Nigeria has, applied for membership of the Financial Action Task Force (FATF ). One of the criteria for that membership is the joint GIABA/FATF Mutual Evaluation Exercise of Nigeria. As a precursor to the Mutual Evaluation, the Governing Board of the FATF is expected in Nigeria this July. Nigeria has made commitment to improve its standard, maintain a high culture of compliance and other international standards.. On its own the Banking Sector is determined to walk the meticulous and tedious road of focused, effective, legal and regulatory framework of its Anti Money Laundering/CFT thus meeting the Mutual Evaluation requirements and criteria Adedayo Adejobi writes
According to research by UNODC (United Nations Office on Drugs and Crime) report in 2011, estimates of the size of the money laundering totals is more than $2.1trillion annually worldwide. More than 70% of this value was laundered through the financial system. Global value of Accrued Monies Laundered equals the economy of Spain or Canada. In 2016, PriceWaterhouseCoopers reckons that the Global figure on AML Compliance is set to grow to more than $8bn by 2017.
With the spate of Corruption, global Money laundering cases, distrust and reputational quagmire Nigeria is faced with, there is no better time than this offering. Equally, In a growing world of technological advancement where Terrorism Financing, Money Laundering and other financial vices are daily thriving and gaining grounds in this clime, the Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), have no doubt set the tone against the criminal abuse of the financial system , Nigeria’s economy-wrecking vices through the first of its kind workshop in preparation for the second round of the GIABA/FATF mutual evaluation.
On the Historical background behind setting up the Financial Action Task Force (FATF),it was founded in 1989. Initial members were the G7 states: Canada, France, Germany, Italy , Japan ,United Kingdom andUnited States . The basis for set up was the emerging threat of money laundering to the banking system and financial institutions.
The FATF is the global standard-setter in the fight against money laundering, financing of terrorism and proliferation of weapons of mass destruction. Over the past twenty years the FATF has developed, used and refined rigorous compliance mechanisms to help ensure global compliance with its Standards. It assesses compliance through a stringent country evaluation and monitoring process. The FATF conducts peer reviews of each member on an ongoing basis to assess levels of implementation of the FATF Recommendations, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system. The mutual evaluation exercises help to determine whether a country is sufficiently compliant with FATF Standards and whether its AML/CFT system is working effectively.
Most worrying, on the premise of the GIABA pre-assessment workshop organised in March 2016; organising the workshop just a few months after the GIABA workshop is an indication that Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), are ever awake to their responsibilities, having indeed paid attention to all the issues and deficiencies raised by GIABA at the said workshop.
As Nigeria sets to undergo the 2nd round of the Mutual Evaluation based on the FATF recommendations (2012) and the methodology for assessing compliance with FATF recommendations and the effectiveness of the Anti-money laundering (AML/CFT) systems 2013. In readiness for the forthcoming exercise, most especially as reporting and accountable institutions under the FATF recommendations, operating banks in Nigeria will play significant roles before, during and after the Mutual Evaluation Exercise. Their level of performance could make or mar the exercise.
To understand the technical and effectiveness compliance associated with the Recommendations, outline core issues that will be considered by the Assessors during the Mutual Evaluation ,illustrate success stories, scenarios and case study that could aid the implementation technical and effectiveness compliance, identify the parameters for testing technical and effectiveness compliance in banks and most crucially adequately prepare operating banks in Nigeria for this exercise Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN) decided on this Pre- Mutual Evaluation workshop in line with the mandate of GIABA/FATF.
Nigeria has recently conducted its National Risk Assessment, the report was presented to the public at a workshop organised by the NRA secretariat in conjunction with the World Bank. It has received reassuring and encouraging comments from the World Bank and equally been enjoined to do more by improving on its achievements by consistently maintaining a high culture of compliance to the MLPA, regulations as well as the TPA 2011, and other international standards.
Through a paper Presented by Pattison Boleigha on the need, implementation structure and expected outcomes for the recommendations ‘’The Methodology comprises two inter-linked components: The technical compliance assessment will address the specific requirements of each of the FATF Recommendations, principally as they relate to the relevant legal and institutional framework of the country, and the powers and procedures of competent authorities. These represent the fundamental building blocks of an AML/CFT system.The effectiveness assessment will assess the extent to which a country achieves a defined set of outcomes that are central to a robust AML/CFT system and will analyze the extent to which a country’s legal and institutional framework is producing the expected results.’’ He explained
In a goodwill message given by Francis Usani the Director, NFIU at the Pre-Assessment workshop on the GIABA/FATF 2nd roundtable of mutual Evaluation Exercise held at the Eko Hotel, he said, ‘‘ The purpose of this workshop is not limited to creating awareness within our respective sectors, organisations or entities on the imminence of the second round of GIABA Mutual Evaluation, but rather to curt the interest, consciousness and total participation of stakeholders as well as apportion duties and responsibilities. The importance of a favourable Mutual Evaluation Excercise to a country like Nigeria cannot be over emphasized, those of us who had been around during the 2008 MEE of Nigeria can attest to the consequences of the 2008 Evaluation report on Nigeria, the consequential damage that report had on the economy of Nigeria and its reputation was devastating.’’
Reiterate his gratitude to the CCCOBIN for organising this workshop which also indicates that Nigeria is preparing not to fail but to maintain its status as the regional champion on AML/CFT in the West Africa sub region, he gave the parable, "failure to plan and get ready is akin to planning to fail". This workshop is therefore timely and most appropriate and it indicates that we are planning to succeed.’’
Drawing from a domesticated Case study ,In 2014, the son of president of oil-rich Equatorial Guinea, Teodorin Obiang, was charged with money-laundering, in connection with a corruption scandal involving three African countries by the French Authorities. In 2012, France had issued an arrest warrant for him and seized his Paris mansion and several of his luxury cars. Evidence pointed to corruption by Teodorin on a scale that would not be possible or attractive if countries like Germany and the U.S. were not safe havens, in terms of free passage for him and for his questionable private wealth. A report from the Senate Permanent Subcommittee on Investigations alleged that Teodorin had used shell companies to evade money laundering laws and had brought more than $100 million into the U.S. The US government also pursued a claim against Teodorín, seeking forfeiture of more than US$70 million in assets it says he purchased with laundered funds. Mr. Teodorin Obiang had accounts with domestic banks in Equatoria Guinea that had no established policies on acceptance criteria and management of PEPs and were willing tools for all his transactions.
Public Exposed Persons in the categories- Elected politicians at National, State and Local Government levels occupying positions in the Executive Arm of Government, politicians in the Legislative Arm of Government including Senators, House of Representatives, House of Assembly and Honourable members, Senior Members of the Judiciary including all Judges, Justices of Court of Appeal and Supreme Court and equivalents in the Sharia Court . Appointed Public Officers including Ministers, Commissioners, Advisers, Personal Assistants, and all those in their entourage. Senior Civil Servants from the position of Deputy Director and above working at National, State or Local Government levels in the Executive, Legislative or Judicial arm of Government . Senior Military, Security or Law Enforcement Officers from the rank of Colonel and above and its equivalent in the Navy, Air Force, Police, customs, Immigration etc .Board and Management of all Government Agencies, Corporations, Organisations, Institutions and Parastatals at National, State and Local Government Levels. Chairmen and Executive Management and all those who run the Secretariats of all the Political Parties at National, State and Local Government Levels. Political Chieftains and Godfathers .Board Members of all Political Parties .All Traditional Rulers
With the above in view, through a recent research conducted, the Managing Director of DataPro Limited, Abimbola Adeseyoju highlighted solutions through Risk profiling of Politically Exposed Persons , thus establishing mechanism to determine the source of funds and source of wealth, beneficial ownership and Effective transaction monitoring of their accounts through the deployment of an all-in-one AML/CFT solution covering name search, transaction filtering, due diligence, sanctions compliance and risk management will aid the detection of PEP. An internal register should be created for easy identification of PEP, beneficial owners etc
At the end of the workshop, the banks were trained to be able to prevent terrorists, terrorist organisations and terrorist financers from raising, moving and using funds and from abusing the NPO sector using its platform, channel , products or services.
With a great array and caliber of experts, listed to facilitate in this programme and did justice to the various topics designed for the 3-day workshop, Nigerian Financial Institutions are saddled with responsibility to properly identify, assess and understand its ML & TF risks and cascades this throughout the bank.
What seems most crucial in the scheme of things is the involvement of the Senior Management- Board (Tone-at-the-Top) and every department and business units using the assessments of risks as a basis for all AML/CFT policies and procedures, and communicating and implementing these policies and activities in a coordinated way throughout the bank.
Should Nigerian financial institutions focus on the implementation of the outcomes of the workshop through constructive criticisms, by jettisoning their usual character of talking and not working the talk. It is wisdom to keep doing what they do right and improve on areas of challenges. Mutual evaluation time is the time to improve Nigerian financial institutions’ status and how they are perceived by other nations. The writer is no doubt convinced that if they all play their part, Nigeria shall have cause to celebrate at the end of the day.