The Bank of Ghana (BoG) threatened to sanction banks which deliberately misclassify foreign currency denominated accounts.
The Governor of BoG, Dr Henry Kofi Wampah who issued the threat explained that the misclassification of the accounts namely Foreign Exchange Account (FEA) and Foreign Currency Account (FCA), had resulted in an increasing phenomenon of transfers of foreign currencies without proper documentation, with implications for money laundering activities.
The development which appears to be gaining momentum in the industry appears to be of serious worry to the central bank, pushing it to recently warn bankers to get their acts together to avoid the risk of sanctions when found culpable. ‘Such misclassifications have resulted in an increasing phenomenon of transfers of foreign currencies without proper documentation, with implications for money laundering activities. The Bank will intensify efforts in monitoring these activities.
Therefore, banks are advised to take a second look at these notices and discontinue the misclassifications to avoid the risk of sanctions when found culpable’. Dr. Wampah said.
According to the Governor for the purposes of clarity, it has issued two 2 operational guidelines defining these two accounts. ‘For the purposes of clarity, the Bank of Ghana has issued two (2) Operational Guidelines (Notice No. BG/GOV/SEC/2007/3 and 4) defining these two accounts’. Money laundering, off-shore tax evasion among others are often associated with foreign accounts, despite many legitimate reasons for having one.