Money laundering was not considered a crime until the 1980s, when the United States congress passed series of law to criminalise it. It is the process through which a criminal attempts to conceal the true origin and ownership of the proceeds of his criminal activities.
These criminal activities include drug trafficking, terrorism, fraud, embezzlement, tax evasion and political theft. In simple English, it means changing “dirty money” to “clean money” and making it look as if it came from a legitimate source. The main objective of every launderer is to move, spend and invest monies from his criminal activities and also shield it from detection and taxation.
The phrase “Abacha loot” is not new to every literate Nigerian. The Switzerland government has returned a total of $723 million loot to the Nigerian government in the last ten years while more funds are still expected from other countries where these monies were illegally deposited. I’m sure these huge amounts weren’t ferried to those countries by boat or ship. This simply is an excellent result of a well calculated and coordinated money laundering master plan.
Money laundering can take several forms which includes smurfing, layering and integration. Smurfing is when a person goes to various banks and makes several deposits on the same day or consecutive days. A typical case was when the personal assistant to a top senator in the National Assembly who’s currently standing trial at the code of conduct tribunal (CCT) for false asset declaration was alleged to have deposited N600, 000 – N900,000 cash 50 times a day into the senator’s bank account. Layering is the scheme of converting cash into monetary instruments such as stocks and bonds. It encompasses making wire transfers or purchasing expensive assets. Integration is the process of routing money into the banking system to make it appear that it comes from normal business earnings. Since money launderers need to provide an explanation for their wealth to be legitimate, they wire funds to foreign countries which are mostly tax havens. Tax havens are countries with either no or low taxes, which attract deposits and capital investment. They also have bank secrecy laws or customs.
The President Buhari led administration is seen to be waging a war against corruption and by extension, money laundering which is highly commendable. Efforts are also being made to ensure an expedite repatriation of these stolen funds to the coffers of the government is effected through strategic alliances and collaborations with other countries. Despite all these laudable efforts, it is unfortunate that no offender has been jail or convicted till date.
Nigeria already has a surfeit of laws to tackle this crime in the Money laundering prohibition act 2012. The main challenge is that of implementation. Money laundering prosecution cases should be not seen to be politically motivated, selective and biased towards a particular tribe or section of the country.
The EFCC should be more funded and its officials updated with new money laundering detection and tracking techniques. The judiciary arm of government should jettison the judicial delay tactics. The process of concluding money laundering cases should be fast tracked. I think James Ibori would have either been acquitted or his case remains inconclusive if his trial were to take place in Nigeria. It is so sad we now have look up to the UK government to fight our anti money laundering battle and get conviction for us. The commission should get its facts and evidences right before arresting or apprehending suspected offenders. Failure to do this would only amount to grandstanding and mere showmanship.
Professionals such as accountants, lawyers and tax practitioners should also raise the level of their professional scepticism and be alert to cases where criminals may establish companies with the motive of using transactions between these companies to launder their dirty money. They should also place controls and systems to ensure their firms are not used for money laundering purposes. Establishing procedures within their firms for reporting any suspicion of money laundering by clients companies is also very important. These obligations are wide ranging and professionals need to be fully aware of the extent of their obligations.
The Central bank of Nigeria (CBN), banks, and other financial institutions should work in tandem with one another because most times, these institutions act like the conduit pipes through which these illicit transactions are perfected.
Money laundering is a monster that has to be fought. Let’s imagine the kilometres of roads, hospitals and other infrastructural facilities these stolen funds would have been used to construct, build and commission if they weren’t stashed away to foreign lands.
God bless Nigeria
Adeniyi Bamgboye is a consultant who focuses on accounting, audit, tax and business advisory.He holds an MBA in financial management. He is a member of Association of Certified Chartered Accountant (ACCA), Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Taxation of Nigeria (CITN). Adeniyi Bamgboye can be contacted via [email protected]