Worldwide, GIABA Director says US $700 billion money is laundered

The Inter-Governmental Action Against Money Laundering (GIABA), Director Dr. Abdullahi Shehu at a regional training workshop on Anti-Money Laundering and Combating Financial Terrorism (CFT) Requirements has said that worldwide estimates of the amount of money laundered annually range between US $700 billion and US $1.8 trillion about 5 percent of the world’s Gross Domestic Product (GDP).

At the official opening of a two-day training workshop held at the Kairaba Beach Hotel between the 11-12 September, 2013, Dr. Shehu noted that from the available data, it can be argued that African is a net global creditor because illicit financial flows from the continent over the 30 years period 1980-2009 grew much faster than it attracted net-recorded transfers, while the net drain is about four times its total external debt.

According to him, a study by Kar and Freitas, (2012: page 9) revealed that developing countries lost between US $585.9 billion and US $918.6 billion annually over a ten years period from 2001 to 2010. In another study by the African Development Bank (AfDB) and the Global Financial Integrity (GFI) all revealed that Africa leads the rest of the developing world, having lost between US $1.2 to 1.4 trillion over the 30 years period 1980 to 2009 through illicit financial flows (AfDB & GFI 2013: page23)  .

He added that studies on illicit financial flow from Africa confirm that West Africa and Central Africa lead the other regions of the continent in the outflow of illicit capital saying that with Nigeria, Congo and Cote d’ Ivoire in that order, on top of the list- and this calls for closer attention on the region.

GIABA Director explained that money laundering is a derivate crime and it is often fuelled and facilitated by micro-criminality, including racketeering, drug trafficking and smuggling, fraud and corruption.

“As you are all aware, we have our own challenges with these predicate offences in this region, thus, necessitating concerted efforts to deal with these problems. “No one should be in doubt that accountants have a critical role to play in the prevention and control of money laundering.”

According to him,

Governor, Central Bank of The Gambia, Honorable Amadou Colley commend GIABA for organising such an important workshop saying that it will to a great extent, help build capacities of accountants in combating money laundering, terrorism financing and other related economic and financial crimes.

Governor Colley said told his audience that money laundering is simply the process of making the proceeds of crime to appear to have legitimate origin.

He continues the proceeds or wealth to be laundered can be generated from a number of criminal acts. In the past, money laundering was mainly associated with trafficking in drugs. Today, the designated categories of offences are numerous and include, among others, sexual exploitation, trafficking in human beings, corruption and bribery, fraud, currency counterfeiting, and most recently tax evasion. 

“Money laundering has proven to be a menace to the world, and the efforts required in the prevention, detection and prosecution are enormous. This is so mainly because of the sophisticated techniques used by criminals to launder money. Money Laundering could have devastating effects on national economies. While this menace can occur in any country, it could have serious economic and social consequences particularly for developing countries. This is so because developing economies tend to be small and, therefore, more susceptible to disruption from criminal influences. “

He pointed out that a number of professions are inadvertently linked to the risk posed by money laundering and terrorism financing. Prominent among these are accountants, lawyers, dealers in precious stones and metals, etc.

The new Financial Action Task Force (FAFT) Recommendations, specifically Recommendations 22 and 23 obligate on professionals such as accountants, to prevent and control money laundering and terrorism financing when they carry out certain specified activities for their clients.

“Permit me to dilate briefly on the possible exposure of accountants to money laundering; which could occur through the professional representation of a criminal and assisting them prepare what may seem to be genuine financial statements. Such professions are considered gatekeepers in that they provide the first opportunity for a criminal to complete the process of transforming illicit proceeds of crimes to look legitimate. Accounts prepared in a particular way could also facilitate tax evasion and other predicate offences, said CBG Governor.

On the country’s AML/CFT efforts, Governor Colley said various interventions has been taken by government of The Gambia towards combating money laundering, terrorism financing and other financial crimes saying that The Gambia has made significant efforts at beefing up its machinery to combat the social evils of money laundering and terrorism financing.

In particular, the Anti-Money Laundering and Combating of Financial Terrorism Act was enacted in 2012. This was to address the shortcomings identified in the Money Laundering Act 2003 and the Anti-Terrorism Act 2002 based on the Mutual Evaluation (on-site visit) conducted on The Gambia in 2008.  This paved the way for the inauguration of the Financial Investigation Unit (FIU) Board in February 2013. 

He disclosed that plans are now at an advanced stage for the full independence of the FIU as soon as the newly appointed Director of the FIU resumes duty.

Despite these positive developments, Governor CBG said the AML/CFT regime is still grappling with some challenges some of which are: the need to prepare a national AML/CFT strategy, with GIABA’s assistance; and the limited coverage of reporting entities. However, as daunting as these challenges are, we are optimistic that they will be resolved to fast track the realization of the overall objective of reducing crimes of money laundering and terrorism financing to its barest minimum. Mr. Essa Drammeh GIABA National Correspondent in The Gambia also spoke at the training workshop.