At a recent workshop, she said,
“Banks are used knowingly and unknowingly to further the act of money
laundering and, in most cases, to retain the proceeds of such crime.
Over 80 per cent of the proceeds of money laundering are associated with
banks one way or the other all over the world.”
Money laundering, the world over,
is considered a very serious crime that should necessarily be tackled
within a strong financial regulatory framework with very stiff penalties
for offenders. It is the process through which large amounts of money
obtained illegally are given the appearance of legitimacy. Such funds
are usually proceeds of criminal activities such as drug trafficking,
terrorism, kidnapping, illegal trade in mineral resources, stolen money
from corrupt politicians and civil servants, among other serious crimes.
They are passed through banks or businesses or individuals until they
can no longer be traced to their original illegal sources.
The danger in allowing criminals
to get away with laundered money is that it gives them successful cover
over the illegitimately acquired wealth which could be used against the
interest of the larger society. For instance, a drug baron who has made a
lot of money could launder the money through politics by using it to
contest and win elections. He could also use it to install his hirelings
in power, while he remains in the background as “the power behind the
throne.” In the case of Nigeria, laundered money, in addition, could
easily provide the source of funding for the Islamist Boko Haram
terrorists that are currently visiting mayhem on the country.
Discovering and blocking the
source of money for Boko Haram will go a long way in cutting off the
lifeblood of the demented criminals who have killed close to 13,000
people since they started venting their sanguinary fury on the country
five years ago. When Osama bin Laden’s al-Qaeda was becoming very strong
and influential, the United States of America took the vital step of
strengthening its money laundering laws in collaboration with other
countries to ensure that easy money was not readily available for use by
terrorists.
What is to be done? While Alade
has done well to raise the alarm about money laundering, it is however
wrong for her to sound so helpless as if the problem is insurmountable.
The CBN has the power of supervision over the banks; assisted by
Anti-Money Laundering Act. Under the Act, through automation, banks
alert the Economic and Financial Crimes Commission on transactions that
fall within “suspicious threshold.” The Act, amended in 2011, forbids
individual transactions that exceeds N5 million, and N10 million for
corporate bodies. Unfortunately, nothing has been done to bring errant
banks to book.
The former CBN Governor, Lamido
Sanusi, once said, “We have an Exchange Control Act today that says you
can take out any amount of dollars from Nigeria as long as you declare
at the ports. People walk out of airports with $3 million after
declaring it. That is the law; it allows them as long as they declare it
and we cannot stop them.” It should not be so.
What Nigerians and indeed the
international community are interested in is how many banks have been
prosecuted or sanctioned for their involvement in financial crimes.
Within the context of the extant law, the CBN should be thinking of how
to collaborate with agencies such as the Nigerian Customs Service, the
Financial Intelligence Unit and other security agencies to fight money
laundering.
There is no doubt that money
laundering is a worldwide phenomenon. The United Nations Office on Drugs
and Crime puts the amount of money laundered each year at between two
and five per cent of global Gross Domestic Product. It amounts to
between $800 billion and $2 trillion. Out of these amounts, an estimated
$300 billion is reportedly laundered annually in the United States. In
the US, however, as with other Western countries, people are caught and
made to face the full weight of the law, just to serve as deterrent to
others.
The CBN must strengthen its
oversight functions. Financial institutions that fail to meet their
anti-laundering obligations must be exposed and penalised. We have had
enough of endless platitudes on money laundering. The Federal Government
should review its anti-money laundering laws and seek to make them
work.
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