Assessing the extent of compliance to Anti Money Laundering and Countering Terrorist Financing (AML/TCF) standards in Ethiopia‘s Commercial Banks: the case of Dashen Bank
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Date
2018-06-01
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Addis Ababa University
Abstract
The main objective of this study is to assess the extent of compliance to Anti Money Laundering and countering terrorist financing (AML/TCF) standards that are being practiced in Dashen Bank .It assess the implementation of AML/TCF compliance program and the extent of ML/TF preventive measures (standards) practiced at Dashen Bank. Challenges that the bank faces while practicing AML/CTF is also addressed. The study adopted a descriptive approach and quantitative data were employed to address the objective. Both primary and secondary data was used. The quantitative data was collected through a structured questionnaire and document review. The Population for the study was all staffs of Risk Management and compliance Department of Dashen Bank, expecting that the Risk Management and Compliance Department employees would have adequate knowledge on ML/TF and subsequently have knowledge on the prevention measures adopted in the Bank. Since the total number of the staffs is 34, census method was employed. The collected data was computed using SPSS version 20. Percentage, mean, standard deviation and relevant statistical methods were employed. Moreover, tables and elaborations were used to present the findings. Based on 31 respondents this study found the overall establishment and implementation of AML/CTF compliance program of Dashen Bank is at moderate level. However the bank is weak in complying with the standards in allocation of adequate resource to the office of compliance and designating a Compliance Officer to coordinate AML/CFT training of employee. The implementation of ML/TF preventive measures of the bank is also at moderate level .The research revealed the Bank is weak in implementing automatic electronic customer/transaction screening, and hence weak in monitoring customers’/transaction and detecting suspicious transactions, Unusual and complex transactions as well as high risk regions throughout the bank’s business units. Classification of customers according to their AML/CTF risk level is also the weakly complied standard. Further, the finding confirmed the less awareness of the society in AML/CTF, predominantly informal and cashed- economies of society and not having list of Political exposed person (PEP’s) are among the major challenges the Bank faces while practice AML/CTF standards.
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Money Laundering, Terrorist Financing, ML/TF Preventive Measures, compliance