As Sierra Leone is witnessing the proliferation of financial houses which can be easily exploited by criminals and terrorists for illicit transactions, the Bank of Sierra Leone yesterday started a two-day seminar to discuss guidelines to prevent terrorist financing and money laundering.
In his keynote address at the Bank of Sierra Leone Complex at Kingtom, Minister of Finance, David Carew revealed that the Government of Sierra Leone is committed to the fight against money laundering and related offences.
The Government like many of its global partners fully understands the magnitude of the problem of money laundering and the financing of terrorism, he said.
The Minister stressed that the ongoing cocaine trafficking proceedings in Court have exposed a more threatening dimension of the problem of money laundering with the possible terrorist undercurrent that has threatened not only Sierra Leone, but the whole West African sub-region.
He intimated that the rapidity with which our financial sector is growing which is the conduits through which money follows is the possible target of such threats; therefore, he added, “in our effort to deter and detect money laundering, the banking sector should be seen as an important and first line of defense and we need the support of the banks to win this fight,” he stressed.
Deputy Governor of the Bank of Sierra Leone, Andrina Coker said the occasion is timely as the Bank in collaboration with the inter-Ministerial core committee and other stakeholders are currently reviewing the anti-money laundering Act 2005 and developing regulations in line with international standards.
This, she said “is to enhance our anti-money laundering and combat the financing of terrorism compliance programme.”
The Deputy Governor maintained that the hosting of the seminar is a manifestation of the commitment to fight money laundering and fight terrorist financing.
Since the event of September 2001 in New York, she recalled, “there has been increase international efforts to combat money laundering and terrorist financing. The impact of money laundering and related offences of the domestic financial system as well as the international market cannot be over emphasized,” she said.
She explained that money laundering does not only threaten to destabilize the global financial system, but can undermine confidence in the domestic system and hence hinder the economic growth of the Country.
“It is important to recognize the fact that criminals have tremendous creativity and there is a trend of increasing complexity in their illicit exploit as counter measures are developed and adopted in various jurisdictions,” she said.
This situation, she said, “is worsening by rapid changes in technology, increase in regulation integration of financial system and the development of complex financial instrument to broaden both the money and capital market. As a consequence criminals are now using banks and other financial institutions to deposit and transfer the proceeds of the illegal activities in the hope of concealing the true origin; and beneficial owners of the these funds the use of banking industry by criminals would make these institutions highly susceptible to operational, legal and operational risk which would eventually result in significant financial losses,” she explained. Recognizing this challenge, the Deputy Governor stressed, “the Bank of Sierra Leone in the quest to maintain soundness of financial institutions and over all stability of the financial system would want to ensure that these institutions have adequate control and procedures in place so that they know there customers when dealing with them.”
She explained that it is the responsibility of the Bank of Sierra Leone to ensure that financial institutions have minimum standards and internal control that allowed them to adequately know there customers. “Adequate due diligence on new and existing customers is an essential component of these controls. The Bank of Sierra Leone would therefore encourage banks to put in place effective procedures to ensure that all persons conducting business in their institutions are properly identified and illegitimate transactions are discouraged,” Deputy Governor Coker emphasized.
In his opening statement the Chairman of the seminar, Sampha Koroma said the word toxicity has come into the banking language “we have to prevent toxic items,” he said. By Ophaniel Gooding