant and experienced banking regulator, and an Interim Manager with Interims for Development.

As the author of the Joint Money Laundering Steering Group's revision of money laundering guidance notes and with 20 years experience at the Bank of England and, latterly, the Financial Services Authority, David was able to share his expertise in the area with over 30 delegates from a range of Ghanaian banks and financial institutions as well as the Ministries of Finance and Justice and the National Security Service. 

In David’s experience, the seriousness of the subject cannot be overstated.  "Money laundering, whether it is linked to drugs or terrorism, or whether it is the processing of more mundane 'everyday' crime, affects us all, “he says.  “It affects the stability and reputation of countries, the credibility of financial systems, and the reputation (and financial soundness) of individual firms in the financial sector.  It is no respecter of borders or jurisdictions, but will naturally gravitate towards those countries where awareness of the issue, business standards, staff training – and, in some cases, the lack of political will to tackle the issue - is low”. 

Poor infrastructure and communication systems and a widespread distrust of banking systems all contribute to the difficulties of implementing effective money laundering measures in Africa.  The widely prevalent cash and carry economy, where large cash transactions are common, provides a great advantage to money launderers. 

Despite the efforts by African governments to combat money laundering, widespread poverty makes it difficult to effectively police money laundering, while ongoing and often systemic corruption acts as a further constraint.

However, developing countries who fail to meet international standards in anti-money laundering measures could suffer a loss of revenue as companies in countries that do meet these standards become increasingly reluctant to do business.  Failing to control money laundering also creates vulnerability for countries in Africa, and elsewhere in the developing world, in relation to narcotics trafficking and international terrorism.

"For good or ill, whether justified or not, West Africa has a reputation that appears to attract money launderers” says David.  “We all need to do what we can to raise awareness of the issue in this region, and to share our experiences in establishing systems and approaches to combat this destabilising activity.”

Since 2002, David has worked with the British Bankers' Association on money laundering prevention and accounting issues and, with this seminar, was able to address the key issues of how to identify money laundering, provide case studies on how it is conducted, as well as guidance and advice on training staff and communicating anti-money laundering to customers.

In common with other professionals who have offered their professional services to Interims for Development, David did not hesitate to take on the assignment when he was approached by the organisation.  As he admits, “I was very pleased to learn of Interims’ activities in this area, and to be asked to lead the seminar in Ghana to share the UK’s experience with these issues.”

Combating Money Laundering in Africa