US: Nigeria Still a Drug Transshipment Point

National Assembly

Tokunbo Adedoja 
in  Abuja


A new report, 2013 International Narcotics Control Strategy Report, released by the United States government yesterday said, "Nigeria remains a major drug transshipment point and a significant centre for criminal financial activity."

The report also noted that Nigeria’s anti-money laundering/counter-terrorist financing (AML/CFT) progress in 2012 relative to its action plan "was not considered sufficient" by the Financial Action Task Force (FATF), which highlighted Nigeria’s lack of adequate progress by including the nation in its October 2012 Public Statement."

The International Narcotics Control Strategy Report (INCSR)  - an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act -  describes the efforts of key countries to address all aspects of the international drug trade in a given calendar year.

Under Volume II of the report which deals with money laundering and financial crimes, US noted that, "Individuals, such as internet fraudsters and corrupt officials and businessmen, as well as criminal and terrorist organisations take advantage of the country’s location, porous borders, weak laws, corruption, lack of enforcement, and poor socio-economic conditions to launder the proceeds of crime."

The report said one of the schemes used by drug traffickers to repatriate and launder their proceeds includes the importation of various commodities, such as luxury cars, textiles, computers, and mobile telephone units.

"Money laundering in Nigeria takes many forms, including: investment in real estate; wire transfers to offshore banks; political party financing; deposits in foreign bank accounts; use of professional services, such as lawyers, accountants, and investment advisers; importing goods such as used cars and consumer electronics; and cash smuggling," it noted.

The report also said: "Proceeds from drug trafficking, illegal oil bunkering, bribery and embezzlement, contraband smuggling, theft, and financial crimes, such as bank fraud, real estate fraud, and identity theft, constitute major sources of illicit proceeds in Nigeria."

It observed that advance fee fraud, also known as “419,” remains a lucrative financial crime that generates hundreds of millions of illicit dollars annually.

The report specifically stated that the Nigerian criminal enterprises adeptly subvert international and domestic law enforcement efforts and evade detection, just as it recalled that the nation was ranked 139 of 176 countries on Transparency International’s 2012 Corruption Perception Index.

Also, in an apparent indictment of the Nigerian financial system, the report said drug traffickers reportedly use Nigerian financial institutions for currency transactions involving US dollars derived from illicit drugs.

It however maintained that the proceeds of illicit drugs in Nigeria derive largely from foreign criminal activity rather than domestic activities.

The US government also noted that lack of investigative capacity as well as judicial corruption had thwarted many prosecutions and investigations, and called on the Nigerian government to ensure the autonomy and independence of the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU) from political pressures.

It called on government to strengthen its supervision of designated non-financial businesses and professions and work to eradicate any corruption existing within law enforcement bodies.

Apart from that, it advised Nigerian government to ensure that the range of agencies that pursue money laundering cases, including the EFCC, Nigerian Drug Law Enforcement Agency, Independent Corrupt Practices and Other Related Offenses Commission, Nigerian Agency for the Prevention of Trafficking in Persons, and Nigeria  Police Force have the capacity to function as investigative partners in financial crimes cases.

Other suggestions made by the US government include: That the National Assembly should amend the Money Laundering (Prohibition) Act (MLPA) to provide for increased autonomy of the NFIU and adopt safe harbor provisions to protect STR reporting entities and their employees; that Nigeria should consider developing a cadre of specially trained judges with dedicated portfolios in order to handle financial crime cases effectively; and that the National Assembly should adopt a non-conviction based asset forfeiture bill.