–Liberia’s Inter-Ministerial AML/CFT Committee, GIABA Commit
Liberia’s Inter-Ministerial Anti-Money Laundering and Countering the Financing of Terrorist (AML/CFT) Steering Committee and the Inter-governmental Action Group Against Money Laundering in West Africa in separate remarks at GIABA ongoing compliance summit, which is taking place in Monrovia, pledged to individually identify mitigating measures and called for coordinated efforts against emerging risks and changes to the Financial Action Taskforce (FATF) standards and implications for the private sector in West Africa.
Addressing 150 participants from West African countries on Monday, July 22, 2024 in Monrovia at the GIABA compliance summit opening session, Liberia’s Justice Minister and Attorney General, Cllr. N. Oswald Twehexpressed the country’s commitment and preparedness to detect FAFT’ evolving risks and changes by means of enforcing robust legal actions to help safeguard Liberia’s private sector and the West African region as well.
According to Cllr. Tweah, Liberia is promoting the culture of compliance among all reporting entities in the country by the stringent enforcement of AML/CFT laws and regulations to serve as strong deterrence against launderers, enablers and suspected criminals who are involved in suspicious financial activities that are associated with money laundering.
He emphasized that the Ministry of Justice, the Financial Intelligence Agency of Liberia and other competent authorities in Liberia are effectively and technically strengthen to exercise readiness for the enforcement of actionable AML/CFT measures against institutions and individuals who are non-compliance reporting entities, but their financial transactions have substantial pieces of evidence related to money laundering and other financial crimes.
“In the dynamic and ever-evolving landscape of global finance, the importance of compliance cannot be overstated. The Financial Action Task Force (FATF) standards serve as the bedrock upon which our financial integrity is built, ensuring that our systems are resilient against money laundering, terrorist financing, and other financial crimes. As these standards evolve to meet new and emerging risks, it is imperative that we, as a region, stay ahead of the curve and adapt swiftly and effectively”, the Liberian Justice Minister intoned.
Cllr. Tweah stressed that the private sector plays an indispensable role in this endeavor- businesses, financial institutions, and other private entities are at the frontline of implementing these standards. “Their vigilance, adherence to compliance protocols, and proactive measures are crucial in safeguarding our financial systems. This summit provides a unique platform for dialogue, knowledge sharing, and collaboration, enabling us to collectively navigate the complexities of emerging risks and the changes to FATF standards”.
He continues: as you deliberate over the next few days, I urge all participants to engage actively in discussions, share best practices, and explore innovative solutions. “Our goal is to forge a robust and unified front against financial crimes, ensuring that our region remains a safe and attractive environment for legitimate economic activities.”
For his part, the FIA Officer-In-Charge, Mohammed A. Nasser, overwhelmingly welcomed the West African delegates to the GIABA compliance summit, and encouraged them to make maximal use of the training.
According to the OIC, substantial breaches are presently existing regarding the operational enforcement of preventive AML/CFT policies and actions by regulated entities based on numerous issues such as, inability to understand risks, ineffective customer due diligence, weak system to monitor transactions and challenges facing suspicious transaction reporting systems.
He cautioned compliance practitioners who are currently practicing in Liberia and the West Africa region to judiciously analyze the mutual evaluation reports and include the appropriate results and recommendations into their risk assessments and AML/CFT programs to ensure continuing compliance with global AML/CFT standards.
He expressed obligation to combat illicit financing and stressed that the GIABA compliance summit aims at raising awareness among critical stakeholders particularly, the private sector and Financial Intelligence Units (FIUs) regarding evolving money laundering, Terrorist Financing, and Proliferation Financing (AML/CFT/PF) activities.
“The summit also intends to reinforce participants’ capacity to address evolving risks and align their compliance frameworks with the reviewed FATF standards and methodology.
The FIA OIC narrated that the compliance summit underlines the significance of sharing experiences and identifying challenges hindering effective AML/CFT enforcement, with the goal of enabling better compliance across the West African region.
Mr. Nasser lauded GIABA for its determined efforts in stimulating the FAFT standards in West Africa.
He added that GIABA is executing its obligation with impartiality and neutrality through the mutual evaluation method. “The mutual evaluation process is a peer review mechanism, which is a demanding procedure, directed by GIABA, highlighting technical compliance and effectiveness of execution of the FAFT standards.
Also speaking at the opening session of the compliance summit, GIABA Director General, Edwin W. Harris elaborated that the global compliance landscape keeps evolving with new and emerging Money Laundering, Terrorist Financing and Proliferation (ML/TF/PF) risks.
According to the Director General of GIABA, understanding and effectively addressing these emerging risks are essential for deepening compliance and ensuring the integrity and stability of the financial system; and the FATF recently adopted some revisions to its Standards.
He stressed that it is therefore extremely important for compliance professionals to stay informed about these changes to ensure their organizations remain compliant.
“Mutual evaluation is a core mandate of GIABA. This peer-reviewed exercise assesses countries’ compliance with the FATF standards and the effectiveness of their actions in tackling money laundering, terrorist and proliferation financing. To date, GIABA has adopted sixteen (16) Mutual Evaluation Reports (MERs) under its 2nd round of mutual evaluations. Overall, member States have made considerable progress in implementing the technical requirements of the FATF standards, but still facing substantial challenges in taking effective action in line with the risks they are presently faced with,” the GIABA DG pointed out.
He mentioned that underperformance of enforcing AML/CFT laws and regulations has contributed to the placement of member States on the Enhanced Follow-Up process and the ICRG active review for large economies, with significant adverse impact on the perceptions and reputations of member States within the international community.
“As the 2nd round of GIABA mutual evaluation draws to a close by end of this year, I call on all member States to deeply reflect on the effectiveness of your AML/CFT efforts, continue to take practical steps to address the strategic deficiencies identified in your AML/CFT systems, and most importantly, looking forward to the 3rd round, what you must do differently to change the current narratives and achieve better outcomes in the next round, he noted.
DG Harris said significant lessons have been learnt by the assessment bodies, including GIABA, in the current and previous rounds of evaluations and the FATF Standards have been revised regularly to ensure they benefit from the lessons learnt from implementing and evaluating these standards.
“The revisions are also aimed at addressing new and emerging threats, ensuring that the FATF standards remained up-to-date and relevant, strengthening the global safeguards and further protect the integrity of the financial system, clarifying and strengthening many of the existing obligations, while maintaining the necessary stability and rigor in the Recommendations. While the revisions are expected to help countries respond more effectively to ML/TF/PF, countries, including reporting institutions, are expected to review their frameworks to meet the requirements of the revised FATF standards, the GIABA Director General narrated.
He continues: changes to the FATF standards, coupled with new and emerging risks and related issues such as new technologies and virtual assets, will continue to shape the global compliance environment. These will, no doubt, add to the current AML/CFT implementation challenges by countries, including the privatesector. Thus, there is a need for greater coordination and synergy between national authorities and private sector operators in addressing current implementation challenges and emerging ML/TF/PF risks as well as responding to the changes to the FATF standards. This is critical to changing the current narratives and for improving the performance of member States in GIABA’s 3rd round of mutual evaluation,” he explained.
According to him, the 3rd round of GIABA mutual evaluations is expected to begin in 2026 with a six- to seven-year cycle, and therefore significantly shorter than earlier rounds, which lasted nine years on average. The assessments will place greater focus on effectiveness, to ensure that countries are implementing AML/CFT laws, regulations and policies. There will also be a greater emphasis on risks and context while assessment of the effectiveness of the financial sector and the designated non-financial businesses and professions (DNFBPs) will be done separately in order to provide a clearer overview of the level of effectiveness of these distinct areas. We have commenced preparations for the 3rd round and look forward to working with all of you in this process,” Mr. Harris disclosed.
He mentioned that the ongoing Summit provides an opportunity for GIABA members and compliance officers to reflect on the emerging risk within the global compliance ecosystem, and the implication of the recent changes to FATF standards, especially on the private sector.
“The primary objective is to promote effective implementation of AML/CFT&P preventive measures and prepare the private sector for the 3rd round of GIABA mutual evaluation. The specific objectives include to: enhance awareness of participants on emerging risk and new changes to FATF standards; strengthen the capacity of participants to proactively address emerging risks and take necessary steps to align their compliance frameworks/programmes to the revised FATF Standards; provide a platform for participants to share experiences, including identifying key challenges impeding effective implementation of AML/CFT preventive measures and best practices that will facilitate AML/CFT compliance in the region; and raise awareness of the private sector on GIABA’s preparation for the 3rd round of evaluation”, DG Harris intoned.
The GIABA DG narrates: “to achieve these objectives, a team of seasoned professionals has been carefully assembled to lead the discussions in the various sessions. I wish to call on all delegates to take full ownership and actively participate in the program, including sharing their experiences and drawing inspiration from good practices of other practitioners. It is our expectation that the interactions and exchange of experiences during this Summit and the follow-up you will give to them in your institutions will further enhance AML/CFT compliance in the region and improve performance in the next round of mutual evaluations.”
He emphasized that the Financial Intelligence Units (FIUs) and the private sector remain GIABA strategic and formidable allies in the implementation of effective measures against ML/TF in the region.
Delivering the keynote address on behalf of the Central Bank of Liberia Executive Governor, Musah A. Kamara, Senior Technical Advisor to the CBL Governor, explained that the evolution of the Financial Action Task Force (FATF) Standards has played a pivotal role in shaping the global financial system in combating money laundering, terrorist financing, financing of proliferation of weapons of mass destruction and other threats to the international financial system.
According to him, understanding the historical evolution of these standards provides valuable insights into how we have arrived at the current robust framework and the future direction the world takes in the face of a dynamic and complex environment.
Accordingly, he said FATF’s mandate has expanded from AML to include, most recently, the countering the Financing of Terrorism (CFT) and addressing the proliferation of weapons of mass destruction.
“The FATF’s 40 Recommendations are internationally recognized standards for combating money laundering and terrorist financing, serving as a cornerstone for financial integrity worldwide. These standards have undergone significant changes in response to changes in our global environment and complex network of financial crimes,” Mr. Kamaraintoned.
He reflected on the tragic events of September 11, 2001 as a wake-up call for the urgent need to address terrorist financing. “The current phase of FATF’s work is characterized by an increased focus on effectiveness and continuous improvement such as measures against Cybercrime, digital currencies and environmental crime.”
Mr. Kamara highlighted that “Risk Assessment and Policy Coordination are important measures and as such, countries must understand the risks they face and develop appropriate policies and coordination mechanisms.
“As we look forward to the third round of the mutual evaluation process, Liberia needs to prepare to demonstrate the level of progress it has made and continue to make in its compliance status. The determination of the new leadership of the Financial Intelligence Agency (FIA) with the support of all national stakeholders, is a positive signal in moving Liberia forward in its compliance efforts. The CBL remains an important player in this process,” the CBL senior staff concluded.
The summit, under the theme “West Africa Summit, 2024 Emerging Risks and Changes to FATF’s Standards/Methodology- Implications for the Private Sector’, formally opened at the Monrovia City Hall, and is expected to run from July 22-25. It is geared towards strengthening private sector capacity to implement AML/CFT measures, pending Round Three (3) of their Counties’ National Risk Assessments (NRAs) and subsequent Mutual Evaluations (ME).
