Money laundering has become a significant threat to the world’s political and economic order. World leaders are collaborating and cooperating in fighting money laundering. However, criminals are maliciously clever and, in some cases, ahead of law enforcement agencies. Every human being has to contribute to the fight against money laundering.
Required:
i) Assess why money laundering poses a big threat to the world’s political and economic order. (5 marks)
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• Money laundering puts large sums of illegal money into the hands of criminals who use such funds on financial and political crises and upheavals.
• Money launderers would often set up Ponzi schemes which entice people to withdraw their savings from the traditional deposit takers and fund managers into their scheme. This tends to undermine the official financial and banking system of the countries in which they operate.
• When they succeed, they introduce large amounts of money into the economy without an immediate corresponding rise in goods and services, resulting in hyperinflation. As a result, weak third world countries may not be able to absorb the shocks and their economies may crumble.
• Money laundering has been found to be a significant source of funds to international terrorist organisations. They use the resources to engage in terrorist activities that lead to wanton destruction of human lives and properties. In countries where money launderers and terrorists gain a strong foothold, they become failed states.
• Money launderers could use their ill-gotten money to finance coups de tat in countries facing hardships or poverty.
(5 point @ 1 mark each = 5 marks)
ii) Discuss FIVE (5) ways in which Ghana is contributing towards fighting money laundering globally. (5 marks)
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• Ghana has joined other well-meaning countries in the fight against money laundering and terrorism financing.
• Ghana has subscribed to the world anti-money laundering and terrorism financing organisation and is implementing the 48 FAFT recommendations.
• Ghana is also a member of GIABA the West African organisation fighting against money laundering and terrorism financing.
• Ghana has entered into a treaty with other countries for collaboration in the arrest, prosecution and confiscation of assets illegally acquired by money launderers. The proceeds from sale are shared among collaborating countries.
• Ghana has passed the anti-money laundering law and anti-money laundering regulation, all in the fight against money laundering.
• Many organisations are in the forefront in the fight against money laundering in Ghana, including EOCO, the Financial Intelligence Centre, and other Security Agencies such as Ghana Immigration Service and Interpol.
(Any 5 points @ 1 mark each = 5 marks)