The Future of Compliance in Africa was the theme of a roundtable discussion jointly convened by Ernest Honya, President of the Association of Certified Compliance Professionals in Africa (ACCPA), and Hugh Jones, President and CEO of Accuity. 19 people attended from organisations which included commercial banks, GIABA, central banks, FIUs and universities to discuss four key issues relating to the future of compliance in Africa:
- Discussion 1: Jurisdiction – how major sanctions lists affect African banks
- Discussion 2: PEPs – the importance of screening them, how to identify them and how the notion of PEP in Africa differs from that in the West
- Discussion 3: African Compliance – how to satisfy local/regional needs while meeting international standards
- Discussion 4: Trade Based Money Laundering – tackling this new phenomenon and screening dual-use goods
This is the third of four posts on these content discussions that will appear on the Accuity Insights blog. This one focuses on the third session on local African needs versus international standards and below is an extract of the ACCPA’s write up of that discussion, together with the recommendations from the day.
A key part of this discussion was the idea of implementing a local sanctions list and potentially fines or penalties issued by local regulators, which could help to raise compliance standards across the continent.
Other observation by participants included:
- That criminal behaviour appears to be moving to smaller, regional banks
- KYC is difficult when a number of addresses share the same utility bill
- De-risking will accelerate and unbanked will find alternatives which are more dangerous
The following extract is reprinted from the ACCPA Compliance Journal, March/April 2016 with permission from ACCPA.
The third round of discussions at the Future of Compliance in Africa Roundtable centred on how to satisfy local/regional regulatory requirements while meeting international standards.
Accuity President & CEO, Hugh Jones, set the tone for the discussion by stating that there is an increasing shift away from large regional banks towards mid-size and smaller banks by money launderers and criminal groups. According to Hugh Jones, this has become the case because mid-size and smaller banks provide a low profile avenue for money launders who seek to evade regulatory measures to hide their proceeds.
Mr. Pattison Boleigha of Access Bank took the lead in addressing this issue by highlighting that FATF should be involved in addressing these specific issues. In addition, Mr. Boleigha pointed out that money laundering as a concept is not fully understood in the same light by all countries. In response to this, Mr. Ulanga Martins added that understanding African typologies is the first step to anti-money laundering knowledge.
Mr. Idrissa Diop of Ecobank pointed out that within an African context, the central bank is responsible for issuing licences and as such should be the first point of entry in addressing national needs. In response to this, Mr. Alexander Cuffy, Chief Executive Officer of the Financial Intelligence Unit in Liberia, alerted the group to the ineffectiveness of the central bank in dealing with compliance issues due to the inapplicability of relevant laws.
The discussion turned to KYC and a number of issues were cited as impediments in fulfilling proper KYC processes. Mrs Subuola Abraham of GT Bank provided the group with a practical example of a KYC issue in her country – the inability of customers in providing accurate addresses upon consultation. Mrs Abraham suggested that one possible solution to this could be the collaboration of government and electricity companies, whereby electrical companies provide the government with the details of the property linked to the prepaid card of that specific customer. In addition to this, Mr Danny Luswilli, Chief Compliance Officer of Stanbic Bank Zambia, suggested that other informal methods should be explored in trying to locate the address of a customer.
Mr. Kopano Mufaya, Head of Compliance at Zambia National Commercial Bank reiterated the importance of complying with international regulations and highlighted that other than using a risk-based approach, individual banks are responsible for ensuring that FATF requirements are met. This view was supported by Mr. Muhammad Mustapha Abdul Rahman, Head of Monitoring and Analysis at the Nigerian Financial Intelligence Unit who added that, amongst other needs, there is a requirement for a shared understanding across the different perspectives and for the creation and collaboration of the relevant experts to come together and work on best practices for each African country.
Participants made a number of practical suggestions on how compliance in Africa can be improved. The recommendations were not formally adopted and have no official status. Nevertheless, participants considered that the recommendations provided useful suggestions for follow-up and implementation of future compliance policies and strategies.
- Create, implement, and maintain a network of compliance experts on key pressing issues within an African context.
- Explore the possibilities for obtaining KYC information by collaborating with member state banks and sharing KYC processes.
- Encourage a culture of information sharing between banks across Africa and internationally.
- Support member states in their AML processes by sharing best practices.
- Compile more comprehensive and detailed information, regarding KYC, AML and CFT best practices.
- Hold in-service training for banking staff regarding KYC procedures.
- Encourage collaboration with non-governmental and governmental organisations and the banking sector.
Take a look back at the last two blogs in the series:
Keep an eye out for the next and final post in this series on African compliance over the coming weeks.