From Uche Usim, Abuja
former Chairman of the Economic and Financial Crimes Commission (EFCC), Mallam Nuhu Ribadu, has described the foundation and configuration of the Nigerian banking system as one that is susceptible to abuse by corrupt minds.
Ribadu made the assertion yesterday in Abuja, at the launch of a book titled, ‘Improving Anti-money Laundering Compliance: Self-protecting Theory and Money Laundering Reporting Officers’, written by Dr. Abdullahin Usman Bello.
According to the former anti-corruption czar, the country needs to strengthen internal operational mechanisms as investigations reveal that almost all corruption cases involved banks.
“Investigations reveal every now and then that, almost no case of corruption occur without the involvement of banks and bankers”, he said emphatically.
Ribadu said: “there are many avenues through which such abuses happen. Some individuals use the convenience of the areas that are subject to abuse as private banking offered by commercial banks for money laundering. Some others also use the anonymity offered by electronic banking to conceal suspicious transactions. Yet, some others use cash intensive customers, who are into legitimate businesses as fronts or conduits for money laundering”, he explained.
As a panacea to the ugly development, Ribadu said getting the banks and operators to have an introspective look at some of their actions was a sure way to start the cleaning.
“They should resolve to put a stop to it both in public and corporate interest, as well as the individual’s interest.
Risk management is very essential. Banks should identify the risk of money laundering in relation to products, services and customers and assess such risks at every stage.
“Going forward, the risks should also be managed whether high, medium or low-risk profiling through reporting, due diligence and monitoring, he explained.
The former EFCC Chairman said there should also be thorough profiling of customers and manual and automated checks when onboarding new customers or reviewing existing customers, to checkmate abuse and potential risks.
“As leadership is the first step in getting it right especially on matters of reforms and integrity, the board and senior management of financial institutions have a huge responsibility in ensuring strict compliance to Anti-Money Laundering (AML) regimes.
“When it is the board or management staff that bend rules to approve suspicious deals or warehouse illicit funds, the rest of the staff are only being shown how to behave. The top has to therefore be firm for the rest to fall in line” he said.
Board and management Ribadu said “need to cooperate with law enforcement agencies and regulators, not only by the word of mouth but in letter and spirit. There has to be genuine commitment to the fight against money laundering at the highest decision-making body of financial institutions. Those in charge of decision at that level need to look at the wider picture, beyond business and profit.
“The institutions should also ensure that they have adequate systems, both manual and automated, for identifying and reporting suspicious activities.”
He explained that financial institutions are mandated to monitor and assess transactions to determine whether they are suspicious- based on a thorough risk assessment. “Such suspicious activities can be identified through unusual transactions – inconsistency, value, location of a customer.”
Once transactions are deemed suspicious, the institution Ribadu said “has a duty to report such deals National Fraud Intelligence Unit (NFIU)- the NFIU will then disseminate intelligence to law enforcement agencies.
Attaining such compliance efficiency, he said, means that the Financial Institutions should have adequate and appropriate internal control systems, in the first place. In this age of IT developments, Financial Institutions should have management information system that would assist in assessing and reporting suspicious activities.
Earlier, the Chairman of the occasion and Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele said there was need for the government and institutions around the world to take the issue of flow of capital and funds seriously.
Dirty money he said, were proceeds of crime, adding that it was time for governments to take serious action.
“Proceeds of crime destroy the fabric of the society and country. Leaders must do everything possible to combat crime and corruption particularly money laundering.
The banks and CBN he said, “have done their best to support anti-money laundering and will continue to put in place policies that will combat money laundering.”
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