Group tracks $30.4b illicit funds, lifts Africa’s economies - THE NATION

JULY 11, 2018


The Intergovernmental Action Group against Money Laundering in West Africa (GIABA) has organised its 29th Technical Commission/Plenary Meeting in Somone, Republic of Senegal, where it discussed, among member states, threats and challenges to Money Laundering and Terrorist Financing (ML/TF) in the region. COLLINS NWEZE writes on efforts to tackle the menace.

Money laundering has remained a major challenge to nations. The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) is at the centre of the fight against the menace and terrorist financing across the Economic Community of West African States (ECOWAS).

According to the group, about $30.4 billion is illegally transferred out of Africa yearly.  To stem the menace, GIABA is empowering key institutions to tackle illicit financial flows within the region.

GIABA said the Financial Action Task Force (FATF) requires countries to identify, asses and understand the Money Laundering/Terrorist Financing (ML/TF) risks to which they are exposed, take measures and mobilise resources to ensure that such risks are mitigated.

The group had, during its plenary’s preliminary meetings in Somone, the Republic of Senegal, ensured that follow-up reports on the Mutual Evaluation (ME) of Sao Tome & Principe, Benin, Nigeria, Sierra Leone, Togo, The Union of the Comoros and Guinea-Bissau were considered by the Evaluation and Compliance Group (ECG). The ECG will also consider the first follow-up report to the second round of mutual evaluation of Ghana.

The Financial Action Task Force-style regional Body (FSRB), GIABA meets twice yearly with its officials and experts to analyse, monitor and identify strategies for effective implementation of AML/CFT measures in member-states.

The mutual evaluation is designed to assess the implementation and effectiveness of the laws, regulations or other measures required by the core criteria, to ascertain whether the requisite measures have been comprehensively implemented and whether the AML/CFT regime is effective. The mutual evaluation process also provides information on the progress made by every member state in meeting its obligations towards the FATF recommendations.

According to GIABA, once the Mutual Evaluation Report (MER) of a country has been adopted, the Secretariat monitors progress being made, taking into account the deficiencies in the country’s AML/CFT regime.

It said the follow-up starts with the assessed country being required to present a report to the GIABA Plenary yearly after the adoption of its MER. While outlining the progress made, the country strives to address the deficiencies in its AML/CFT regime, emphasising the FATF core and key recommendations. Countries that fail to make any significant progress are placed on the enhanced follow-up process and, therefore, required to submit FURs to Plenary every six months. Furthermore, based on the principle of reciprocity, GIABA shares its MERs and FURs with FATF, observer members from, the World Bank, International Monetary Fund (IMF) and other FSRBs. This sharing guarantees the exchange of experiences, objectivity and transparency of the process.


The battle continues

The sorry state of public institutions within the ECOWAS region is disturbing. For instance, in many public schools, pupils learn sitting on the floors, the hospitals lack basic drugs, while the road networks are death traps.

These ills thrive in societies where corruption and illicit financial flows are rampant. GIABA Programmes and Projects Director said, Buno Nduka, said public institutions in the sub-region have suffered immensely from corruption in public and private sectors.

He spoke during a three-day regional workshop organised by GIABA on Investigative Reporting on Economic and Financial Crimes for Journalists from West African countries, in Saly, Senegal. He called on financial reporters to develop the right skills to help government and private sector operators fight corruption and tackle illicit financial flows.

He also expressed concerns over illicit financial flows (IFFs) from West African economies, and the need to tackle them by key stakeholders within the region.

Nduka urged financial reporters to investigate human trafficking, kidnapping, sexual exploitations, counterfeiting of currencies, extortion, and fraud in the banking sector across the ECOWAS. He said reports on such societal ills would enable law enforcement agents to catch the criminals.

He cited GIABA’s strategic plan, 2016 to 2020, which showed that the Global Financial Integrity (GFI), the World Bank, the African Development Bank (AfDB), the Africa Progress Panel and the African Union’s High Level Panel on Illicit Financial Flows from Africa (AU Panel) paint a grim profile of the problem.

A study by the GFI and the AfDB showed that between 2000 and 2009 that about $30.4 billion was illicitly transferred out of Africa yearly.

Over a longer period of 30 years, from 1980, the resource drain was between $1.2 and $1.3 trillion.

Outflows from West and Central Africa stood at (37 per cent), followed by North Africa (31 per cent) and Southern Africa (27 per cent). The IFFs are derived from various predicate offences of money laundering.

According to GIABA Information Manager, Timothy Melaye, GIABA remained a specialised institution of the ECOWAS as well as Financial Action Task Force –Styled Regional Body (FSRB) responsible for combating the scourge of Money Laundering and Terrorist Financing in West Africa.


“GIABA is a change agent. We build capacity, collaborate and sanction countries when they refuse to comply with the Financial Action Task Force (FATF) 40 recommendations. We also promote the economies of member ECOWAS states,” he said.

He however, said that GIABA Cannot implement sanctions against money launderers but can make public statements against countries with significant deficiencies in implementing the FATF recommendations.

He said, such public statement against a blacklisted country, can dry up foreign investments into affected countries, and spread the message that such country is not safe for business.

Dangers of terrorist financing

GIABA’s Strategic Plan, 2016 to 2020, said some of the funds that support the violent extremism being experienced in some parts of the region either originate from West Africa or traverse it.

It said the  escalation  of  terrorist  acts  being  committed  by  Boko  Haram,  Ansar  Dine,  Al  Qaeda  in  the Maghreb  (AQIM)  and  the  Movement  for  Oneness  and  Jihad  in  West  Africa  (MUJAO),  has attracted  regional  and  global  concern.

In  September  2015,  Amnesty  International  reported  that from  January  2015,  Boko  Haram  had  killed  more  than  3,500  civilians  across  four  countries (Nigeria, Cameroun, Chad and Niger).  “The resilience of the terrorist networks suggests that they have  been  innovative  in  sustaining  themselves,  using  various  methods  and  techniques  to  raise, move and utilize funds in order to carry out terrorist activities. Smuggling of goods has been found to be central to the financing of terrorist activities,” it said.


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