Friday, August 15, 2014

Gambia: Progress slow in implementation of money laundering measures

Recent seizures of cocaine and marijuana demonstrate, the country is also one of the routes for drug trafficking in West Africa, GIABA says. (Photo shows cocaine bust, estimated to worth $1 billion, June 2010, Banjul)

Progress in the implementation of Anti-Money Laundering and Counter-financing Terrorism, AML/CFT, measures in The Gambia has been slow, according to a new report published by a West African agency that monitors and works to prevent the twin crimes.

The Gambia also lacks the capacity to monitor the full stretch of its borders, according to the 2013 Annual Report of the Inter-Governmental Action Group Against Money Laundering in West Africa, GIABA.

The report, released in August 2014, stated that smuggling is therefore prevalent, though the country’s customs collaborate with Senegalese counterparts to address the problem.

“As recent seizures of cocaine and marijuana demonstrate, the country is also one of the routes for drug trafficking in West Africa,” the report indicated.

It noted that the high concentration of commercial banks in The Gambia is generally considered as disproportionate to the country’s economy – while tourism-related human trafficking is a thriving underground business in the West African country.

“It is also a source, transit and destination country for women and children subjected to forced labour and sex exploitation,” it added.

Serious challenge

The US State Department's 'Trafficking in Persons Report 2013' reveals that the booming sex tourism industry propels the recruitment of young, sometimes under-aged, girls from nearly all ECOWAS member States by traffickers to meet the demands of European child-sex tourists.

GIABA's report stated that cross-border movement of cash is a serious challenge due to the economic activities of nationals from other countries.

The anti-money laundering agency said The Gambia has become very attractive for such transactions because of its more liberal policies compared to neighbouring Senegal's strict monitoring of foreign exchange transfers.

GIABA said the most prevalent predicate crimes in the country in 2013 were drug trafficking, corruption, tax fraud, bank fraud and fraud in other investments.

It quoted a Country Report provided by The Gambia, which states that “the proceeds of these crimes are typically laundered through the real estate, cross-border cash movements, banks and DNFBPs [Designated Non-Financial Business and Profession].”

Two years ago, The Gambia enacted a new AML/CFT law, reactivated the Inter-Ministerial Committee and appointed a Director for its financial intelligence unit, the FIU. GIABA said these measures have helped to address some of the deficiencies in the country’s AML/CFT regime.

However, it added that the seventh follow-up report of the country, submitted in November 2013, shows that it has not addressed a number of the strategic deficiencies in its AML/CFT system.

The most crucial of these deficiencies are the non-criminalisation of the full range of predicate offences, absence of effective laws and procedures for implementing UN Security Council Resolutions 1267 and 1373, and lack of ratification of various instruments on counter-terrorism.

In particular, the country has not ratified the key UN International Convention on the Suppression of the Financing of Terrorism.

Meanwhile, the country has received funding from the African Development Bank to support the implementation of the requirements of the Anti-Money Laundering and Combating of Terrorism Financing Act 2012. 

Previous reports have found similar problems
Weak law enforcement

Last year, the FIU received 20 STRs (Suspicious Transaction Reports), of which 16 are linked to money laundering, according to GIABA, of which 10 cases were forwarded to the law enforcement agencies for investigation.

In one of the cases involving suspected ML-related drug trafficking worth US$500,000, investigations showed that the funds were genuine.

But in another case involving illegal gold mining and smuggling worth US$400,000, the Netherlands Government has sought mutual legal assistance to recover illicit funds in a commercial bank in The Gambia.

“While the status of the other investigations is not known, however, and there has been neither prosecution nor conviction,” GIABA lamented. “The low level of reporting and the lack of prosecution and conviction in the face of real ML/TF threats are matters of concern.”

It said the main obstacles to implementation of AML/CFT measures in the country are “weak law enforcement” and the “low capacity” of regulatory authorities.

Strategic deficiencies

At its November 2013 Plenary session, GIABA said The Gambia was called upon to demonstrate greater commitment to the implementation of its AML/CFT measures.

The country was directed to address its AML/CFT “strategic deficiencies” and submit a follow-up report in May 2014, failing which a public statement will be published on the country.

“These serious measures have been taken by the Plenary because of the high risk associated with the country’s low compliance level,” the report revealed.

GIABA said The Gambia needs to mobilize all required resources, including political commitment at the highest level, in order to mitigate the ML/TF risks it faces.

It is also in the interest of the country to address these deficiencies urgently in order to avoid being blacklisted as a country not making sufficient progress to improve its AML/CFT system, GIABA warned.

“The consequences of this action on the country’s economy will be enormous.”

Written by Modou S. Joof


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