13 July 2018

Liberia Faces Daunting Challenges in the Fight Against Money Laundering

Monrovia — Post-conflict Liberia is being faced with daunting challenges in fighting illicit financial trade particularly money laundering with little or no efforts being made by government in fighting the menace, despite the anti-graft institutions like the Financial Intelligence Unit (FIU) and the Liberia Anti-Corruption Commission (LACC) that have become a toothless bulldog, blaming their inefficiency to fight money laundering due to lack of political will. Liberia has an approximate population of over 4 million people according to the (2008 census) as many of the citizens live below the poverty line due to endemic corruption.

The FIU was created by a 2012 Act of the Legislature (approved on April 30, 2013 and published on May 2, 2013) as the national agency responsible for receiving, requesting, conducting preliminary investigations, analyzing and disseminating information to competent authority concerning suspected proceeds of crime and terrorist financing.

The FIU is the body charged with the primary responsibility of fighting illicit financial crimes including, money laundering along with its collaborating partners are yet to bring a suspect to court despite the Unit admitting to the prevalence of money laundering in Liberia.

There have been no arrests, prosecutions, or convictions for money laundering or terrorist financing in Liberia.

A 2014 International Narcotics Control Strategy Report (INCSR) Report noted, that money laundering has been difficult to detect because of Liberia's cash-based economy, lack of financial transparency and record-keeping, political interference, corruption, weak capacity within law enforcement and the judiciary, and lack of adequate resources.

"Liberia has a significant market for smuggled goods, which are easily imported as a result of its long, porous borders. There is little information linking money laundering to the sale of narcotics" the report noted.

The INCSR revealed that Unmonitored diamond and gold mining in border areas and opaque trading networks continue to be concerned. There are presently two casinos in the country; however, casino operators have no regulatory body overseeing their activities. The relative openness of Liberia's economy coupled with its craving for foreign investment make the country vulnerable to illegal business activities.

The report further revealed that the country's banking sector was also contributing to money laundering owing to the fact that Liberia has nine banks, eight of which are foreign-owned. Approximately half of those banks provide money transfer services through Western Union and Money Gram outlets. Three offer debit cards, automated teller machines, internet banking, and other modern bank products and services across the country.

As a post-conflict country, Liberia is still faced with the challenges of rebuilding its institutions and infrastructures that suffered from more than a decade-long civil war that devasted the country economy and killing more than 250,000 people.

Post-war Liberia has been characterized by the African Development Bank as a fragile state as money laundering remains one of the threats to the country's post-war economic recovery.

The Inter-governmental Action Group against Money Laundering in West Africa (GIABA) is helping Liberia to develop strategies to contain money laundering but the country is yet to make a significant gain.

In March this year, the head of Liberia's FIU challenged the Legislature to support anti-money laundering and countering financing of terrorism (AML/CFT) initiatives in Liberia after he was invited to provide insight on the working of the unit.

Alex Cuffy pleaded with the Legislature to enact AML/CFT laws and provide resources for sectoral stakeholders through budgetary appropriations and legislative representation or advocacy.

Cuffy told the lawmakers that the FIU has improved the negative reputation of Liberia with the Financial Action Task Force (FATF), the world's governing body on AML/CFT activities in Paris, France but there is a need for the country to enact necessary legislative instruments to increase the country's fight against money laundering.

"We have also recently been able to improve the problems we had with correspondent banking relationship. If you heard, few months ago, Liberia was losing almost all the correspondent banks. And when you don't have correspondent banks, you can't transfer money both ways," he said.

The FIU's vision is to build a well-equipped unit dedicated to an effective AML/CFT regime and protect Liberia financial system from abuse of financial and economic crimes for the enhancement of national, regional and global peace and economic stability.

There are 21 establish offenses for or linked to money laundering, participation in an organized criminal group and racketeering, terrorism, including terrorist financing, trafficking in human beings and migrant smuggling, sexual exploitation, illicit trafficking in narcotic drugs and psychotropic substances, illicit arms trafficking, robbery or theft, smuggling, extortion, forgery, among others.

And Cuffy said the FIU is assisting Liberia maintains and upgrades its standing with international bodies, including FATF and Inter-Governmental Action Group against Money Laundering in West Africa (GIABA).

He said the FIU is improving on its investigation and prosecution of financial crimes to assist in increasing revenues for the government.

The FIU boss, said Liberia has over the number of years that has AML/CFT measures in place and have not had even a case of money laundering or an indictment of money laundering and a guilty plea or guilty verdict and confiscation of property to the state, as he asserted that the country is not doing well in the global fight against money laundering.

"We have not achieved one confiscation yet, but we are assisting law enforcement to do that. Hopefully this year, we should succeed with three indictments. That's our target. We are also working with the revenue agency in increasing revenues because there are eyes that we have that they don't have," he stressed.

One of the major challenges facing the FIU, according to Cuffy, is the limited political will, which was recently hindered by the constitutional change of government.

Cuffy cited delays or refusals to provide information & data when requested by law, unavailability of databases, weak information technology infrastructure & equipment and inadequate budgetary support and provision of funds as some of the challenges confronting the FIU.

The FIU in the last fiscal year 2017/2018 was allotted seven hundred and eighty-one thousand, five hundred and seventy-four United States Dollars (US $781,574.00) sadly the FIU budget was slash after a budget shortfall, following a recast of the budget six hundred and ninety-eight thousand, five hundred and eight United States Dollars ( US$698,580.00).

Meanwhile Cllr. James Verdier, Chair of Liberia Anti-Corruption (LACC), the anti-graft body charged with a statutory responsibility to investigate and charge corruption suspects has outlined the limitation of a legal instrument, Inadequate budgetary allotment and lack of political will as some the major challenges facing the LACC fight against corruption including money laundering.

Verdier confirmed that are speculations and hints about money laundering in the country but said many of the cases coming before the LACC had been about abuse of power where public officials were channeling and misdirecting public resources but the LACC had not been able to detect any trace of money laundering in those cases although he noted that have been some elements, hints, and speculations about money laundering.

"Even though in some of the investigations there have been some elements, hints, and speculations about money laundering, but we can't charge people for money laundering if we don't have credible evidence" He noted.

He noted that the LACC is cautious in carrying out its investigation and charging a person with corruption or money laundering especially the Commission is careful about not just investigating and charging people for corruption or money laundering as the LACC was also about bringing people's hard-earned reputation to public disrepute.

"We don't need to have all of the overwhelming evidence if we have a convincing and credible evidence we can go to court" Cllr. Verdier added.

Verdier further noted that the non-co-operation of the other Ministries and agencies of government, as well as the three branches of government, continue to strangulate the work of the LACC as there is a need for greater 'political will' not only from the President but the Speaker of the Legislature and the Chief Justice.

He noted that there are politically exposed persons are at the helm of government institutions, many times they are colluding and hiding documents and making work difficult for anti-graft institution like the LACC.

"They are not willing many times to co-operate, like for the executive branch it has to be the president compelling someone to co-operate"

" With the way things are in Liberia, there has to be an unflinching, irrevocable, and strong commitment from heads of the three branches of government for certain laws to be implemented" He added.

According to Verdier, the LACC has limited power in its operation as the Commission was seeking subpoena and direct prosecutorial power especially through a specialized fast track and anti-corruption to in order speedily adjudicates cases which would serve as a deterrent for who be the perpetrator.

Tanneh Gbobeh Enders, is one of the three internationally certified anti-money laundering specialists, said the fight against money laundering will be elusive when the anti-graft group in the fight of corruption and illicit financial crimes continue to work at the will and pleasure of the president although they appear to be independent.

"Those anti-graft agencies will do nothing to fight money laundering because they are not 100% independent, the interest of the president will always be protected". Enders averred.

Enders noted that once people who are trusted with public funds are mostly the suspects of money laundering in Liberia, as it would be difficult for the fight against the crime to be realized noting that the LACC doesn't have financial expert to determine the elements of money laundering during investigation.

"They are only concern about corruption, embezzlement, misappropriation of public funds but are not concern about tracing the source of the money" she said.

She further noted that to have an independent anti-graft agency those employed in top positions should be vetted by panels independent civil society organizations although the appointees are on the basis of tenure, but it could make them more accountable if they were independently vetted and the uncompromising position of the president against corruption would be a greater will to overcoming illicit financial trade.

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