"The Invisible Threat: Money laundering in Eastern and Southern Africa" (original) (raw)
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Tackling money laundering in East and Southern Africa : an overview of capacity : volume 2
2004
The vision of the Institute for Security Studies is one of a stable and peaceful Africa characterised by human rights, the rule of law, democracy and collaborative security. As an applied policy research institute with a mission to conceptualise, inform and enhance the security debate in Africa, the Institute supports this vision statement by undertaking independent applied research and analysis; facilitating and supporting policy formulation; raising the awareness of decision makers and the public; monitoring trends and policy implementation; collecting, interpreting and disseminating information; networking on national, regional and international levels; and capacity-building.
2007
International concern at the growing incidence of organised crime, corruption and terrorism and the debilitating effects these problems have on peace, security and development signals a need for concerted action. The United Nations Office on Drugs and Crime (UNODC) study on Crime and development in Africa (2005a) documents the emergence of organised crime on the continent and its links to conflict. It notes that the growth in international commerce and transport has made Africa, with its weak law enforcement capacity, an ideal conduit through which to extract and trans-ship a range of illicit commodities. Drugs, firearms and human beings are being trafficked, and gemstones and other minerals, petroleum, timber and ivory are being illegally extracted from the continent.
2024
ABSTRACT & RÉSUMÉ & ZUSAMMENFASSUNG: Sub-Saharan Africa (SSA) accounts for a third of the countries on the Financial Action Task Force (FATF) grey list. In the Money Laundering and Terrorist Financing (ML/TF) Ranking and Risk Assessment Tool, the region performed poorly in terms of resilience to ML/TF, with more than 60% of countries falling into the high-risk category. Although countries on the grey list are not subject to sanctions, inclusion on the list has a significant impact on their economies. This includes a significant reduction in capital inflows and foreign direct investment. The four main sources of illicit financial flows from SSA, South Africa, the Democratic Republic of Congo, Ethiopia and Nigeria, accounted for more than 50% of total illicit financial flows. While SSA received nearly 2trillioninforeigndirectinvestment(FDI)andofficialdevelopmentassistance(ODA)between1980and2018,itissuedover2 trillion in foreign direct investment (FDI) and official development assistance (ODA) between 1980 and 2018, it issued over 2trillioninforeigndirectinvestment(FDI)andofficialdevelopmentassistance(ODA)between1980and2018,itissuedover1 trillion in illicit financial flows. These illicitly acquired funds and diverted from the region continue to pose a development challenge. Illicit financial flows increased overall, but not concerning trade. In the 38 years from 1980 to 2018, they increased significantly in the 2000s, in parallel with the growth of African trade. Emerging and developing countries in Asia and the Middle East have become key targets. Previous initiatives to curb money laundering and improve the exchange of tax information between countries have largely failed, including the three most important: the Financial Action Task Force (founded in 1998), the Global Forum on Transparency and Exchange of Information for Tax Purposes (founded in 2009) and the Inclusive Framework on Base Erosion and Profit Shifting (founded in 2016). First, African countries lack the resources and capacity to address illicit financial flows. Second, many advanced economies are not sufficiently engaged in these initiatives. However, the repatriation of illegal funds is an important tool for strengthening the resource base of African countries. In 2020, for example, the United States and the self-governing British Crown Dependency of Jersey, one of the world's most notorious tax and money laundering havens, reached an agreement with Nigeria to repatriate more than $300 million stolen by Nigeria's former military dictator General Sani Abacha. -------------------------------------------------------------------------------------------------------------------------------------------------- RÉSUMÉ : [Les mesures internationales contre le blanchiment d’argent et l’évasion fiscale, ont-elles un impact significatif en Afrique subsaharienne ?] - L’Afrique subsaharienne (ASS) représente un tiers des pays figurant sur la liste grise du Groupe d’action financière (GAFI). Dans l’outil de classement et d’évaluation des risques du blanchiment d’argent et du financement du terrorisme (BC/FT), la région a obtenu de mauvais résultats en termes de résilience au BC/FT, avec plus de 60 % des pays entrant dans la catégorie à haut risque. Bien que les pays figurant sur la liste grise ne soient pas soumis à des sanctions, leur inscription sur la liste a un impact substantiel sur leur économie. Cela comprend une réduction significative des entrées de capitaux et des investissements directs étrangers. Les quatre principales sources de flux financiers illicites en provenance d’Afrique subsaharienne, d’Afrique du Sud, de République démocratique du Congo, d’Éthiopie et du Nigeria, représentaient plus de 50 % du total des flux financiers illicites. Alors que l’ASS a reçu près de 2 000 milliards de dollars d’investissements directs étrangers (IDE) et d’aide publique au développement (APD) entre 1980 et 2018, elle a émis plus de 1 000 milliards de dollars de flux financiers illicites. Ces fonds acquis illégalement et détournés de la région continuent de poser un défi au développement. Les flux financiers illicites ont globalement augmenté, mais pas en ce qui concerne le pourcentage de commerce. Au cours des 38 années allant de 1980 à 2018, ils ont considérablement augmenté dans les années 2000, parallèlement à la croissance du commerce africain. Les pays émergents et en développement d’Asie et du Moyen-Orient sont devenus des cibles privilégiées. Les initiatives précédentes visant à lutter contre le blanchiment d'argent et à améliorer l'échange d'informations fiscales entre les pays ont largement échoué, y compris les trois plus importantes : le Groupe d'action financière (fondé en 1998), le Forum mondial sur la transparence et l'échange d'informations à des fins fiscales (fondé en 2009) et le Cadre inclusif sur l'érosion de la base d'imposition et le transfert de bénéfices (fondé en 2016). Premièrement, les pays africains manquent de ressources et de capacités pour lutter contre les flux financiers illicites. Deuxièmement, de nombreuses économies avancées ne sont pas suffisamment engagées dans ces initiatives. Cependant, le rapatriement des fonds illégaux constitue un outil important pour renforcer la base de ressources des pays africains. En 2020, par exemple, les États-Unis et la dépendance autonome de la Couronne britannique de Jersey, l'un des paradis fiscaux et de blanchiment d'argent les plus notoires au monde, ont conclu un accord avec le Nigeria pour rapatrier plus de 300 millions de dollars volés par l'ancien dictateur militaire du Nigeria, Sani Abacha. ------------------------------------------------------------------------------------------------------------------------------------------------------ ZUSAMMENFASSUNG: [Haben internationale Maßnahmen gegen Geldwäsche und Steuerhinterziehung erhebliche Auswirkungen in Afrika südlich der Sahara?] - Subsahara-Afrika (SSA) macht ein Drittel der Länder auf der grauen Liste der Financial Action Task Force (FATF) aus. Im Ranking und Risikobewertungstool für Geldwäsche und Terrorismusfinanzierung (ML/TF) schnitt die Region in Bezug auf die Widerstandsfähigkeit gegenüber ML/TF schlecht ab, wobei mehr als 60 % der Länder in die Hochrisikokategorie fielen. Obwohl Länder auf der grauen Liste keinen Sanktionen unterliegen, hat die Aufnahme in die Liste erhebliche Auswirkungen auf ihre Wirtschaft. Dazu gehört eine deutliche Reduzierung der Kapitalzuflüsse und ausländischen Direktinvestitionen. Auf die vier Hauptquellen illegaler Finanzströme aus SSA, Südafrika, die Demokratische Republik Kongo, Äthiopien und Nigeria, entfielen mehr als 50 % der gesamten illegalen Finanzströme. Während SSA zwischen 1980 und 2018 fast 2 Billionen US-Dollar an ausländischen Direktinvestitionen (FDI) und offizieller Entwicklungshilfe (ODA) erhielt, emittierte es über 1 Billion US-Dollar an illegalen Finanzströmen. Diese unrechtmäßig erworbenen und aus der Region abgeleiteten Gelder stellen weiterhin eine Entwicklungsherausforderung dar. Die illegalen Finanzströme nahmen insgesamt zwar zu, nicht jedoch im Verhältnis zum Handel. In den 38 Jahren von 1980 bis 2018 stiegen sie in den 2000er Jahren deutlich an, parallel zum Wachstum des afrikanischen Handels. Schwellen- und Entwicklungsländer in Asien und im Nahen Osten sind zu Hauptzielen geworden. Die bisherigen Initiativen zur Eindämmung der Geldwäsche und zur Verbesserung des Austauschs von Steuerinformationen zwischen Ländern sind weitgehend gescheitert, darunter die drei wichtigsten: die Financial Action Task Force (gegründet 1998), das Global Forum on Transparency and Exchange of Information for Tax Purposes (gegründet 2009) und das Inclusive Framework on Base Erosion and Profit Shifting (gegründet 2016). Erstens mangelt es den afrikanischen Ländern an Ressourcen und Kapazitäten, um gegen illegale Finanzströme vorzugehen. Zweitens engagieren sich viele fortgeschrittene Volkswirtschaften nicht ausreichend in diesen Initiativen. Allerdings ist die Rückführung illegaler Gelder ein wichtiges Instrument zur Stärkung der Ressourcenbasis afrikanischer Länder. Im Jahr 2020 einigten sich beispielsweise die Vereinigten Staaten und das selbstverwaltete britische Krongebiet Jersey, eines der berüchtigtsten Steuer- und Geldwäscheparadiese der Welt, mit Nigeria auf die Rückführung von mehr als 300 Millionen US-Dollar, die vom ehemaligen nigerianischen Militärdiktator General Sani Abacha gestohlen worden waren.
Anti-Money Laundering Recommendations for Cash-Based Economies in West Africa
Corporate Ownership and Control
Money laundering can boost corruption, worsen poverty, and bankrupt vulnerable financial institutions. In view of this, a study was conducted amongst the banks in West Africa, in cash-based economies, with the objective to ascertain the level of their Financial Action Task Force implementation. The study found that the implementation of the Financial Action Task Force recommendations in these countries was at different stages due to these countries being cash-based economies. The majority of these countries have anti-money laundering legislation but lack the capability to monitor and counter money laundering activities. This may be ascribed to a lack of adequate resources, expertise, investigations and prosecution capabilities. Some amendments to the Financial Action Task Force recommendations are proposed to incorporate cash-based economies in order to effectively combat money laundering.
2011
The relationship between anti-money laundering and anti-corruption strategies is a key issue for developing countries. Corruption and money laundering cannot be effectively addressed solely by the specialised agencies mandated to deal with them. Supportive frameworks and complementary structures, such as other public agencies closely associated with vulnerable sectors, must be involved. These structures should be familiarised with money laundering risks and typologies and with the important role they can play in gathering intelligence that contributes to the work of financial intelligence units. FIUs in the countries studied here-Botswana, Tanzania, and Zambia-are undermined by lack of human and financial resources and by flaws in enabling legislation. In order to effectively contain the threat of money laundering as a facilitator of corruption, they need to confront context-based particularities, notably the prevalence of cash transactions in the economy. Governments and donors in developing countries should work to build the capacity of the financial intelligence units and strengthen their collaboration with anti-corruption agencies and with complementary institutions and partners at home and abroad.
One of the most common economic and financial crimes in Nigeria today is Money Laundering. This was unknown in the country until the late 1980 and it has since then penetrated every portion of the Nigerian society playing a significant role in both the public and private sector. Money Laundering is an offence that involves conception, planning and execution which is usually committed by political leaders, civil servants and business elites in the society. These are people who are entrusted with managing public funds for the benefit of the larger society but they turn around to betray such trust and confidence expected of them by laundering huge sums of money and placing them in financial institutions located in foreign jurisdictions. This has several disadvantageous effects in regards to the economic development, financial stability and also political growth on any society or country where it thrives. This research focuses on critically analysing the legal and institutional framework for combating money laundering in Nigeria. Examining the effectiveness of the provisions of the law and how it has assisted in the fight against this act which has posed as a threat and also the challenges faced by the institutional bodies that enforce the laws in the society. This research however aims to conduct a clear comparative analysis on the legal framework of money laundering regulations in Nigeria with particular reference to the Economic Financial and Crime Commission Act and the Money Laundering Act also appraising the extent to which the role of the Financial Action Task Force has contributed in the fight towards combating money laundering , the weakness and success of the anti-corruption bodies and in addition a view in prescribing solutions and recommendations by which the Nigeria system can be improved.
MUTUAL LEGAL ASSISTANCE AS AN EFFECTIVE TOOL TO COUNTER MONEY LAUNDERING IN AFRICA Kuza
This research work was submitted to the United Nations Interregional Crimes Research Institute (UNICRI) in conjunction with University of Turin (UNITO) in fulfillment of long essay required for the award of Masters of Laws Degree (LL.M) in International Crimes and Justice, 2015. Money laundering has become the biggest sustainer of underdevelopment in Africa and other third world countries. The situation is even more complex when more than one sovereign states are involved. This research was deliberately carried out as the humble contribution of the author towards strengthening understanding of the issues connected to this transnational crime. The recently released Panama papers have thrown more light on the spate of international decay courtesy money laundering. For Africa to experience true and sustainable development, it must redefine the concept of 'African Pride' to include cooperation even in the fight against crime. Our desire for foreign investment must also be based on principles. The author is already working on another research within this subject area, but with more emphasis or focus on the liability of financial institutions and professional bodies whose inputs makes it possible for dirty transnational cash movements.
Money Laundering/Terrorist Financing and the Smuggling of Goods in West Africa
GIABA Smuggling Report, 2020
This study was conducted by GIABA in order to explore the linkages of money laundering and terrorist financing (ML/TF) to the smuggling of good in West Africa. Goods smuggling is known to be a lucratively rampant criminal activity across the region that has defied law enforcement efforts over the past decades. However, while it is generally accepted that goods smuggling has become a serious transnational organised crime in the region, there has been no concern about the illic financial proceeds that flow from the activity. This study was embarked upon to focus on such illicit proceeds and to explore the risks of ML/TF associated with the criminal activity. Hence, the study is not a regular typologies exercise, which typically builds on existing cases of ML/TF to establish trends and methods. In undertaking this study, data was collected from all 15 member States of GIABA. Questionnaires were administered and interviews held during visits to the countries by the GIABA research team.
Money Laundering and Financial Crimes in Nigeria
Journal of Poverty, Investment and Development, 2018
This paper, therefore, presents an evaluation of the strategies and future directions of money laundering in Nigeria, as it is a ‘new’, dynamic place in which to conduct business and the financial centre of the Nigeria. It examines the various ways in which legislation and law enforcement in Nigeria are struggling with and tackling the issues and problems of money laundering in the face of organised crime and terrorism. In this paper, the concepts of money laundering and financial crimes in Nigeria, with a special focus on strategies as well as future direction of control, are explored in some depth. This work has established that Nigeria has a substantial anti-money laundering framework; however, it suffers from some weaknesses. These weaknesses are caused by the poor relationship between anti-money laundering units, the Anti-Organised Crime Department of the Nigeria police, the financial sector and the Central Bank of Nigeria. This situation is particularly evident when it comes t...