CORRUPTION-NIGERIA: Money Launderers Will Be Hung Out to Dry

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Oct 31 2003 (IPS) - The proficiency of Nigeria’s drug traffickers and fraudsters has earned the country an unhappy reputation – that of being a money-laundering haven.

Since coming to power three years ago, the Obasanjo administration has made efforts to tackle this dismal situation, however. A new law, the Money Laundering Prohibition Act, was put on the books in May. This week, the Nigeria Drug Law Enforcement Agency (NDLEA) was hard at work publicising the merits of the bill, during a seminar in Lagos.

The day-long workshop was opened on Tuesday by Vice-President Atiku Abubakar. “For us in Nigeria, money laundering is particularly heinous because it has contributed to giving us a less than impeccable image,” he said. Abubakar added that “The task of cleansing this image, which we began since assuming office in 1999, involved tackling the monster of narcotics trafficking and its attendant tentacles of advance fee fraud, money laundering and human trafficking.”

According to the Vice President, Nigeria’s battle against the drug trade has yielded good results in the past three years. But, he said “(The country) must intensify the war against money laundering.”

This practice involves the illegal transfer of money from foreign countries through Nigerian banks, to disguise its origins. The funds are usually the proceeds of drug and financial crimes, including the notorious advance fee fraud schemes – otherwise known as 419 schemes.

Statistics on the extent of money laundering are hard to come by. According to John Ndukuba, a lawyer who helped prosecute a 419 scheme kingpin, “It runs into billions of dollars, but is hardly reported by the victims because of (the) fear of reprisals.” He added that victims who did go to the police were likely to understate the extent of their losses.

Ndukuba’s comments were echoed by Jonah Achema, NDLEA Assistant Director of Public Affairs.”What makes it difficult to quantify money laundering in terms of cash, is that it goes beyond (money). It extends to assets. It is a multifaceted crime which includes proceeds from prostitution, drugs, tax evasion, corruption and embezzlement.”

Nigeria’s latest efforts to root out money laundering come after it narrowly averted sanctions by the Geneva-based Financial Action Task Force (FATF), a United Nations agency that monitors the crime. Last year, three additional bills to combat financial crime were hastily signed into law by President Olusegun Obasanjo, just days before a deadline issued by the FATF.

The agency had threatened to activate sanctions against Nigeria by Dec. 15 if the country failed to bring its legislation on money laundering up to international standards. The measure would have made it difficult for Nigerian banks, and the government, to get credit with institutions in other countries.

Like the previous law to prohibit money laundering, enacted in 1995, the 2003 Money Laundering Prohibition Act requires banks to report all financial transactions that exceed 10,000 dollars. But, the new law packs more punch when it comes to penalising institutions that do not comply. Banks that fail to report these transactions could be prosecuted, and their licences revoked. They might also be asked to repay money that has been fraudulently obtained, and laundered by having it pass through their books.

In addition, the 2003 act allows the Economic and Financial Crimes Commission – established in April – to seize the property of people thought to be involved in advance fee fraud, and to go through the records of government officials who are in the habit of awarding inflated contracts. The commission also has the muscle to force these officials to repay misappropriated funds.

This comes as money-launderers, aware of increased scrutiny on financial institutions, have started putting their ill-gotten gains into insurance companies, estate agencies, accounting firms and the stock market. There is currently no ceiling on the amount of foreign currency a Nigerian can bring into the country.

To date, the Economic and Financial Crimes Commission has arrested 32 people implicated in advance fee fraud, and seized their properties. Commission Chairperson Nuhu Ribadu said 27 of them had been imprisoned, and were being tried.

Ribadu added that the commission had also brought eleven victims of the fraud schemes to Nigeria to testify in 419 cases. The individuals came from the United Kingdom, Hong Kong and Germany, respectively.

“Without their cooperation, we cannot prosecute and convict 419 people,” he said. “Though the victims could be said to be greedy, that is not against our law…We have to threat the victims nicely,” he noted.

Mathew Agbogun, a senior official at the Nigerian Export Promotions Council, praises the government’s efforts to eliminate financial crime. “People will learn to do legitimate business. It has (given) regulatory authorities…more powers, which enable them to react swiftly,” he says.

According to Jonah Achema, it is important that new laws on financial crimes be coupled with programmes to make the public aware of the legislation. “In the (course) of six months, we have held sensitisation seminars with stakeholders, including operators of bureaux de change, bankers and insurance companies.”

“We will also gather courier service operators to sensitise them (to) the nature and scope of money laundering, and what it is capable of doing to the society,” he added.