Anti-terrorism experts in the Nigerian Financial Intelligence Unit have placed some banks and charities in the country under watch for allegedly aiding the transfer of funds by Boko Haram.
This is just as there are indications that the extremist group has been involved in recruiting suicide bombers from refugee camps run by the Polisario Front in Algeria.
It was learnt that the ease with which terror sponsors had been moving money for terror operations through the banks had also made the job more difficult.
“Being persuasive preachers, the terror commanders often persuade some Muslim Ummah to give Zakat to their jihadist cause. This brings in a lot of money used in terror operations. Security agencies are finding difficult to track this because it leaves no paper trail or bank details,” a source stated.
Saturday PUNCH also learnt that some financial institutions were also being unwittingly used to transfer funds meant for terrorist activities by sponsors and sympathisers of these groups, who move such money in bits to avoid detection.
These banks are said to have ignored the provisions of the law to help customers to transfer money in and out of the country without filing the compulsory suspicious transaction reports where necessary.
Under the Money Laundering (Prohibition) Act, 2011, the Terrorism (Prevention) Act, 2011, Central Bank of Nigeria Anti-Money Laundering/ Combating the Financing of Terrorism Regulation, 2009 (as amended) and other AML/CFT Guidelines, banks and other financial institutions must render suspicious transaction reports to the NFIU, properly identify persons conducting transactions and maintain a paper trail by keeping appropriate records of their financial transactions.
The records will enable law enforcement and regulatory agencies to pursue investigations of criminal, tax and regulatory violations and provide useful evidence in prosecuting money laundering and other financial crimes. The legal provisions were designed to help identify the source, volume and movement of currency and other monetary instruments transported or transmitted into or out of Nigeria, or deposited in financial institutions in the country.
The laws impose criminal liability on a person or financial institution that knowingly assists in the laundering of money or fails to report suspicious transactions conducted through it.
Saturday PUNCH learnt that many financial institutions had neglected to file reports of suspicious transactions with the NFIU, in order not to lose the accounts of high profile clients who move huge funds.
Some of these funds are believed to be proceeds of crime or money laundering, one of the sources said.
“Sometimes, the banks assist their clients to transfer huge amounts in small lodgements to avoid filing a suspicious transaction report as mandated by law; we know all these tricks and we are working to deal with them,” the security official said.
Findings indicated that the terror cells also rely on foreign donations from jihadist organisations in Iran, Lebanon, Libya, Yemen and Saudi Arabia camouflaging as charity groups.
NFIU had also expressed concern over the reluctance of banks to file STR, noting that the insurance industry was more compliant with regard to money laundering and financing of terrorism.
The Director of the unit, Mrs. Juliet Ibekaku, made the observation at the Sensitisation Programme on Anti-Money Laundering and Combat of Financing of Terrorism Control Measures for Insurance Companies, which held in Lagos recently.
The programme was jointly organised by the NFIU and the National Insurance Commission to deepen knowledge on money laundering and combating financing terrorism issues and to make the insurance sector and the companies understand what their roles are in this regard.
“Compared to other sectors, the insurance sector is not that bad, especially when you compare it with the banking sector; even though that we are yet to conduct a risk assessment of whether there is huge money laundering or financing of terrorism risks associated with the insurance sector.
“I will say that the risk is not as high as what we have in the banks. As such, you might not see the level of fraud as we see in the banking sector in the insurance sector.
“What we did at NFIU was to make sure that the banks are reporting first and this we have been doing for the past five years. However, we have realised that there is need for the insurance companies also to come on board as required by the law,” she added.
The Financial Action Task Force had listed Nigeria as one of the countries that had taken significant steps against money laundering and financing terrorism by enacting the Money Laundering (Prohibition) (Amendment) Act and the Terrorism (Prevention) (Amendment) Act, 2013, in line with international standards.
FATF in a report challenged Nigeria to address the deficiencies in its action plan.
When contacted, the Head of Media and Publication of the Economic and Financial Crimes Commission, Mr. Wilson Uwujiaren, said that enquiries should be sent to the NFIU which had statutory powers to monitor compliance of the banks with financial regulations.
“I have not seen anything like that but the right agency to talk to is the NFIU. It is the NFIU that would tell you authoritatively whether banks are complying or not,” he stated.
Ibebaku neither picked calls to her phone nor responded to a text message on Thursday.