International Measures and Cooperation in Anti-Money Laundering and Counter Financing of Terrorism: An Examination of Compliance by the ECOWAS and Nigeria

AutorSharkdam Wapmuk

Over the years, governments and law enforcement agencies in various countries around the world have struggled to cope with the pressures of international crimes such as illicit trafficking of arms and persons, trans-border theft and armed robbery, drugs, narcotics and so many others. Globalization and the advances made in information and communications technology have provided criminals with loopholes, which they exploit, with a view to concealing the origins of funds that they have gained through illegal activities. They make extensive use of various techniques, such as the rapid transfer of money from one country to another and/or the use of financial systems to disguise the true owners of the funds. Laundered money therefore provides drug traffickers, organized criminal groups, arms dealers and terrorist groups with the wherewithal for operating and developing their enterprises. Similarly, those who finance terrorism also use the financial system in their activities. The dirty money, which has its origins in criminal activities and which is concealed through money laundering to make it look legitimate, may be used to finance terrorist groups or individuals. Money laundering and the terrorist financing are global problems that not only threaten security, but also compromise the stability, transparency, and efficiency of financial systems, thus undermining economic prosperity of countries.

While international cooperative efforts to address these challenges have been on for some time, it was the events of September 11, 2001, that made the international community to underscore the links between terrorism, transnational organized crime, the international drug trade and money laundering. Accordingly, countries that had not become parties to relevant international conventions were called upon to do so. In September 2001, the UN Security Council (UNSC) adopted Resolution 1373 through which it imposed certain obligations on Member States, such as the prevention and the suppression of the financing of terrorist acts, the criminalization of terrorism-related activities and of the provision of assistance to carry out those acts, the denial of funding and safe haven to terrorists and the exchange of information to prevent the commission of terrorist acts.

The global agenda to curb abuse of financial systems calls for a cooperative approach among countries, and many different international bodies such as the UN and its agencies, IMF, World Bank and regional organizations, including those closer home such as the AU, ECOWAS, SADC and many others. International cooperation in addressing these challenges has led to the development of a number of international legislations on Money Laundering and financing of terrorism. These include amongst others: United Nations Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention), 1988; The International Convention for the Suppression of the Financing of Terrorism 1999; the UN Convention against Corruption and the International Convention for the Suppression of the Financing of Terrorism all contain provisions relating to the tracing, freezing, seizing and confiscation of instrumentalities and proceeds of crime and The United Nations Convention on Transnational Organised Crimes (Palermo Convention), 2000, which seeks to provide a more encompassing umbrella for the fight against money laundering and transnational crimes. This treaty was ratified by several ECOWAS countries and came into force on 29th September 2003. Other international practices and policy papers on money laundering and predicate offences adopted by members of ECOWAS include the 40+9 recommendations by the Financial Action Task Force (FATF) on financing and laundering of money for acts of terrorism; the Statutes of the Inter- Governmental Action Task Force against Money Laundering in Africa (GIABA) passed by the First Ministerial meeting on the Inter-Governmental Action Task Force against Money Laundering in Africa in Dakar Senegal on November 3 2000 and the Basic declaration on the prevention of criminal use of the Banking system for the purpose of Money Laundering.

This paper attempts to examine the current international cooperation in anti-money laundering and counter financing of terrorism. It will also review West Africa and Nigeria’s compliance with these international legislations against money laundering and financing of terrorism. Recently, Nigeria has had serious terrorist attacks of its own: on 1 October, 2010 when she was marking her 50 independence anniversary, the bombing at the police headquarters in Abuja, the bombing of the UN building in Abuja, all in 2011 and also various bombing attacks by the Boko Haram group in some northern states of the country. These attacks have increased concerns over terrorism at the national and international levels. This study will also attempt to examine existing institutional and legislative controls against terrorism and give a comment on their adequacy.

Defining Money Laundering and Terrorism

The terms money laundering and terrorism are two of the most widely discussed phenomena in contemporary law enforcement. Beginning with money laundering, though the definition of the term has been problematic, it has been defined as ‘any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources’ (Madzima, 2009: 2). According to the African Development Bank (2007:2), money laundering is a process whereby the origin of funds generated by illegal means is concealed. It also argues that the process of money laundering involves three stages: (1) the introduction of the proceeds of crime into the financial system (placement); (2) transactions to convert or transfer the funds to other locations or financial institutions (layering); and, (3) reintegrating the funds into the legitimate economy as “clean” money and investing it in various assets or business ventures. The different, but adaptable methods, that are used to launder money may include, the use of internet services, on-line banking and new electronic payment technologies, international companies, trade and false invoicing for the supply of goods or services, real estates, art, diamonds, and gold and other precious metals. By definition, money laundering emanates from organised crime and the two are generally always mentioned in the same breath. While organised crime generates vast funds, criminal formations need to hide the illicit origin of their funds for the purposes of integrating them into the legitimate economic system and doing this constitutes money laundering.

The definition of terrorism is even more problematic. None of the prominent international institutions and protocols provides a consensual definition for terrorism. There are conceptual and intellectual divergences on the issue and the tendency is thus to describe acts of terrorism. This situation is attributed to the diverse political, religious and socio-cultural dynamics within the various jurisdictions. Various legal systems and government agencies use different definitions of terrorism. Moreover, the international community has been slow to formulate a universally agreed upon, legally binding definition of this crime. For instance Title 22, Chapter 38 of the United States Code (regarding the Department of State) contains a definition of terrorism in its requirement that annual country reports on terrorism be submitted by the Secretary of State to Congress every year. It states that: "... the term terrorism means premeditated, politically motivated violence perpetrated against noncombatant targets by sub-national groups or clandestine agents”. Title 18 of the United States Code (regarding criminal acts and criminal procedure) defines international terrorism as:

the term 'international terrorism' means activities that . . . involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State; [and] appear to be intended … to intimidate or coerce a civilian population; … to influence the policy of a government by intimidation or coercion; or … to affect the conduct of a government by mass destruction, assassination, or kidnapping; and [which] occur primarily outside the territorial jurisdiction of the United States, or transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum (Title 18 of US Code, Annual country reports on terrorism)

While this definition of terrorism may be regarded as Americo-centric and geared, primarily, towards safeguarding and protecting America’s interest at home and abroad, the British, Australians, Canadians, Israelis etc, all have their national conception of terrorism, without denying the fact that...

Para continuar leyendo

Solicita tu prueba

VLEX utiliza cookies de inicio de sesión para aportarte una mejor experiencia de navegación. Si haces click en 'Aceptar' o continúas navegando por esta web consideramos que aceptas nuestra política de cookies. ACEPTAR