At a recent meeting of African banks, regulators and industry bodies from 12 countries, the call for the creation of a pan-African sanctions list, in the absence of a dedicated list for the continent, like the US Treasury’s OFAC list, was the main talking point.
Accuity, the global provider of risk and compliance, payments and know-your-customer solutions, met with the Association of Certified Compliance Professionals in Africa (ACCPA), commercial banks, GIABA, central banks, FIUs, and universities to discuss four key issues relating to the future of compliance in Africa – Sanctions, PEPs, Compliance and Trade-Based Money Laundering (TBML).
Hugh Jones, CEO at Accuity, said: “We worked with the ACCPA to share international and regional experience. Our objective was to better understand the African perspective on a range of compliance issues and work together to find recommendations for how to address these issues in Africa.”
On Sanctions, there was broad consensus that Western sanctions lists solve global problems whereas an African list, with consolidated sanctions within the region, would be the best way to target distinctly African issues.
Idrissa Diop, Group Head of Compliance at EcoBank summarised: “With international sanctions, we see a major imbalance between Western practices and local African practices. For African banks, monitoring international sanction lists is not an issue, since the information is readily available and regularly updated. Local banks would benefit from regular updates of the sanctions issued by African authorities, in order to secure their respective licences.”
Pattison Boleigha, Chief Conduct & Compliance Officer at Access Bank Plc commented: “Compliance in Africa gets little protection from local law and this creates a barrier to global best practices. A greater degree of political will for local regulation and enforcement is necessary to drive change.”
There was debate around which authority should assume responsibility for facilitating this change, with agreement from most participants that any solution would need to be politically-driven. Participants questioned whether the African Union could be called upon to implement a sanctions list for the continent, similar to the European Union’s sanctions list.
Adama Coulibaly, Director General of GIABA, suggested: “Boosting compliance in Africa requires a comprehensive approach. As it goes beyond mere compliance with laws and technical standards, compliance raises the need to create and implement a global network that may promote the sharing of information and best practices in real time.”
All agreed the solution will involve collaboration between regional and central banks and will need regulatory and government support.
Other observations were:
Politically Exposed Persons (PEPs):
- Africa should adopt a wider definition of PEPs than the West given the number of different organisations involved in political activity
- The notion of Prominent Influential Persons (PIPs) was raised, with participants stressing the importance of local influencers, such as religious leaders or chiefs of provinces. The term ‘PIP’ was recently identified by the Banking Association South Africa as a deviation from the internationally accepted terminology.
Regional/local needs in the context of international regulation:
- A local sanctions list and the potential for fines or penalties issued by local regulators would be taken seriously and would help to raise compliance standards across the continent
- Criminal behaviour appears to be moving to smaller, regional banks
- KYC is difficult when a number of addresses share the same utility bill
- “Derisking” by larger global banking institutions will accelerate and the unbanked will find alternatives to meet their demand which introduces risk
Trade-Based Money Laundering (TBML):
- This is a growing issue but there is a lack of regulatory pressure, with banks currently suffering little to no monetary loss if TBML occurs
- The majority of global trade transactions are made in US dollars and are therefore subject to OFAC standards – all members of the round table agreed with the importance of respecting and complying with such international regulation
- Accuity representatives highlighted the need to identify and prevent the shipping of dual use and controlled goods lists to sanctioned or high risk jurisdictions
Ernest Honya, Chairman and President, ACCPA, concluded: “Compliance is both a global and a local phenomenon. All over the world, compliance professionals are constantly seeking local expertise to solve their most challenging problems. For African compliance, we look forward to building collaborative, information sharing networks within our compliance community and beyond.”
Notes to editors
About Accuity and FircoSoft
Accuity, the leading global provider of risk and compliance, payments and know-your-customer solutions, comprises pioneering FircoSoft and Bankers Almanac. Our unmatched data and technology services deliver the most comprehensive sanctions screening, optimal payment efficiency, compliant transactions, bank counterparty insight and AML screening success. Accuity is owned by one of the world’s leading business-to-business data and content providers, RBI, and part of RELX Group.
The Association of Certified Compliance Professionals in Africa (ACCPA) is a continental network of experienced and certified Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) professionals working on the ground in Sub-Saharan Africa. ACCPA currently has over 200 members in 22 countries with 17 chapters in 17 countries. The ACCPA network allows AML compliance professionals in Sub-Saharan Africa to come together to share knowledge, ideas, expertise, and best practices amongst themselves with the aim of gaining a better understanding of Africa’s ever-changing AML regime. While ACCPA membership is open to all AML compliance professionals in Sub-Saharan Africa, the association places a prime focus on AML compliance professionals at African-owned/non-international financial institutions.
About the Ghana roundtable
The round table took place in Accra in March 2016 with 19 participants from the Association of Certified Compliance Professionals in Africa (ACCPA), commercial banks, GIABA, central banks, FIUs, and universities. The one day event was coordinated by representatives of Accuity’s Africa Sales Team – Carlos Trinanes and Alfred Pobi and moderated by Accuity’s CEO and President, Hugh Jones. The topics covered were as follows. For more detailed information on the discussions please see the Accuity Insights blog.
- Session 1: Jurisdiction: how major sanctions lists affect African banks
- Session 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
- Session 3: African Compliance: how to satisfy local/regional needs while meeting international standards
- Session 4: Trade Based Money Laundering: tackling this new phenomenon and screening dual-use goods