Money laundering Whether as a result of the Mutual Legal Assistance request or of its own volition, the Financial Services Authority, the body responsible for overseeing efforts to kerb money laundering in the UK commenced its own investigation. The Swiss authorities had started their investigation before the end of 1999. The information they obtained must have indicated the participation of banks operating out of the City of London. It would be surprising if the Swiss authorities had not discussed this with the UK authorities. Perhaps that was what spurred the FSA into action. At all events, the FSA published a Press Release in March 2001 in which they divulged the following information: 23 banks had been the subject of their investigation. In 15 of the banks investigated, money laundering compliance checks had “left a lot to be desired”. A total of US $1.3 billion was found to have passed through British banks. 98% of that money went through the 15 banks whose money laundering compliance regime was substandard. In total, over 30,000 Suspicious Transaction Reports (STRs) were made by UK financial institutions to the National Criminal Intelligence Service in 2001, this figure rose to nearly 100,000 in 2003 and is projected to reach 200,000 in 2004. (N.B these figures do not show how many of the STRs were linked the Abacha investigations.) The Press Release went on to say that none of the defaulting banks could be named owing to protection given to them under UK Banking Acts. There was thus no naming and shaming of banks and no prosecutions have been undertaken by the UK authorities despite receiving all those STRs. It was extremely difficult for the Nigerian Government to believe that the UK authorities were in any way serious about pursuing money laundering activities in the City of London. Invisible exports, which comprise largely the activities of the City of London are of course a huge contributor to Britain’s balance of payments. However, there is no doubt that the Abacha affair pricked the conscience of the UK Government. In June 2000 the Department of Overseas Development set up a Corruption Committee in the House of Commons which heard evidence from all sectors of the Financial Services Industry and members of the Nigerian Government. The report of the Committee came up with some startling revelations about the disparate nature of regulation in Britain and a chronic inability to take effective action in the face of abuses of the system, even those as flagrant as had been committed in the Abacha case. Parliament began considering legislation to streamline the whole system and to make it more effective. Then, on 11 September 2001 world terrorism struck its most devastating blow. The organisation of Al Qaeda and in particular its financing became overnight a top priority for the US and all western governments, including the UK. The Proceeds of Crime Act (POCA) achieved royal assent on 24 July 2002 and the money laundering provisions came into force in February 2003. POCA has
Posted on: Thu, 13 Jun 2013 03:38:24 +0000
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