ENHANCING EFFICIENT PAYMENTS AND REMITTANCES SYSTEMS THROUGH EFFECTIVE AML/CFT COMPLIANCE

Financial remittances facilitate human capital formation by improving access to education and health; an increase in investments and reduction in poverty especially for recipient households. Also, remittances serve as a critical source of foreign exchange for the national accounts and they promote macroeconomic stability. It has been estimated that remittances are now more than double the size of net official flows, and are second to Foreign Direct Investment (FDI) as source of external finance for developing countries. To derive maximum benefits and forestall the misuse of remittance channels for the purposes of concealing the proceeds of crime, it is crucial to adopt and enforce effective anti-money laundering and counter financing of terrorism measures of acceptable international standards. This paper examines the importance of payments and foreign remittances systems; and drawing lessons from the mutual evaluation of countries in West Africa, concludes that effective and efficient compliance can only be achieved with a strong commitment of the industry to enforce self regulation. Other measures to enhance the efficiency of the payments and remittances systems are also recommended.