For Failure To Comply With Liberia’s Anti-Money Laundering And Countering The Financing Of Terrorism (AML/CFT)
The Financial Intelligence Agency of Liberia (FIA) has imposed a fine of Twenty-Five Million Liberian dollars (L$25,000,000) against the Lonestar Cell MTN Mobile Money, Inc. (LCMMMI).
The decision to fine the mobile network subsidiary company of the LoneStar Cell MTN GSM Inc was necessitated by its failure to comply with Liberia’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance policies, procedures, control, and obligations, as provided for in Liberia’s AML/CFT Act of 2021.
The Risk-based inspections conducted by the FIA from September 2-16, 2024, have found that LCMMMI has failed to establish an independent Board separate from its parent company – Lonestar Cell MTN GSM, Inc., said a press release from FIA.
This deficiency in the LCMMMI’s AML/CFT compliance system is in violation of section 6, paragraph 5 of the Mobile Money Regulation No. CBL/RSD/003/2014. This violation was also cited in the Central Bank of Liberia’s (CBL) December 2-10, 2018, Joint Digital Financial Services and AML/CFT Risk-based Examination Report on the LCMMMI.
FIA finds this inadequacy of not implementing appropriate corporate governance measures in the LCMMMI’s AML/CFT compliance system as risky and troubling. The Agency is extremely baffled by the Mobile Money operator’s failure to address this major violation of not establishing its own Board separate from its parent company, Lonestar Cell MTN GSM Inc., since December 2018 when it was first identified by the CBL up to present.
Additionally, the FIA identified a few infractions, which include the following:
- Failure to exercise due diligence and carry out suitability assessment of all Agents, resulting in the abused of LCMMMI system by Smart AI to perpetrate a Ponzi Scheme, which defrauded thousands of Liberians in 2023.
- Failure to obtain specific authorization from the CBL to grant unlimited transaction levels for Full Agents/Merchants Transactions. This violates Section 15, paragraph 4 of the Mobile Money Regulations.
- Failure to monitor transactions, especially at Full Agent Level/Merchants with unlimited transaction threshold resulting in the failure to file Currency Transaction Reports. This violates section15.3.21 of the AML/CFT Act of 2021.
- LCMMMI failure to take appropriate measures to identify, assess and monitor its Money Laundering Risk, including those of pre-existing Customers, Products, Services, Geographical Locations, and Delivery Channels, which violations of section 15.3.1, section 15.3.10 of the AML/CFT Act of 2021, Section 2.9 AML/CFT Regulations for Financial Institutions in Liberia, Regulations.
The Agency has mandated LCMMMI to deposit the L$25,000,000 in the Liberian Government escrow account.
Meanwhile, the FIA shall take additional appropriate supervisory actions, where necessary, to ensure LCMMMI Complies with the Full range of AML/CFT Obligations.