Former Director, EFCC Training and Research Institute, Abuja, Dr. Abdullahi Shehu, is the Director-General of The Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), an organisation set up by ECOWAS heads of states in Year 2,000 with headquarters in Dakar, Senegal. In this interview with AHURAKA ISAH, he speaks on the mandate of GIABA, and problems and prospects of fighting money laundering and terrorism-financing in the sub-region.
What pushed ECOWAS leaders to establish GIABA in the region?
Economic and financial crime distorts values and standards and creates injustice. In whatever form it is manifested, it is often motivated by human greed. The proceeds of crime provide the means by which new stages of organised crime can be financed; illicit assets are used to bribe officials and to impede effective criminal justice.
When organised crime applies it – through financial muscle, the proper functioning of the socio-economic and political systems can be impaired. Legitimate businesses are denied free and fair competition. The imprisonment of a senior United States Congressman in February 2006 for receiving bribes over many years in return for arranging lucrative contracts is one reminder of how economic and financial crime penetrates the highest levels of even the most advanced societies.
Fortunately, the lessons learned from such examples have led to greater consciousness and indeed the need for constant vigilance. It is universally recognised that economic and financial crimes, manifested in various dimensions and with deleterious effects, are evils which threaten the foundations of any civilised society and must be eliminated.
The conditions in which the battle against these menaces is to be waged are certainly different today than 30 years ago when there was no compact disc, let alone the internet. We can talk today without poetic licence of ‘living in a global village’. Voluminous transactions are carried out in the cyberspace with no physical boundaries.
The cyberspace, a medium which is oblivious of time and territorial sovereignty, brings instantaneous interconnections all over the world. This has certainly changed not only the way of doing business, but indeed has had far reaching influence on our lives.
All these have made crime truly transnational. Criminals take advantage of new technologies to cress-cross national boundaries with impunity. Transactional organised crime now can be described metaphorically as ‘spreading like wild fire’. It takes just a click of the mouse for millions of funds to be moved across jurisdictions.It is against the background of these changing circumstances that a meaningful fight against economic and financial crimes becomes imperative.
The inter-governmental action group, GIABA, derived from its French name of the organisation, was set up purposely to assist ECOWAS states to develop the necessary legal and institutional framework to prevent and control money laundering and to protect economies of member states, from being misused for the purpose of laundering proceeds of crime.
That means that GIABA was established basically to enforce the implementation of acceptable international standard against money laundering and terrorism financing. This also includes the United Nations conventions and Security Council resolutions and the Financial Action Task Force (FATF) recommendations.
What are the standards?
These standards are the 40 recommendations of FATF. Initially the 40 recommendations were on money laundering, and then nine subsequent recommendations were developed against the financing of terrorism.
In February this year, we adopted the revised version of various recommendations and instead of having them as 40 plus 9, we now have 40 recommendations of the FATF. And these recommendations pertain to their sub-areas which include the areas of prevention and control of money laundering in the area of financing of proliferation of weapons of mass destruction.
So, GIABA’s main mandate, therefore, is to ensure that this actions and standards are adopted by all the ECOWAS countries. And all the ECOWAS countries are expected to comply with these recommendations as much as possible.
Complaints will reflect in the necessary legal framework that member countries put in place. Such institutional frameworks include the establishment of financial intelligence unit. The establishment of various structures like inter-ministerial committees and other working groups were put in place in order to deal with this problem at the country level.
To what extend do you think these objectives have been achieved?
Well, I can modestly tell you that, so far (I have repeated this time without number) the six strategic areas that we focus on have recorded remarkable achievements.
First, in the area of promulgation of legislation, Six years ago, it was virtually Nigeria that had independent legislation, even though that legislation had its weakness.
But now, all member countries of ECOWAS have enacted legislation against money laundering. And we have reviewed all these legislations and made observations on the weakness in some places and suggested how they can be improved.
With regard to Nigeria in particular, we made some observations regarding ways and means which Nigerian anti-money laundering legislation can be improved. And I am delighted to note that Nigeria government has taken that seriously and certain proposal has been made to the parliament.
The first amendment after our mutual evaluation was made in June 2011 when the anti-money laundering law was amended and Terrorism Prevention Act was enacted. However, we still feel that that there are some areas that require improvement. We therefore engage with the Nigeria authorities.
This made the executive arm of the government present an amendment bill to the parliament which was passed by both Houses of Representatives and the Senate in October this year. We are expecting that the new revised law will be assented to by President Goodluck Jonathan as soon as it is presented to him.
The second area of our intervention is in the area of conducting mutual evaluation based on the FATF? 40 recommendations as well as the other acceptable international standards, like the United Nation’s Convention and Security Council resolutions. In this area, I can tell you that we started this exercise in about 3-4 years ago, and that by last month, we finished with all the 15 member countries of ECOWAS.
All these countries have been evaluated in accordance with 40+9 recommendations on the Financial Action Task Force (FATF). Now this report has been published and it is on our website – anyone can visit and see the summary of ratings, how anti-money laundering frameworks in various countries in the region is working.
If we found that the country has a full complement of the requirements for any recommendation, then that country will be rated fully compliant. If the country has significant criteria but with regard to what is required on that recommendation, the country will be rated largely compliant. If, however, a country has put certain things in place, but largely there are certain things that have not been done or perhaps the mechanism is not effective, the country will be rated partially compliant with regard to that recommendation.
And there are instances where we rate countries as non-compliant. And when we rate a country as non-compliant, it does not mean the country has not put anything in place at all. It only means that what the country has put in place has not fulfilled enough, or it has not been implemented and, therefore, you cannot assess the effectiveness of that system.
So, if you look at most of the countries in that first evaluation, they were rated mostly as non-compliant because they were just beginning to put necessary things in place. By next year’s round of our evaluation, even though it will be on the higher standard because we raised the bar also with regard to what we expect them to do, I believe that with the awareness we have generated in the region, we are going to have a better rating of the systems of our members.
The third area of our intervention is in the area of conducting typologies of money laundering. We have undertaken typology exercises on cash transactions. In other words, to determine methods and mechanisms that people do while using cash in order to conceal origin of proceeds of crime.
We have conducted typologies of money laundering through the real estate. We conducted typologies of money laundering through proceeds of drug trafficking. And for the past one year and half, we could not publish a complete report because we are working with the FATF, our global network body, in order to produce a world global typology report on methods of terrorism funding, and the workshop was held in Darka, Senegal two weeks ago.
The report will now be produced together without partners all over the world. We are not just trying to see the pattern of funding of terrorism in West Africa, but trying to look at it all over the world so that practitioners can have a better perspective and a world view of the methods, patterns and trend of funding of terrorism. In that area also, quite a significant feat has been achieved.
The fourth area of intervention is by making supporting members to establish institutional frameworks. Five years ago, we have only two financial intelligence units in this region – which are those of Nigeria and Senegal.
Today, we have 13 financial intelligence units that are operating at various stages of development. The only two countries that have not established financial intelligence units are Guinea and Liberia. While Guinea is due to their peculiar circumstances of instability that characterise its political affairs in the last three years,? that of Liberia is due to certain reforms they are carrying out in order to enact the law. The processes are quite long but, so far, these are the only two that have not established financial intelligence unit.
Now, we not only support the countries to establish this unit and leave them alone, we also follow up with technical assistance in order to strengthen capacity of the institutions. And that is why we launched a comprehensive project to provide software analysis with these financial intelligence units, except Nigeria and Senegal which already had, but we provided software to the other countries.
So far, we have installed this software in four countries, The Gambia, Cape Verde, Burkina-Faso and Ghana,? and they are working very well. We have carried out an audit of the process to see what lesson we will learn in order to proceed with the project, thereby correcting the project errors if any, based on our past experiences.
Apart from that, we have a comprehensive training programme for financial analysts in the financial intelligence unit. This is because the usefulness of information provided to the unit by the banks is when there is proper and accurate analysis that will form the basis of action of law enforcement agents. In other words, that will be produced as intelligence for the law enforcement agencies to take action. So we train the analysts in order to do proper work in their day-to-day operations.
Our fifth area of intervention is in the area of engagement with the civil societies, including the media. So far, without being immodest, for each country you go now, even though? a majority may not know what money laundering is all about, but relatively, over the past few years, we have recorded significant progress in terms of raising awareness either through conferences, through advocacy visits or through engagement with the civil societies. And we are trying to sustain the momentum.
The sixth area of our intervention concerns promoting international and regional cooperation. Here again, observers have established firmly on the ground as one of the very strong ECOWAS specialized institutions that are addressing issues, an issue of concern to our member countries.Within the framework of ECOWAS, we deepen cooperation and collaboration amongst our members with a view to promoting the goals of ECOWAS. And we do that also with our international collaborators,? like FATF, which is the global body that we relate with in this area of fight against money laundering and terrorism financing.
So, in a nutshell, this is what I can say we have done in the past five to six years.
But that is not to say that we have accomplished everything, even though we have done quite a lot, there is still more to be done. What we require mostly is that the member countries must do their part, because whatever we do at the regional level, without practical results at the country level, it will not have its impact felt by the people. This is why we are engaging each country, based on its priority and circumstances, to provide direct assistance in order to address their deficiencies.
What has GIABA identified as direct links between terrorism financing and corruption proceeds?
We do not have empirical studies on that, but what we have done was that we have undertaken there separate studies.
First, we did a study on the proceeds of corruption and we have published the report. What that studies revealed is that corruption promotes and protects money laundering, because it is a major predicate offence for money laundering.
And, therefore, in dealing with money laundering, you must address the issue of corruption. It is very fundamental, particularly corruption involving ‘‘politically exposed persons’ (PEPs).
In most cases, in developing countries you find that large scale corruption involves politically exposed persons. This report is on our website and you can download it to see details of it.
On the financing of terrorism, we addressed in the course of the studies along other integral in the international community’s – because we are not alone, but we are yet to get empirical data to enable us to say this is the pattern. But, clearly, we have seen some emerging trend where some people’s accounts were used. Some did not even know that they were receiving money that would be used for terrorist activities.
For instance, somebody will approach another person and say I want to use your account to receive money from a relation or friend, and subsequently the said money was used to finance terrorism. Sometimes, you find that charity organisations are involved in sponsoring terrorist acts. But with this work in progress, we have not come out with empirical data to suggest that any charity organisation has been used.
But despite several anti-graft agencies in countries like Nigeria, corruption has become more overwhelming. Since this is more of attitude of greed than absence of institutional framework, is there anything GIABA is doing to stop these characters from getting to positions of political leadership in their countries?
In the first place, Nigeria has a very sound legislation against corruption. The laws we have in Nigeria are even stronger than others in many countries in the world, and they can therefore be useful to deal with the problems of corruption.
In my view, what we need is really the re-enforcement of process of carrying out those legislations. This is because if you have legislation and you do not apply it appropriately, then you cannot have the requisite impact accordingly. And applying appropriately means a chain of requirements or activities.
First, you have to look at how to strengthen capacity of your investigators to be able to investigate cases diligently. Then you look at also capacity of your prosecutors, their knowledge and ability to successfully present good argument before a judge in court and to be very logical in their presentations to secure conviction.
Then we look at it also at the end of criminal justices system, which is the judiciary. The judges also need to know certain things about this type of offences. Dealing with corruption is a very herculean task but I can tell you that some societies have dealt with corruption. All that is required is a strong political will.?
Where there is a strong political will, resources will flow, there will be credible deterrence, there will be no scapegoats and there will be no untouchable – anybody that has committed the offence will be brought to justice. If all these are applied strictly, it will be different ball game in Nigeria.
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