The Inter-Governmental Action Group Against Money Laundering (GIABA) has absolved The Gambia from the vicious circle of money laundering that has gripped many countries in the sub-region, saying the Western Africa nation is not a known money laundering (ML) hub in the region.
GIABA – the ECOWAS created money-action group -- releases its 2010 annual report, where it stated that the country “Is not a known ML hub in the region”.
“It is unknown to what extent ML is related to narcotics proceeds,” the report highlights, but cautions that the influx of foreign banks and the increased in number of national financial institutions in the country is a cause for alarm.
“The increasing number of local and foreign banks in The Gambia has raised some questions as to whether they may not be providing additional risk if regulation is not enhanced.”
The Gambia is not a regional financial centre, although it is a regional re-export centre. Goods and capital are freely and legally traded in the country and as the case in other re-export centres, smuggling of goods occurs; and the lack of wherewithal hinders law enforcement’s ability to combat possible smuggling, even though there is the political commitment to do so, the report explains.
However, the report does not exempt The Gambia from those countries it listed as susceptible to crimes derived from money laundering and it vices. “The Gambia is vulnerable to the activities of organized crime and drug trafficking,” it states, citing the 2007 Annual Report of the Gambia Drug Control Agency, which highlights about 1270 mg of drugs that were seized from the 54 cases reported in 2007.
However, in The Gambia, proceeds of crime are mainly derived from drug trafficking, bribery and corruption, the tourism industry, foreign exchange transactions, and other related acquisitive crimes, the report highlights.
It further states that the magnitude in which these misdemeanors are committed remains difficult to determine.
“The porous borders, weak controls, prevailing poverty, dominance of cash transactions, poor Know Your Customer (KYC) compliance culture, massive inflows of tourists and anecdotal evidence of increasing drug-related and other criminal activities are all factors contributing to an increase in the ML risk environment in the country,” says the GIABA’s report.
Some of the challenges plunging the nation into the vulnerability of money laundering and other related crimes include the lackadaisical implementation of laws criminalizing corruption, and public officials not being subjected to financial disclosure requirements.
In its report, GIABA did not single out the real estates and tourism sectors as well as forex exchange bureaus and other financial agencies in its list of vulnerable institutions.
HOW GAMBIA IS COMBATING MONEY LAUNDERING AND RELATED CRIMES?
When the issue of money laundering, financing terrorism and related crimes is raised in a milieu of discussion, in unrestricted gatherings and academic institutions, questions tend to crop up regarding how and what institutional apparatuses Gambia have in place to combat this nuisance, as there is no specific government agency responsible for pulverizing down corruption.
Unlike Nigeria, -- where the Economic and Financial Crime Commission (EFCC) – has been netting perpetrators and suspected plutocrats in jails; and confiscating suspected assets to the state’s benefit --, The Gambia does not create a specific bureau to nap suspects of such, but established a Financial Intelligence Unit (FIU) within the Central Bank Financial Supervision Department to probe into potential cases of such nature.
However, GIABA observes that this unit “Is not an independent entity”, and initially went on to observe some deficiencies in the capability of this unit: such as deficient capacity building and the inability of the Central Bank to “meet its desired examination scheduled because of personnel constraints”.
Nevertheless, with all these cavities, the country has developed a legislative and institutional framework through the enactment of the Money Laundering Act 2003. The Act states that ML is a “criminal offense” and establishes the following as “predicate offenses”: narcotics trafficking as well as blackmail, counterfeiting, extortion, false accounting, forgery, fraud, illegal deposit taking, robbery, terrorism, theft, and insider trading.
Henceforth, the “Act requires banks and other financial institutions to know, record and report the identity of clients engaging in significant and/or suspicious transactions,” whilst also requiring banks to maintain records for at least six years.
Like Nigeria in this case, the current reporting threshold for cash transactions is US$10, 000. Thus, any amount greater than this in enormity is subjected to scrutiny by the responsible authorities. The Act further empowers the government to identify and freeze assets of a person suspected of committing the act.
“The Customs Department is tasked with investigating when sums of money exceeding US$10, 000 are brought into the country. However, Customs officials have not been properly trained,” the report, reveals.
The report, in amplification to why the country is free from the scourge of ML and terrorist financing, yet vulnerable to it, stated that there has not been documentation of ML over the past eight years.
“The Central Bank circulates lists of terrorists and terrorist entities designated by the US government under Executive Order 13224 among Gambian banks and other financial institutions, including insurance companies. There have been no arrests and/or prosecutions for money laundering or terrorist financing since 2003. Only banks and insurance companies are currently subject to MLA requirements.”
In recognising the importance government attaches to preventing its financial system from being misused as a conduit for the transfer and retention of illicit funds, GIABA urges that building the capacities of anti-money laundering agencies and providing the possible wherewithal could not be off the hook.
Despite weathering so many storms in the financial sector, the Central Bank and its financial unit have been branded by GIABA as “Lacking the required technical and operational personnel to supervise financial institutions’ compliance with the ML Act,” which is another deficit for combatants of ML.
It continues: “The financial supervision department [at the Central Bank] is understaffed and is not likely to function effectively as the FIU [Financial Intelligence Unit] since its primary role of supervising financial institutions and non-banking financial institutions [in the country] for prudential purposes is consider a priority at the moment.
“With 14 staff members, the Department is barely meeting its primary obligation to supervise the financial institutions effectively.”
In its unwavering effort to create a buzzer zone of harmony, The Gambia further went on to ratify 11 of the 13 UN Conventions against Terrorism. However, the Convention for the Suppression of Financing of Terrorism is yet to be ratified. The Anti-Terrorism Act 2002 provides for the measures to combat terrorism and for other related matters.
Terrorist financing is criminalised under Sections 6, 11(a) and 11(2) (b), 12, 13, 14, 16, 18, and 21 of the Anti-Terrorism Act 2002. The National Intelligence Agency (NIA) and the police are responsible for gathering intelligence on terrorism and terrorist financing, while the Attorney General is accountable for the prosecution of reported cases.
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