Banker's Academy AML Training by Country

Anti Money Laundering (AML) By Country: Sierra Leone

Anti Money Laundering (AML) in Sierra Leone

Money laundering is an active problem in Sierra Leone. Government of Sierra Leone officials hypothesize that money laundering occurs mainly in the diamond, real estate and automobile sectors. Currently, Sierra Leone presents an atmosphere conducive to such money laundering, with loose oversight of financial institutions, weak regulations, pervasive corruption and a large, informal money-exchange and remittance system.

In July 2005, the President of Sierra Leone took steps to combat money laundering in the country, passing the Anti-Money Laundering Act (AMLA). The AMLA incorporates set international standards, requiring Know Your Customer (KYC) procedures and identification, setting safe harbor provisions, mandating suspicious activity reporting and five-year record keeping.

The AMLA applies to all of Sierra Leone’s financial institutions, including depository and credit institutions (such as banks), money transmission and remittance service businesses, insurance brokers, investment banks, securities and stock brokerage houses and currency exchange houses. In addition to passing the AMLA, the Bank of Sierra Leone, Sierra Leone’s Central Bank, held a conference in 2008 with all local banks to establish guidelines for preventing and combating money laundering.

Sierra Leone has a financial intelligence unit (FIU), which is still developing. The FIU’s designed role is to receive and analyze financial information and intelligence, including Suspicious Transaction Reports (STRs), and deliver information concerning possible cases of money laundering to the proper authorities. However, a lack of training and resources hinder the FIU’s ability to properly fulfill its functions.

The Government of Sierra Leone has recently been reviewing the AMLA and plans on passing an amended version of the Law sometime in 2009. The revised law would attempt to make provisions to aid the FIU’s attempts to complete its assigned functions. This would include assigning an appropriate law enforcement agency to money laundering and terrorist financing investigations. In addition, the law would increase the penalties for money laundering, possibly creating punishments for financial institutions who fail to meet reporting requirements. The World Bank and the Inter Governmental Action group against Money Laundering in West Africa (GIABA) have both provided input during the drafting of the new law, to ensure that it will meet international standards and guidelines.

The Economy of Sierra Leone

Sierra Leone has a developing economy, currently experiencing a revival due to a recent increase in political stability and aid received from abroad. Sierra Leone possesses substantial mineral, agricultural and fishery resources, which form the backbone of the country’s economy.

Agriculture and mining, including alluvial diamond, bauxite and rutile mining, account for the majority of hard currency earnings in Sierra Leone. In addition, the economy is supplemented by the manufacturing of raw materials and domestic market items.

Banking in Sierra Leone

The Bank of Sierra Leone is Sierra Leone’s Central Bank and was officially opened on August 4, 1964, three years after Sierra Leone attained independence.

The main function of Sierra Leone’s Central Bank is to foster a sound economic and financial environment, through the implementation of monetary and supervisory policies.

The monetary functions of the Bank of Sierra Leone include: promoting credit and exchange conditions conducive to economic growth, issuing and distributing the country’s currency, formulating and implementing monetary policies, acting as the Government’s financial and economic adviser, managing domestic and foreign debt, acting as a banker to the Government and commercial banks, and supervising and regulating the activities of commercial banks and other financial institutions.

Sierra Leone's Currency

The currency of Sierra Leone is the Leone. The leone replaced the British West African pound in 1964 at a rate of 1 pound to 2 leones. One leone is composed of 100 cents, and “leone” can be abbreviated as “Le” when placed before an amount.

The leone comes in both banknotes and coins. Coins have been issued in denominations of ½, 1, 5, 10, 20 and 50 cents, and 1, 10, 50, 100 and 500 leones. Currently, only three of these coins are in circulation, those with denominations of 10, 50, and 100 leones.

Banknotes have been issued in amounts of 50 cents, and 1, 2, 5, 10, 20, 50, 100, 500, 1,000, 2,000, 5,000, and 10,000 leones. The banknotes currently in circulation have denominations of 50, 100, 500, 1,000, 2,000 and 5,000 leones.