The Financial Intelligence Agency of Liberia (FIA) has imposed a 25,000,000 Liberian Dollar fine on Lonestar Cell MTN Mobile Money, Inc. (LCMMMI). The decision follows the company’s alleged failure to comply with Liberia’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) 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, found that LCMMMI has failed to establish an independent Board separate from its parent company, Lonestar Cell MTN GSM, Inc.
According to the FIA, such a deficiency in the LCMMMI’s AML/CFT compliance system violates section 6, paragraph 5 of the Mobile Money Regulation No. CBL/RSD/003/2014.
FIA noted that his 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 said it finds such inadequacy of not implementing appropriate corporate governance measures in the LCMMMI’s AML/CFT compliance system risky and troubling.
Additionally, the Agency stressed that it 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.
Moreover, the FIA identified a few infractions, which include the Failure to exercise due diligence and carry out suitability assessment of all Agents, resulting in the abuse of LCMMMI system by Smart AI to perpetrate a Ponzi Scheme, which defrauded thousands of Liberians in 2023. Others are: failure to obtain specific authorization from the CBL to grant unlimited transaction levels for Full Agents/Merchants Transactions.
Citing more legal provisions, FIA pointed out that it violates Section 15, paragraph 4 of the Mobile Money Regulations. “Failure to monitor transactions, especially at Full Agent Level/Merchants with unlimited transaction threshold, failing to file Currency Transaction Reports. This violates section 15.3.21 of the AML/CFT Act of 2021”, the Agency added.
LCMMMI failed 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 violates 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.
In a drive to set a precedent, 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.
