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Cablegate: Nigeria: Update On Fatf Money Laundering Review

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ABUJA 002598

SIPDIS


E.O. 12958: N/A
TAGS: KCRM EFIN SNAR PGOV PREL NI
SUBJECT: NIGERIA: UPDATE ON FATF MONEY LAUNDERING REVIEW

REF: ABUJA 12345


1.(SBU) Since Ambassador Jeter's August 29 meetings with
President Obasanjo and Presidential Advisors Stephen Oronsaye
and Obi Ezekwesili, the Government of Nigeria has moved
quickly in an attempt to repair its bad reputation with the
Financial Action Task Force.


2.(SBU) On August 30 President Obasanjo wrote to FATF
President Sanio, detailing a number of steps to be taken in
to coming weeks, including new Central Bank of Nigeria (CBN)
guidelines for reporting by financial institutions and a
planned visit to the FATF's Africa and Middle East Review
Group (AMERG) in Rome in mid-September.


3.(SBU) On August 31, President Obasanjo sent letters to the
President of the Senate and the Speaker of the House of
Representatives, depicting the dire situation Nigeria is in
vis-a-vis the FATF and urging the legislature to enact the
draft Financial Crimes Commission bill introduced in November
2001.


4.(SBU) During a September 4 conversation with the
President's Principal Secretary, Stephen Oronsaye, the
Ambassador warned that the GON might need to explain to the
FATF's AMERG in writing and in advance of any face-to-face
meeting in Rome, tangible steps the GON has taken or will
take imminently to address the FATF concerns on Nigeria's lax
money laundering controls. Without such advance notice of
tangible progress, the AMERG may turn down a GON request to
meet in Rome in mid-September, Jeter noted. Oronsaye took
this on-board and promised to provide a document to the AMERG
Chairman in the coming days. RNLEO delivered the same
message to the Attorney General on September 5.


5.(SBU) The Presidency held an inter-agency meeting at the
Villa the morning of September 5 to produce a strategy for
resolving the FATF crisis. It was agreed that Attorney
General Kanu Agabi would lead a delegation to Rome in
mid-September, after the Central Bank issues new "circulars"
or regulations tightening reporting requirements on Nigeria's
banks as well as increasing the threat of penalties for
failure to abide by these circulars and existing regulations.


6.(U) The front page of the September 6 "Punch" (major
English-language daily) carried the following article under
the headline, "FG Expresses concern over Financial Crimes:"


Begin text.


President Olusegun Obasanjo has expressed concern over the
absence of a commission to handle matters related to
anti-terrorism, economic and financial crimes in the country.


In separate letters to the Senate President Anyim Pius Anyim
and the Speaker of the House of Representatives, Alhaji Ghali
Umar Na'Abba, dated August 31, Obasanjo reminded the
legislators that the Paris-based Financial Action Task Force
(FATF), has threatened to blacklist financial institutions in
Nigeria by October if nothing was done about financial crimes.


He therefore urged the National Assembly to urgently pass a
bill for the establishment of a commission on anti-terrorism,
economic and financial crimes, in the country. The bill was
sent to the Assembly last November.


The president warned that the country's international trade
and business standing would come to harm if the FATF threat
was carried out.


The letter reads: "The president of the FATF has indicated
that during its Plenary on 19-21 June 2002, a decision was
taken to apply counter-measures against Nigeria with effect
from 31 October 2002 unless we begin substantive
communications with the FATF and also take significant steps
to address identified deficiencies.


"He further indicated that a discussion of the Nigerian
situation will be given priority during the Group's Plenary
scheduled for 9-11 October 2002, expressing the hope that
Nigeria would have to take substantive measures to address
the observed deficiencies and thus avoid the planned
counter-measures.


"I understand that the planned measures, if taken, would
render difficult any financial flows to or out of Nigeria
thereby putting our international trade and business
transactions at risk.


"It is for this reason that I urge you and the distinguished
Senators to give priority consideration to the
Anti-Terrorism, Economic and Financial Crimes Commission Bill
which I had earlier transmitted to you."
Obasanjo said that the threat by the FATF is worsened by the
fact that for a long time, Nigeria did not engage the
organisation in a dialogue on what was being done to
strengthen existing legislation or, where necessary, to enact
new ones to combat financial crimes and related crimes.
Last week, the Central Bank of Nigeria (CBN) said that
Nigeria was on the list of countries considered by FATF as
not co-operating in the global war against terrorism,
financial and economic crimes.


"The FATF is used to pressurising various governments to
ensure that money laundered do not find their way through
banks. The international body has classified Nigeria as a
non-cooperating country. The body has given Nigeria till
October to correct this problem or else we would be in
serious problem," the CBN said.


It warned against opening anonymous accounts for customers.
"We want the FATF to delist the country from the list of
uncooperating countries. The banks have to adhere to the
rules guiding money transfer," the apex bank stated.


End Text.


7.(SBU) Comment: The President and his staff "get it" -- the
threat of counter-measures from FATF members is very real and
serious -- and they have responded with alacrity. Yet months
of neglect are hard to repair in days and the GON will face a
tough sell of its defense in Rome, if such a meeting occurs.
From our contacts with the President, his immediate staff,
the Attorney General and the Central Bank, we detect a
sincere and unprecedented, although belated, commitment to
setting this situation right.
JETER

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