President John Mahama is consistent in his response whenever a Ghanaian shows discontent with the ‘slow’ pace of prosecution of persons indicted in corruption – we cannot eat our cake and have it. The case is in court. We live in a democracy with a justice system and must have respect for due process despite the pace.
In January, President Mahama went as far as saying that if he was a military ruler, he would have simply had Alfred Woyome locked up for fraudulently making a GH¢51.2 million judgement debt off the state – that amount is a little over $13 million by today’s exchange rate.
Whether the president is truly committed to fighting corruption or not, come next week May 12, 2016, he would have yet another opportunity to show his commitment to the fight against corruption at an anti-corruption summit in London, hosted by the British Prime Minister.
The summit had been planned already but is timelier now, given the recent leak of the Panama Papers showing how many politicians and their close kin, had hidden wealth in offshore accounts.
Given that the leaks brought a significant renewal in calls from world leaders and organizations, for countries to tighten the screws against corruption and money laundering by establishing publicly available beneficial ownership registers, the anti-corruption summit next week will no doubt give a lot of attention to this issue.
In many countries around the world, the names and identities of the beneficial owners of companies is not a legal requirement during registration and incorporation, offering business owners a free veil, with serious implications.
A terrorist, a drug trafficker or any other type of criminal can own a registered business, profit from it anonymously and even compete for government contracts.
Politicians can award state contracts to companies that they secretly own, while the citizenry remain oblivious to the conflict of interest and corruption.
The lack of this information also creates hurdles and dead ends for investigators pursuing money laundering and other illicit financial flows; sometimes the money simply cannot be connected with the (human) being.
The world is awakening to this problem, and faster now after the Panama Papers. Britain which will be hosting the anti-corruption summit has taken initiative. In a deal announced last month at the IMF Spring Meetings in Washington, the United Kingdom will automatically exchange information on the ultimate owners of companies, with France, Italy, Germany and Spain.
Many countries around the world are also in the process of moving to establish functional registers of the ultimate owners of businesses or have made commitments to do so.
The case of Ghana
Will President Mahama make commitments at the summit to remove the veil on business owners in Ghana?
Unfortunately Ghana is part of the countries whose laws do not mandate their business registry to require information on the ultimate owners of businesses.
At the Registrar General’s Department, one may register a business without having to disclose who the ultimate owners are. Companies can also be registered at the department under the ownership of a parent company that is registered in an offshore secrecy jurisdiction.
What this means is that the earlier mentioned vulnerabilities associated with not knowing the ultimate owners of companies, sadly apply to Ghana and as it is, the Registrar General’s Department is one institution with quite some weakness.
Sadder still, Ghanaian politicians do not seem to be very interested in this particular anti-corruption and anti-money laundering legislation.
The Companies (Amendment) Bill, currently in parliament to amend the law on companies, does not include provisions that will legally mandate the Registrar General’s Department to require information on the ultimate owners of businesses during registration.
Ghana meanwhile, is obliged to disclose beneficial ownership information as a member of the Open Government Partnership (OGP) and by the Financial Action Task Force (FATF) – an intergovernmental body combating money laundering and terrorist financing. The country is also required as an implementing country of the Extractive Industries Transparency Initiative (EITI), to establish a beneficial ownership register for the extractive industries by 2020 – the result of a new directive from the 7th EITI Global Conference held in February 2016 in Lima, Peru.
The story is the same in the oil and gas industry, where concerns about the lack of beneficial ownership information by civil society have not yielded much.
The Petroleum Exploration and Production Bill, also currently before parliament, does not include provisions to lift the veil off beneficial owners in oil and gas companies and to establish the beneficial owners, leaving this duty to the Ghana Extractive Industries Transparency Initiative (GHEITI).
Those provisions were taken out of the bill by parliament despite advocacy from civil society organisations such as the Africa Centre for Energy Policy (ACEP) and the Natural Resource Governance Institute (NRGI).
The Danger Ahead
In February 2012, Ghana was blacklisted by the Financial Action Task Force for not being committed to an action plan, after undergoing a review by the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) – an institution under the Economic Community of West African States (ECOWAS) and an associate member of the FATF which is spearheading the adoption of legislation and policy against money laundering and terrorist financing in the sub-region.
The country was one of 17 countries designated high-risk and non-cooperative jurisdictions, by the FATF.
In October 2012 however, Ghana was cleared for taking within the period, some measures against money laundering and terrorist financing.
According to information from highly-placed persons, the blacklist manifested itself in many ways such as strict visa restrictions and Ghanaians being inexplicably denied visas to travel outside Ghana, and Ghanaians outside having difficulty using credit cards.
Ghana is due for another review in September 2016 but the country appears to be dragging its feet by not enacting legislation against anonymity in the ownership of businesses.
A recent report (November 2015) on Ghana by GIABA shows that GIABA is waiting on Ghana’s amendment of the Companies Bill as a measure to plug the hole in Ghana’s laws relating to the provision of beneficial ownership information to the Registrar General’s Department.
It is those same anti-corruption and anti-money laundering provisions to reduce financial secrecy in Ghana that parliament appears to be avoiding even when the opportunity presents itself.
September 2016 is not far away. Will President John Mahama at the anti-corruption summit in London next week make commitments before world leaders towards beneficial ownership? And will he return to follow the commitments with action?
One needs no telling whether Ghanaians living in the country would like to see an increase in visa restrictions and inexplicable visa rejections or whether those living abroad wouldn’t mind their credit cards getting dysfunctional all of a sudden.
By Emmanuel Odonkor
Email: [email protected]
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