Pubdate: Thu, 15 Jul 2004
Source: This Day (Nigeria)
Copyright: 2004 This Day.
Contact:  http://www.thisdayonline.com/
Details: http://www.mapinc.org/media/2870
Author: Oghenekevwe Laba

NDLEA WARNS ON CONSEQUENCES OF MONEY LAUNDERING

New Law Imposes N100 Million Fine Daily On Any Financial Institution That 
Aids It

The National Drug Law Enforcement Agency (NDLEA), has drawn the attention 
of financial institutions, particularly banks, to the consequences of a 
violation of the new money laundering act, stating that the law compels 
Compliance Officers in the banks to report suspicious transactions that 
have to do with money laundering to law enforcement agencies for investigation.

Delivering a paper entitled: "Recognising, Repor-ting and Combating 
Suspicious Transactions: Role of the Compliance Officer", at a two-day 
national seminar with the theme: "Repositioning the Compliance Officer in 
the Administration of the Money Laundering Prohi-bition", organised by the 
NDLEA in Lagos for banks and financial institutions officials, NDLEA 
Director of Prosecution and Legal Services, Mr Femi Oloruntoba, said 
reporting suspicious transactions was one of the mandatory responsibilities 
imposed on a financial institutions by the law as a tool to fight money 
laundering. Oloruntoba warned the banks on the consequences of the 
violation, stating that any defaulting institution was liable to a fine of 
N100 million for each day the offence continues.

He told the bankers that suspicious activities of money launderers could be 
recognised through the dubious characteristics of the customer or his 
activities, suspicious account running profile, suspicious customers 
identification circumstances, suspicious irregular transfer and suspicious 
deposit and withdrawals, among others.

The NDLEA Chief explained that Section 6 (2) of the Money Laundering 
(Prohibitive) Act 2004, required that a financial institution or a 
designated non-financial institution shall within seven days after the 
suspicious transaction referred to in sub-section 6(1) draw up a written 
report, containing relevant information and send same to the Financial 
Investigation Unit (FIU) of the Economic and Financial Crime Commission (EFCC).

"This in effect means that once a Compliance Officer comes across a 
suspicious transaction, he must report to FIU wether the suspected 
launderer carries out the transaction or not. The Compliance Officer has no 
hiding place. He cannot just advise the customer or warn the customer to 
desist from criminal activities and thereafter go to sleep without filing 
report with EFCC Financial Intelligent Unit", Oloruntoba said, adding that 
the Compliance Officer should equally obtain relevant information about the 
suspect.

Such information, he said, must include the names, address, telephone, 
occupation, date of birth, form of identification of the suspect and type 
of relationship with the financial institutions.

Again, he warned that merely reporting such a suspect to a law enforcement 
agency, was not a substitute for filling suspicious activity report with 
the EFCC department of FIU within seven days as failing to do so would 
still make the officer's institution liable.

Combating suspicious transactions, he said was the responsibility of 
financial institutions, law enforcement agencies and regulatory officers.

"Compliance officers must be vigilant and consistent. There must be in 
place an effective monitoring system. Customers activities must be 
consistently monitored to see if such activity fits into the profile of 
such customers. They must be effective monitor of deposits and withdrawals, 
balances, wire transfer activity as well as conducts of customers.

"Monitoring must be comprehensive and there must be constant review of the 
nature of transactions, the volume of transactions and critical assessment 
based on risk of type of transaction and important risk factors put into 
consideration. There must be an efficient know your customer policy in 
place and probing questions like why does a customer want a relationship 
with your financial institution", Oloruntoba cautioned, appealing that 
while they establish monitoring their customers account, they must compare 
on-going activities with purposes and transactions at the beginning of the 
relationship to see if there were erratic fluctuations and the economic 
justifications.

Transactions, involving hot zones like drug source countries, he said, must 
be specially scrutinised and assessed, adding also that suspicious 
disclosures should be handled by a small number of people , who were well 
trained and aware of the sensitive nature of the information.

He added that it is good to develop a robust relationship with contacts 
within investigating authorities, stating that the principles of the need 
to know was very important, just as it was not essential that all employees 
of a financial institution know about the suspicious activity being reported.

"Above all, willful blindness must be avoided by financial institutions and 
compliance officers. Willful blindness are caused by profit considerations, 
unhealthy rivalry and competition. While it is acceptable that financial 
institutions are set up for profit considerations, it must not be at the 
expense of integrity or good corporate governance, otherwise, the financial 
institution may not survive the effects of recklessness", he said.
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MAP posted-by: Beth