Friday, October 28, 2011

GAMBIA: Not A Known Money Laundering Hub

Dr. Abdullah Shehu

The 2010 report of the Intergovernmental Action Group Against Money Laundering in West Africa, popularly called GIABA, has looked at the prevalence of predicate crimes in the Gambia and ongoing efforts against money laundering and financing of terrorism.
The report noted that the Gambia is not a regional centre, although it is a regional re-export centre. Goods and capital are freely and legally traded in The Gambia, and as is the case in other re-export centres, “smuggling of goods occurs”. 
The Inter-Governmental body’s report also pointed out that, Customs officials in the Gambia cooperate with their counterparts in Senegal to combat smuggling along their common border, “although The Gambia has limited capacity to fully monitor its porous borders.
“The lack of resources hinders law enforcement’s ability to combat possible smuggling, even though there is the political will to do so.  “Though money laundering is thought to take place on a small scale, The Gambia is not a known ML {Money Laundering} hub in the region”.
According to GIABA, it is unknown to what extent money laundering is related to narcotics proceeds. 
However, it added that the increasing number of local and foreign banks in The Gambia has raised some questions as to whether they may not be providing additional risk if regulation is not enhanced.
“ In The Gambia, proceeds of crime are mainly derived from drug trafficking, bribery and corruption, the tourism industry, foreign exchange transactions, and other related acquisitive crimes.
“The magnitude or severity remains difficult to determine,” GIABA noted of the Gambia.
It however pointed out that the porous borders, weak controls, prevailing poverty, dominance of cash transactions, poor Know Your Customer (KYC) compliance culture, massive inflows of tourists and anecdotal evidence of increasing drug-related and other criminal activities are all factors contributing to an increase in the ML {Money Laundering} risk environment in the country. 
GIABA in its report further lamented that public corruption is perceived to be quite high as the Gambia is ranked 106 0f 180 nations in Transparency International’s 2009 Corruption Perception Index (CPI). 
It went on: “Though the Gambia has signed the African Union Convention on the Prevention and Combating of Corruption, it is yet to sign the UN Convention Against Corruption. 
“The Gambia has laws in place criminalizing corruption but they are not effectively implemented as no specific government agency is responsible for combating corruption. 
“Public officials are not subject to financial disclosure requirements.”
The Gambia’s is vulnerability to the activities of organised crime and drug trafficking, was also acknowledged by the anti-Money laundering and terrorism financing body.
It also reported that The Gambia Drug Control Agency (NDEA) stated in its 2007 Annual Report that the number of arrests of drug traffickers has increased since 1986. 
The report, GIABA disclosed, indicated the magnitude and trends of drug trafficking in Th Gambia.
“In total, about 1270 mg of drugs were seized from the 54 cases reported in 2007. 
“Offences range from possession to trafficking in drugs narcotic substances such as cannabis, cocaine and hashish.”
GIABA pointed to the following financial imtermediation and services which are also vulnerable to money laundering: to wit banking; foreign exchange transactions; trading in money market instruments such as cheques, bills, certificates of deposits, and commercial papers for oneself or for the account of customers; trading in transferable or negotiable instruments; the tourism industry; and the real estate business.
GIABA in its 2010 report also delved into the Anti-Money laundering and Counter Financing of Terrorism (AML/CFT) framework and ongoing efforts in the Gambia. 
It stated that, in order to combat money laundering and the financing of terrorism, The Gambia has developed a legislative and institutional framework through the enactment of the Money Laundering Act 2003, the Anti-Terrorism Act 2002; the Financial Institution Act 2003, and the Drug Control Act 2003. 
The Gambia, it also vouched, has enacted the Anti-Money Laundering Act (ML Act) in 2003 in which only 13 offences were designated as predicate offences for money laundering. 
This, GIABA stated, falls short of the minimum 20 designated categories under the Financial Action Task Force (FATF) Recommendations.
It recalled that The Gambia’s Financial Intelligence Unit (FIU) was established within the Central Bank of The Gambia’s (CBG’s) Financial Supervision Department and is not an independent entity.
That officials have identified staffing and training issues as constraints to the effectiveness of the FIU in its first years of operation.
“The CBG is unable to meet its desired examination schedule because of personnel constraints.
“The CBG circulates lists of terrorists entities designated by the United States Government under Executive Order 13224 among Gambian banks and other financial institutions, including insurance companies.
“ There have been no arrests and/or prosecutions for money laundering or terrorist financing since 2003.  “Only banks and insurance companies are currently subject to MLA requirements.”
The banks, GIABA added, have commences the reporting of suspicious transactions to the FIU.  Their reports were analyzed and where appropriate were forwarded to the police for further investigation.  “Up to 16 STRs were received, of which nine were forwarded for further investigations (the outcome is three prosecutions and two conviction), while other are still under investigation,” the 2010 report says.
Despite these developments, the FIU has neither achieved the desired level of coverage of institutions under its purview, nor gained a deep enough knowledge of ML and TF {terrorism financing} in Gambian society as a whole. 
“As part of its medium-to long-term strategy, the FIU will be expanding coverage of the reporting of STRs to mircofinance institutions, foreign-exchange bureaux and DNFBPs.  “This objective will be further enhanced by the review of the ML Act,” GIABA reported.
It acknowledged also that the Gambian Government has taken steps to prevent its financial system from being misused as a conduit for the transfer and retention of illicit funds, but the various agencies involved in AML activities have not been allocated adequate resources.
It also pointed out that country’s apex bank and the FIU lack the required technical and operational personnel to supervise and monitor financial institutions’compliance with the ML Act. Additionally, the Financial Supervision Department is understaffed and is not likely to function effectively as the FIU since its primary role of supervising financial institutions and non-bank financial institutions for prudential purposes is considered a priority at the moment.
“With 14 staff members, the Department is barely meeting its primary obligation to supervise the FIs effectively.
“The Gambia has ratified 11 of the 13 UN Conventions against Terrorism. The Convention for the Suppression of the Financing of Terrorism is yet to be ratified.
“ The Anti-Terrorism Act 2002 provides for the measures to combat terrorism and for other related matters. Terrorist financing is criminalized under Section 6,11(a) and11 (2)(b), 12,13,14,16,18 and 21 of the Anti-Terrorism Act 2002.” 
The provision of the Act, GIABA noted, extend to both legal and natural persons who are subject to civil and criminal sanctions.
The National Intelligence Agency and the Police are responsible for gathering intelligence on terrorism and terrorist financing, while the Attorney General is responsible for the prosecution of cases of terrorism.
The report went on to say that The Gambia has not experienced any terrorist attack and none has been launched from within the country. 
“However, reports indicate that the country {The Gambia} is vulnerable to terrorism given its location in the Saharan region surrounded by countries that terrorists have used in the past to launch attacks. 
“Its nationals {Gambians} are also vulnerable and cases of attempted funding of certain religious groups and NPOs {Non-Profit Organizations} were reported in the past, but pre-emptive actions taken by the NIA prevented the funds from reaching the beneficiaries.  “The NIA prides itself as being alert and ready to suppress any case of terrorism or terrorist financing.  “ The NIA and the police cooperate with the INTERPOL and other international security agencies in the exchange of intelligence information,” GIABA said of the Gambia.
The report also said it is noticed that The Gambia has demonstrated commitment and made significant progress in its AML/CFT efforts.
Nevertheless, GIABA urged that the Gambia should prioritize the implementation of the recommendations in its Mutual Evaluation Report (MER), especially by building blocks around the core and key recommendations and progressing with all other recommendations that were poorly rated.  On the basis of developments in 2010, GIABA’s priorities for the Gambia towards implementing an effective AML/CFT framework include:
Development of a National AML/CFT Strategy that will drive the entire AML/CFT process;
Follow-up on the finalization of draft AML/CFT legislation;
Capacity building for the FIU in the areas of:
-  Provision of IT infrastructure for analysis financial intelligence
-  Attachment of FIU staff to developed FIUs;
-  Training on Financial Intelligence Analysis;
-  Follow-up on Egmont Group Membership;
-  Training for law enforcement officers on national
    ML/TF Threat Assessment; and
-  A workshop on AML /CFT Compliance Supervision for financial institutions and DNFBPs.

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