The Role of Inter-governmental Action Group Against Money Laundering and Terrorist Financing in West Africa (Giaba) in Combating Money Laundering and Terrorist Financing Under the Ecowas Community

The Role of Inter-governmental Action Group Against Money Laundering and Terrorist Financing in West Africa (Giaba) in Combating Money Laundering and Terrorist Financing Under the Ecowas Community

CHAPTER ONE

Objectives Of Study

The general aim of this study is to analyze the Role of Inter-Governmental Action Group against Money Laundering and Terrorist Financing in West African (GIABA). The study seeks to achieve the following intermediate objectives, thus:

To examine how far and successful has GIABA achieved its mandate of combating Money Laundering and Terrorist financing in West
To analyze the problems and Challenges being encountered by GIABA in the discharge of its
To make some findings and offer suggestions on the best ways to enhance the discharge of GIABA‘s
To serve as a future reference material for lawyers, scholars and law students who may be interested in the further research of the subject matter of study.

CHAPTER TWO

DEFINITION OF ML/TF, EVOLUTION AND DEVELOPMENT OF GIABA

Introduction

The aim and objectives of this chapter is to discuss briefly the evolution of GIABA, it main organs and also the overview of the anti-money laundering and counter financing of terrorism situation in West Africa.

GIABA is in French Acronym Groupe Intergovernmental d’ Action contre Ie Blanchiment d’ Argent en Afrique de I’ Ouest (The Inter- Governmental Action Group Against Money Laundering in West Africa) which is a specialized institution of the Economic Community of West Africa States (ECOWAS), as well as a Financial Action Task Force Style of Regional Body (FSRB) with its headquarters in Dakar Republic of Senegal. Its mandate is to develop anti-money laundering and counter terrorism financing (AML/CTF) measures, and to coordinate regional efforts to combat money laundering (ML) and terrorist financing (TF)³⁹. Its membership consists of all member states of the ECOWAS⁴⁰. As such it is a regional intergovernmental body which supports the work of the United Nations (UN) in preventing, detecting, deterring and suppressing terrorism, particularly its financing.

The Financial Action Task-Force (FATF) was set up in 1989 in the capital of France, Paris by the G7 and in the subsequent year,⁴² the organization came up with 40 recommendations on money laundering and then another additional 9 special recommendations were developed against the financing of terrorism. These recommendations, the FATF 40 + 9 recommendations, depends on some areas or heading which include the areas of prevention and control of money laundering in the area of financing of proliferation of weapon of mass destruction. The United Nation Security Council Resolution (UNSCR) 1373, which was adopted on the 28^th September, 2001, subsequent to the September 11, 2001 terrorist attacks on the United States of America provoked global efforts to address international terrorism especially by placing barriers on movement, organization and funding of terrorist groups.⁴³ The West African Region in an effort to compliment the Financial Action Task-Force and the United Nation Security Council Resolution 2001 in combating money laundering and terrorism financing in the West African Region GIABA was created, with specific mandate.

CHAPTER THREE

THE LEGAL AND INSTITUTIONAL FRAMEWORK FOR COMBATING MONEY LAUNDERING AND TERRORISM FINANCING

Introduction

This chapter will briefly discuss the legal and Institutional framework for combating money laundering and terrorism financing and how their applications assist GIABA in performing it mandate. These institutions include the Financial Action Task Force (FATF), its recommendations and standard; the 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the United Nations Convention against Transnational Organized Crime, the United Nations Security Council Resolution (UN SCR) 1373, of 2001; ECOWAS Criminal Intelligence and Investigation Bureau and finally the ECOWAS Committee Court of Justice.

The aims of this chapter as earlier stated is to discuss briefly the legal and institutional framework for combating on money laundering and financing of terrorism and how their application relate to GIABA in discharging its mandate. Although, the analysis is not exhaustive nonetheless it will provide synopsis on the subject matter under consideration.

FATF Recommendation/Standard

The Financial Action Task Force in Money Laundering (FATF) was set up in Paris by the G-7 group of nations (now effectively the G-20) and as at April 2011 was made up of 34 countries and territories, plus 2 regional organisations with 8 associates and 21 regional organisation with 8 associates and 21 observers. This is in response to the mounting international concern against money laundering, FATF is an inter-governmental body whose purpose is the development and promotion of policies. It also works with a number of other international and regional bodies involved in combating money laundering and terrorist financing. The body came up with 40 Recommendations which essentially are measures which the task force has agreed to implement and which all countries are encouraged to adopt. It was in 1990 that the recommendations were originally drawn up, but were revised in 1996. It was further revised in 2003 to provide a comprehensive strategy against money laundering. Also the effect of the 9/11 attack in the United States of America (USA) and the increased relationship between terrorist financing and money laundering led to the development of an additional 9 special recommendations.

CHAPTER FOUR

The Role of GIABA in Combating Money Laundering and Terrorism

Financing

Introduction

Money laundering is a global epidemic and can have a coercive effect on a country’s economy, government and social need of its citizens. The International Monetary Fund stated in 1996 that the aggregated size of money laundering in the world is approximately between 2 – 5% of the world‘s Domestic Gross National Product²⁸³.

Technological advancement such as internet has facilitated exchange of money and information and new form of property to sabotage. Organised crime and terrorists used money laundering techniques to filter monies generated from illegal activities into the legal one. To change the origin of the funds, the filtering of these illegal funds can led to the distortion of business decision, increases the risk of business failures, takes control of economic policy away from government, harm country’s reputation and exposes the nations people to drug trafficking, smuggling and other criminal activity.

The aim and objective under this chapter is to discuss to what extend GIABA perform it mandate in protecting the economies of the member state against abuse and misuse for the purposes of laundering the proceeds of crime and also financing of terrorist. Below are the GIABA Technical Assistances and Necessary Majors to member states.

Technical Assistance

GIABA was established as a result of the response to the unique problems and challenges of the West African Region. The Mandate of GIABA is unique, unlike other FATF Styled Regional Bodies (FSRBs) it has role to provide technical Assistance to member states to build institutions and capacity against money laundering and terrorist financing.

The menace of money laundering and terrorism financing increases with globalization, criminals are also becoming adaptable, taking advantage of the weak links that create opportunities for them to commit crime with relative impurity.

CHAPTER FIVE

SUMMARY, CONCLUSION, FINDINGS AND RECOMMENDATIONS

Summary

This work, as earlier stated is divided into five chapters, commencing with an introduction through the evolution and organs of the inter-Governmental Action Group against Money Laundering and Terrorism Financing in West Africa (GIABA); the legal framework and international organisation on Anti-Money laundering and counter financing of Terrorism related to GIABA; the role GIABA play in combating money laundering and Terrorist financing and now the conclusion.

The Chapter one in brief is the introductory chapter which discussed the background meaning of the money laundering and terrorist financing, how money laundering and terrorist financing become a problem in West Africa. In which the proceed of crime general corruption in turn facilitates the commission of crimes and undermines the rule of law and as a result of inadequate rule of law undermine the development in West Africa.

Chapter two also discussed the evolution, development of GIABA and the conceptual definition of Money Laundering and Terrorist Financing. The chapter also made an overview of the AML/CFT situation in West Africa which revealed that the region is lacking behind, although all West Africa member state have promulgated laws criminalizing money laundering, but some of the laws require improvement to conform to acceptable international standards while on the counter-financing of Terrorism law, even with the effort of GIABA within the region in the fight against the two menaces, yet some GIABA members have not enacted laws Criminalizing financing of Terrorism.

The chapter three discussed the legal and institutional frame work for Combating Money Laundering and Terrorism Financing. The discussion revealed that the legal and the institutional framework have made positive impact on the regional Anti-money laundering and terrorism financing, more especially the financial action task force (FATF) and United Nations Security Council Resolution (UNSCR) 1373. On the other hand the ECOWAS Intelligence and Investigation Bureau, which is an ECOWAS specialized Institution responsible for facilitating criminal investigation, establishing data bank on criminals, collection of information from institutions related crimes and trans-national organized crimes amongst others while the Community Court of Justice is also an organ of ECOWAS saddle with responsibility for judicial proceedings on matters within the ECOWAS Revised Treaty, protocols and conventions.

Chapter four discussed the Role of GIABA in Combating Money Laundering and Terrorism Financing which is the mandate of GIABA. Among the GIABA mandate inter alia is to perform Technical Assistance to member state including establishment of FIU’s. The research revealed that the estab1ishiment of FIU’s is the primary responsibility of member state, nevertheless, GIABA played a crucial and supportive role in establishing 13 FIU‘s that are operating in various stages of development. The only 2 countries that have not established FIUs are Guinea and Liberia. While Guinea due to their circumstances of instability for the past few years that of Liberia due certain reforms they are carry out in order to enact law.

The research also reveals that the pre-dominant cash-based nature of the economies of the West Africa coupled with the ease that individuals can acquire properties in the regions without abiding by the FATF Recommendation on Customer due diligence (CDD), investigations, record keeping and monitoring of the transaction makes the real estate sector extremely vulnerable to money laundering and financing of terrorist within the region.

The establishment of GIABA although a welcome development on the fight against the two menaces, money laundering and Terrorist financing, never-the-less GIABA is facing with numerous challenges which are both institutional normative. These challenges include the institutional framework that established GIABA which only gave power to advice and personnel to the member state to perform some duties not coercive power. Although the power of sanction given to GIABA under Article 6 is not satisfactory, more powers need to be put in place. Also lack of adequate staff manpower and skills, inadequate funding and resources, lack of knowledge and understanding of GIABA, Money Laundering and Terrorist financing by citizenry of the West African member state also affects GIABA success. All these among others hindered performance of GIABA in the fight against money laundering and Terrorist financing within the region.

Findings

From the above discourse the following findings were made;

That GIABA is a specialized institution of the Economic Community of West African States (ECOWAS) as well as a Financial Action task force (FATF) Style Regional Body (FARB). But members state ECOWAS are not represented in
That GIABA is not a law enforcement institution, even though it is charged with the onerous responsibility of coordinating regional efforts around law enforcement problem.
That most GIABA member states are lacking behind in either establishing financial intelligent units or established but not having operational or functional financial intelligent
GIABA member states do not have laws which adequately criminalise terrorist financing. Even where such laws exist, it was observed that there was little or no regulation or procedure in place to ensure appropriatefreezing, seizure and confiscation of terrorist funds.
Also, most of the GIABA member states has no mechanism for designation of person identified as terrorist, delisting or even disseminating updated list of terrorist to financial and non financial
It was observed that of the West African countries are still operating in isolation and this will naturally affect the overall implementation of AML/CFT
It was also observed that West African region have the poorest borders that is why it faced with a major challenge in its vulnerability to transnational organized crime.
It is also observed that those within the corridor of power in West Africa have access to Money and see Money Laundering as of right and their attitude constitute a major threat and Courses most of the money laundering cases reported in recent
GIABA is also facing with both institutional and legal problems, more especially as it mandate, it was only given power to advice a member states.

Recommendations

The following are some of the area which the study has recommended be re- visited for GIABA to realize its mandate.

FATF is not a political organization but it is an inter-governmental body whose purpose is to develop and promote policies to combat money laundering and terrorist financing, and GIABA being it‘s Style Regional Body in West Africa; it would be fair to consider at least one potential country in West Africa for FATF membership for the country to be representing West Africa in all FATF activities, otherwise GIABA should amend its Article 2(C) of the 2006 Statutes to withdraw as the Financial Action Task Force Style Regional Body and also stop promoting the adoption of the FATF norms and values more especially FATF 40+9
GIABA Statute, 2006 needs to be amended more especially Article 2(b) to provide it with an organ like police or law enforcement agency in performing it day-to-day activities under it mandate.
Articles 12 and 6 of the GIABA Statute 2006 shall be amended to make it mandatory for each member states to have functional and operational Financial Intelligent Units or else the defaulting member state should face severe sanction from GIABA.
Although, asset recovery is complicated process, but GIABA within its statute has technical assistance mandate to provide direct assistance to strengthen the capacity of its members to ensure that criminal assets are

Identified from without delay, seized and confiscated within the ambits of law,

The writer further recommend that GIABA will continue with the task of supporting member states with adopting, improving and implementry legislation concerning identification of persons as terrorist and member states on the other hand would complement GlABA’s effort by having a comprehensive list for person designated as terrorist with update after every 3 months and also by designating dedicated counter-terrorism units and personal within the law
There is a need for Article 2(a) of the GIABA Statute, 2006 to be amended to make it mandatory for each member state to have cooperation, understand and coordination with other member states which will include constructive dialogue and Information between
That each and every member states should try as much as possible to strengthen it border, and so at the regional level, there is a need to balance the free movement of people, good, and services across the region in accordance with the ECOWAS Trade Liberation scheme as part of the ECOWAS integration programme, and the struggle against transnational organized
GIABA Statute, 2006 shall be amended to give it power of investigation of any citizen of a member state be it in private or public sector, who happen to have excessive wealth.
GIABA Statute, 2006 need to be amended to provide it with coercive and supervisory powers on GIABA member states on cases of money laundering and Terrorist

REFERENCES

Abdullah Y.S. (2006), “Economic and Financial Crimes in Nigeria”. Citing the different between “Money movement facilities” and money laundering.
Alexander. J.; Canton. D. and Wikinson, P. (1979) Terrorism: Theory and Practice, West view press, Boulder, Calorado, P.99
Alexandra K. (2009) Money Laundering in West Africa: An Analysis, University of Toronto. Black’s Law Dictionary (9^I]| Edition).
Bouthol (1975) Definition on Terrorism in CAKTON and SCHAERF (eds): International Terrorism and World Security p.50,
Claire T. and Edwin S. (2003), International Criminal Law and Human Right, Sweet and Maxwell, London P. 250.
Momodu B, (2003), Law and Practice of Criminal Investigation and Prosecution in Nigeria. University Press, Ibadan.
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Procter. P., Longman Dictionary of Contemporary English (6^1h Edition). Hopton, D: Money Laundering: A concise Guide, Gower Publishing Ltd. P.53.

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