Sunday, April 17, 2011

Cash Most Important ‘Commodity’ but…………..

NEWS BANJUL THE GAMBIA (MB)- Perhaps the most important ‘commodity’ smuggle in West Africa for the purposes of money laundering is cash, according to information contained in the Inter-Governmental Action Group Against Money Laundering in West Africa better know as GIABA, in its report title “ Threat Assessment of Money Laundering and Terrorist Financing in West Africa.”
  According to the threat assessment, money is the lifeblood of crime, as it is of any business, and so the legitimate of illicit proceeds is essential for organised criminals to return a profit on their nefarious activities, said GIABA report.

 As such, the report said that the fight against money laundering is a crucial part of international efforts to prevent and disrupt criminal activity of all types.
Furthermore, the financing of terrorism poses a significant threat throughout the Africa and the world at large, it continued, so multilateral efforts to stave terrorists of the funds they require to carry out attacks is key component in broader efforts to ensure international peace and security.
In this, GIABA say the Financial Action Task Force (FATF) that launched the report, aimed at discerning the nature and scale of the threat faced by states around the world from money laundering and terrorist financing.
According to the report, the threats of money laundering and the financing of terrorism are of significant concern in West Africa. In deed, certain considerations pertinent to West Africa, such as the size of the informal economy, the nature of tax evasion in the region, the problem of corruption, and the region’s role as a drug transit point, present particular difficulties with regard to money laundering and the financing of terrorism, the report cited. 
Accordingly, a through understanding of the unique environment for money laundering and terrorism financing in West Africa is an essential part of any threat assessment, added GIABA threat assessment report.
 The threat assessment report remarked that “cash is the main means of payment and also comprises a contraband commodity itself. Many interlocutors throughout the region have stressed the difficulty of complying with FATF Special Recommendations IX in the West Africa.”
 GIABA added that those permeable borders, communities that straddle borders and corrupt border officials make the recommendation especially hard to meet in the region.
It went on further to say that, much cross-border cash flows are derived from essentially legitimate rather than criminal activity; many of the countries in the region have considerable historical business ties and these, the report went on, transactions have been carried out in cash. .
The volume of this, the report cited can actively be obscure to law enforcement agencies as cash being smuggle across border that is derived from criminal rather business activity.
 This situation, according to the report, is compounded by inefficiencies in and constraints on the banking business system, which also encourage smuggling. BIABA sources from both the private and public sectors in the region asserted that business and criminals often prefer to move cash across borders rather than use the banking sector due to the significant time delays at the banks and in some cases, large charges associated with the latter by the banks, makes smugglers to use the boarders. 
Further, there is limited understanding of the banking system which is compounded by relatively low levels of education in the population and a lack of trust in the formal financial sector. Also, cash is easily portable and accepted in large quantities throughout the region.
The threat assessment report adds: “cash smuggling is facilitated by the complicity of some airport security agents and other officials working at the airport, and passage can be eased by the liberal paying of bribes.”
According to the report, cash is also possible to smuggle it between two countries that share the same boundaries saying that it is often hidden in bales of cloths and within the soles of shoes. 
“Nigerian naira, British pounds, US dollars and euros, as well as counterfeit notes printed on either side of the border, are all smuggled. The smugglers hide funds in a variety of sealed items, such as cans of tomatoes paste, frozen turkeys, local bread, as well as in bags of rice and containers of vegetable oil and in the boots of smuggled cars.”
According to the assessment report, cash is also smuggled through the postal system but two problems arise in smuggling cash by postal that is the limits are, however, commonly exceeded and cash is frequently sent without an appropriate declaration, since customers are unwilling to declare money for fear of pilfering.
The option to transfer money electronically, which has existed since 2006, GIABA reported that the method is still not widely used, suggesting that individuals prefer sending physical cash in the post as they can do so undetected.
 The assessment report stated that the financial sector facilitates large cash transfers noting that banks sometimes permit large sum of cash to pass through their payment system.
Some banks, including large western banks, do not observe regulations aimed at monitoring currency movements adding that prosecutors occur if customs can prove the money has gone overseas and fines of up to five times the value of the transfer are enforced. However, prosecutions are scant owing to difficulties following and tracing funds.
 An alternatively means of smuggling, the report pointed out that is by using foreign currency companies, usually bureaux de change, with offshore accounts. 

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