Money laundering prevention

The Prevention of Money Laundering and Terrorism Financing in Africa

The African Development Bank has been increasingly concerned with growing problems of money laundering (ML) and terrorist financing (TF), because of the negative incidence of ML/TF on security and financial systems in Africa, as well as the subsequent efforts to reduce poverty. More recently, there is a growing expectation by the international community and the authorities of the Bank’s Regional Member Countries’ (RMCs), including the NEPAD Heads of State and Government Implementation Committee, for the Bank to help foster the implementation of AML measures in African countries.

In response to the challenge of ML/TF, a Bank Group Money laundering Task Force (AMLG) was set up in 2005 to develop a Bank strategy on combating Money laundering and Terrorist Financing.  Subsequent discussions among AMLG members reached a preliminary consensus that: first, money laundering and terrorist financing are part of global problems affecting developed countries and developing countries, and that RMCs need assistance to combat related financial crimes; second, that the Bank Strategy should be devised and implemented within the broader context of its existing policies with regard to poverty reduction and good governance; third, that the Bank should not (and cannot) duplicate ongoing efforts and programs by specialized organizations such as the Financial Action Task Force (FATF). The Bank should instead maximize its FATF observer status by attending major FATF meetings and see that our evolving AML/CTF position (but also Bank governance stance) be known and finally that the Bank’s role should be such as to take account of the African specificities (cross-border legitimate trade, weak AML/CTF or non-existent frameworks, weak institutional capacity, absence of specialized training for practitioners, and slowly emerging political will to combat ML/TF and corruption in general). 

Within the framework of its global governance and anti-corruption policy, the Bank has accordingly developed a strategy to help RMCs in combating ML/TF, to incorporating better ML/TF issues into its policy dialogue with RMCs, and to strengthen its internal controls to safeguard Bank resources and prevent their use for ML/TF purposes.

Main Issues

The Bank Group’s strategy involves strategic actions in four key areas:

• Adopt measures to tighten the Bank Group’s fiduciary safeguards, its internal procedures and policies, and its audit function to ensure that its own lending is used for its intended purposes and is not subjected to financial abuse, corruption or money laundering.
• Facilitate the implementation of international AML/CFT standards by RMCs and participate in regional and national AML/CFT capacity-building initiatives in collaboration with other international organizations and development agencies.
• Assist RMCs, directly and through FSRBs,  and support their efforts to develop AML/CFT laws and strategies in compliance with international standards and build an institutional capacity to implement these laws and strategies, including a capable financial investigation unit.
• Support and assist the establishment of effective and operational sub-regional FSRBs.