US embassy cable - 04LAGOS2528

UNCLAS LAGOS 002528 
 
SIPDIS 
 
STATE FOR INL 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS, AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: SNAR, NI, KCRM, KTFN 
SUBJECT: 2004-2005 INTERNATIONAL NARCOTICS CONTROL 
STRATEGY REPORT (INCSR), MONEY LAUNDERING AND 
FINANCIAL CRIMES. 
 
REF: STATE 254401 
 
Nigeria is still the most populous country in Africa. 
It has a large economy that has been mismanaged over 
the past years and as a result poverty is prevailing. 
The economy is growing but not at the pace to cater 
for the high unemployment. Because of the economic 
problems faced by the society, Nigerians have resorted 
to crimes such as trafficking of persons, narcotics 
and financial fraud commonly known as 419. Efforts 
have been made by the government to put an end to 
these crimes but the socio-economic conditions have 
not been conducive to the measures put in place. "Four- 
One-Nine" otherwise known as Advance fee fraud is the 
most practiced form of financial crimes in Nigeria. In 
2001, Nigeria was placed on the list of non- 
cooperative countries and territories in combating 
money laundering. It has not been proved that money 
laundering in Nigeria is related to narcotic proceeds 
or that the proceeds from money laundering are 
controlled by local drug-trafficking organizations. 
Most of the transactions leading to money laundering 
is done through commercial banks and this is why the 
EFCC is now mandated to regularly inspect bank 
transactions. 
Government law, policy and practice discourage money 
laundering. This is seen from the laws enacted since 
2002 and the institutions put in place to combat it. 
Money laundering is a criminal offence in Nigeria 
under the Money Laundering (Prohibition) Act, 2004. 
This law also covers drug-related money laundering. 
 
The economic and Financial Crimes Commission (EFCC) 
was created in 2002 and has actually been in operation 
since April 2003. In 2004, EFCC has recorded 
remarkable success in the area of money laundering. 
Notorious Advance Fee Fraud Kingpins (419) have been 
arrested and are currently being prosecuted by the 
EFCC. These include a group that was involved in the 
renowned Brazilian Bank scam involving $242 million. 
Their assets worth about $300 million have also been 
seized. 
 
In 2004, the commission has been involved in the 
prosecution of more than 100 high profile financial 
crime cases in the Nigerian High Courts. These cases 
involve Pipeline vandalization, tax evasion, bank 
frauds and money laundering. For the first time in the 
history of the country, a sitting Governor is being 
tried for corruption and money laundering. Several 
Nigerians have also been charged with terrorism. There 
are several money laundering cases being tried in the 
high court. In 2004 a conviction was secured in the 
High court in Kaduna 
 
In 2004, the Commission established the Financial 
Intelligence Unit (FIU) as a pilot scheme. FIU is now 
receiving and analyzing Suspicious Transaction reports 
(STRs) and Currency Transaction Reports (CTRs). This 
helps the Unit to monitor money trail and typologies 
for money laundering. EFCC shares these reports with 
other Law Enforcement Agencies locally and 
internationally. 
 
 However, in 2004, a lot of efforts were made. NDLEA 
intensified bank inspection operations. Also, Nigeria 
initiated and tirelessly followed up the establishment 
of a permanent secretariat for the Intergovernmental 
Action Task Force Against Money Laundering in West 
Africa (GIABA). As a result of these efforts, Nigeria 
has been removed from the list of non-cooperative 
countries. 
 
Nigeria is party to the 1988 UN Drug Convention 
against Transinational organized Crime. Nigeria is 
also a signatory to the UN Convention Against 
Corruption. 
 
The Government of Nigeria continues to ensure that 
money laundering and other financial crime are reduced 
in Nigeria. EFCC and ICPC are doing a great job in the 
area. The laws are in place and if the constitution is 
amended to provide for the prosecution of sitting 
Governors for corruption, it will be a great 
achievement in the war against money laundering. 
BROWNE