United States (U.S.) Justice Department has put some Nigerian banks
under the searchlight in the wake of growing terrorism in the country.
Specifically, the banks are being investigated to establish their
links, if any, with funding of the various terror cells across the continent,
particularly Boko Haram.
The development was sequel to BNP Paribas’ guilty plea and
agreement to pay nearly $9 billion for violating U.S. sanctions, which has now
triggered fresh enthusiasm on the U.S. Justice Department to also extend its
investigations to Africa, especially among big banks on the continent with
strong international links.
Two other major French banks- Credit Agricole and Societe
Generale, Germany’s Deutsche Bank AG, and Citigroup Inc’s Banamex unit in
Mexico are among those being investigated for possible money laundering or
sanctions violations, according to reliable industry sources.
The Justice Department and other U.S. authorities, including the
Manhattan District Attorney, are probing Credit Agricole and Societe Generale
for potentially violating U.S. economic sanctions imposed against Iran, Cuba
and Sudan, one of the sources said.
Specifically, in the case of Nigeria, there had been widespread
suspicion that a few banks in the country may have compromised in helping to
move funds for members of the Boko Haram sect.
There were fears recently that Nigeria may be blacklisted by
international anti-money laundering watchdogs based in the U.S., over its
inability to track the source of funds of the Boko Haram sect and curb
terrorism financing in general.
Signals from Financial Action Task Force (FATF), the global
standard setter for measures to combat money laundering, terrorist and
proliferation financing, indicated that despite the earlier warnings to Nigeria
on its non-compliance level, the country is yet to take any concrete step to
stem the rising spate of financial crimes including terrorism financing, money
laundering and corruption.
In its recent report, dated February 11, 2014, the FATF listed Nigeria
among the countries that have not made significant progress in addressing the
lacunas in their Anti-Money Laundering and Combating Terrorism Financing
(AML/CFT) regimes. The agency advised the international financial community on
the potential risks in the country.
Recent events, especially the activities of Boko Haram and
startling revelations from various probes by the National Assembly, are putting
Nigeria under global focus and scrutiny.
It will be recalled that on June 23, 2006, FATF decided to remove
Nigeria from its list of Non-Cooperative Countries and Territories (NCCTs).
Since July 2001, Nigeria has been on this shame list. The cost to the economy
is incalculable: inflow/outflow of transactions to Nigeria has around it a
cautionary flag to the rest of the world and numerous Nigerians operating
outside the country have had their financial dealings cancelled/ monitored.
Similarly, Inter-Governmental Action Group against Money
Laundering in West Africa (GIABA), in its 2011 yearly report, clearly showed
that the sources of money laundering, corruption, tax fraud, narcotics, trafficking
and capital market related crimes were identified as the major challenges
facing Nigeria.
The data from GIABA, an institution of the Economic Community of
West African States (ECOWAS) responsible for facilitating the adoption and
implementation of AML/CFT in West Africa, stated that the National Drug Law
Enforcement Agency (NDLEA) seized 195, 283, 917 kilogrammes of various types of
illicit drugs, mostly cannabis valued at over N140 million. The country also
generated 8,725, 213 Currency Transaction Reports (CTRs), 2,031 Suspicious
Transaction Reports (STRs) and 83 confirmed cases of money laundering in the
reviewed period.
Director-General, GIABA, Dr Abdullahi Shehu, expressed regret
that despite the support of GIABA, Nigeria still engages in predicate offences
that assist the growth of money laundering. “There are still gaps in the
AML/CFT regimes that require priority attention. While arrests and prosecutions
for money laundering offences have been increasing, they have not led to
commensurate increase in conviction and deterring punishment,” he said.
The GIABA boss listed counter-measures to include development of
a National AML/CFT strategy and action plan 2011-2015; passage of money
laundering prohibition Act (MLPA) 2011; AML/CFT compliance
examination/inspection; registration of DNFLs; gazetting of AML/CFT guidelines
for the Securities and Exchange Commission (SEC) and the National Insurance
Commission (NAICOM), and development of AML/CFT risk-based supervision
framework.
Meanwhile, the implications of FATF delisting would be
devastating for the already comatose Nigerian economy. It means Nigeria’s
business environment is risky for foreign investment, an indication that the
nation’s financial sector is no longer safe.
Furthermore, it will be difficult for Nigerians living overseas
to open accounts, especially in branches of multinational financial
institutions.
The financial offences watchdog recommends that financial
institutions should give special attention to business relations and
transactions with persons, including companies and financial institutions, from
the “non-cooperative countries and territories.”
Nigeria lost an estimated $25 billion in the four years that it
was on the delisted list, Guardian Newspaper reported.
The loss refers to cash quantification of what would have accrued
to the country’s treasury through direct foreign investments.
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