Challenges and Practices of Anti-Money Laundering and Combating of Terrorism Financing-The Case of The Ethiopian Commercial Banks
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Date
2022-12-01
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A.A.U.
Abstract
This study aims to assess the Anti-Money Laundering (AML) and Combating of Terrorist Financing (CFT) practice and challenges of commercial banks in Ethiopia in accordance with international standards and applicable laws. The study adopted a Descriptive research design whereby the researcher employed questionnaires and interviews for data collection and also a quantitative and qualitative research approach was used to collect and analyze primary data. Primary data was collected through a survey instrument adapted from different business researches; a stratified and purposive sampling technique was chosen to get the required sample size. About six banks on the basis of year of establishment and assumed to have best experience in handling money laundering were targeted to study. Data gathered were analyzed based on 54 responses and two interviewees. The survey data were analyzed through descriptive statistics analysis. The result indicates that commercial banks in Ethiopia have been discharging their responsibilities by implementing and practicing Anti Money Laundry and combating of terrorism financing. However, Money Laundry and terrorism financing preventive measures revealed that commercial banks do not have automatic electronic customer/transaction screening and the finding confirmed that absence of national ID and lack of list of Political Exposed Persons, lack of technology to enhance Anti Money Laundry and combating of terrorism financing activities and lower awareness in the country are serious challenges for banks. Therefore EFIC and NBE and other responsible organs of the country have to focus their efforts on the most fundamental tasks and main challenges, and need to give utmost priorities about Anti Money Laundry and combating of terrorism financing. Finally, as this study focuses on commercial banks, further research is needed on the other financial and nonfinancial sectors which are vulnerable to money laundering and terrorist financing.
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Keywords
Money Laundering, Terrorist Financing, Banks, Financial Intelligence Center.