This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 ABUJA 002193 
 
SIPDIS 
 
STATE FOR INL 
ALSO FOR AF/W 
JUSTICE FOR OIA AND AFMLS 
TREASURY FOR FINCEN 
 
E.O. 12958:  N/A 
TAGS: SNAR KCRM EFIN NI
SUBJECT: NIGERIA: 2003-2004 INTERNATIONAL NARCOTICS CONTROL 
STRATEGY REPORT (INCSR) PART II FINANCIAL CRIMES AND MONEY 
LAUNDERING 
 
Ref: STATE 328024 
 
The following is Post's submission for part II INCSR for 
Nigeria 
 
Nigeria. 
-------- 
 
Nigeria is Africa's largest democracy and a hub for money 
laundering and other financial crimes not only for the West 
African sub-region but also increasingly for the entire 
continent. Individuals and criminal organizations have taken 
advantage of the country's location, weak laws, systemic 
corruption, lack of enforcement, and poor economic 
conditions to strengthen their ability to perpetrate all 
manner of financial crimes at home and abroad.  Their 
success in avoiding prosecution has led to an increase in 
financial crimes of all types, including bank fraud, advance 
fee fraud, and money laundering. Despite the determined 
efforts of the government to counter years of rampant 
corruption, Transparency International still ranks Nigeria 
as the second most corrupt country in the World. 
 
Nigerian Advance Fee Fraud is one of the most lucrative 
financial crimes committed by Nigerians.  This type of fraud 
is referred to internationally as "Four-One-Nine-Scams," 
(419 is the Nigerians penal code's section on fraud). The 
gist of a "419" scam is to convince victims that they will 
receive an exorbitant return for providing a relatively 
modest payment of a fictitious fee in advance. Businesses 
and individuals around the world have been and continue to 
be targeted by these "get rich quick" offers.  These scams 
often go beyond confidence games; violence against the fraud 
victims has also occurred.  Some evidence exists that 
narcotics traffickers have utilized 419 Scams to fund their 
illicit smuggling efforts. 
 
In December 2002, the National Assembly passed three key 
pieces of anti-money laundering legislation:  an amendment 
to the 1995 Money Laundering Act, that extends the scope of 
the law's coverage beyond the proceeds of drug trafficking 
to the proceeds of all crimes; an amendment to the 1991 
Banking and Other Financial Institutions (BOFI) Act that 
expands coverage of the law to stock brokerage firms and 
foreign currency exchange facilities and gives the Central 
Bank of Nigeria greater power to deny banks licenses and to 
freeze suspicious accounts; and the new Financial Crimes 
Commission Act that creates a central law enforcement body 
to coordinate anti-money laundering operations and 
information sharing.  The Economic and Financial Crimes 
Commission (EFCC), created by the December legislation, was 
formally constituted in April 2003 to investigate and 
prosecute all forms of economic crimes, advance fee fraud 
(419) and other financial sabotage against the country.  In 
November 2003, President Obasanjo presented bills on money 
laundering and economic crimes to the Senate for 
consideration.  The bills would repeal the Money Laundering 
Act 2003 and the Economic and Financial Crimes 
(Establishment) Act 2002 in order to strengthen them against 
these crimes and to get Nigeria de-listed from the Financial 
Action Task Force (FATF) list of Non-Cooperative Countries 
or Territories (NCCT).  Nigeria recently inaugurated a 15- 
member panel, chaired by the National Security Advisor, to 
check advance-fee fraud and allied crimes via the Internet. 
 
The National Drug Law Enforcement Agency (NDLEA) and the 
Money Laundering Surveillance Unit (MLSU) of the Central 
Bank of Nigeria will continue to play a role in fighting 
money laundering, but will have the lead only where money 
laundering is connected to proceeds of drug trafficking. 
 
The EFCC recently set up a Financial Intelligence Unit (FIU) 
and has since May 2003, recovered or seized assets valued at 
over 31 billion Naira (US219 million dollars) from various 
fraudsters inside and outside of Nigeria and more than one 
billion Naira (approximately US7 million dollars) from a 
syndicate that included highly placed government officials 
defrauding the Federal Inland Revenue Service (FIRS). 
Several influential individuals have been arrested and are 
currently incarcerated awaiting trial and numerous 
properties and personal possessions have been confiscated. 
In an effort to expedite the trial process, the Commission 
has been assigned two high court judges in Lagos and two in 
Abuja to hear all cases involving financial crimes.  This 
has resulted in an aggressive campaign to combat "419" and 
other economic crimes in Nigeria and has served as notice 
for some that the country is serious about sanitizing its 
image as a corrupt nation.    We encourage the Government of 
Nigeria to adequately fund all agencies involved in 
combating economic crimes making them less susceptible to 
corruption. 
 
The following responses are keyed to the questions in 
reftel. 
 
¶18. Nigeria is considered an important regional financial 
center.  Lagos, the former capitol, is the New York of 
Nigeria.  It is the hub of all manner of financial crimes, 
including bank fraud, advance fee (419) fraud and money 
laundering. 
¶19. Money laundering is not primarily related to narcotics 
proceeds but rather to the proceeds of public corruption. 
According to reports from Central Bank of Nigeria (CBN) and 
the National Insurance Cooperation of Nigeria (NICON), bank 
fraud is on the increase.  Numerous banks have been closed 
due to rules violations and misappropriation. 
¶20. Criminal proceeds laundered in Nigeria are from domestic 
criminal activity. 
¶21. Nigeria does have a significant black market for 
smuggled goods and although items have been linked to 
individuals connected with financial crimes, the funding of 
these goods are not believed to be from narcotics or other 
illicit proceeds. 
¶22. Money Laundering occurs in all areas of financial 
activities.(example: Government officials deposit agency 
funds in preferred banks sometimes for a fee) 
¶23. There is no evidence that narco-traffickers or any other 
particular group controls money-laundering proceeds in 
Nigeria.  Nigeria has pockets of criminal activity but not 
organized in our definition of criminal organizations, i.e. 
mafia, cartel etc. 
¶24. Neither the Nigerian government nor any senior 
government officials are known to encourage, facilitate or 
engage in laundering the proceeds from illegal drug 
transactions, from other serious crimes or from terrorist 
financing as a matter of government policy or practice.  To 
the contrary, the Obasanjo administration has gone out of 
its way to project an image of being serious about stamping 
out corruption and other crimes that affect the image of the 
country. 
¶25. It is possible for financial institutions to engage in 
illegal currency transactions involving international 
narcotics trafficking proceeds that include U.S. currency 
but post has no direct knowledge of any particular 
occurrences.  The Nigeria National Assembly recently passed 
money laundering and financial and economic crime 
legislation strengthening previous legislation in both 
areas. 
¶26. Money laundering is a criminal offense under Nigerian 
law.  The Money Laundering Prohibition Act 2003 signed May 
22, 2003 and the new Economic and Financial Crimes Act 2002 
were recently appealed and new Money Laundering and Economic 
Crime Bills recently passed the National Assembly and have 
been forwarded to the President for signature. 
¶27. The money laundering law applies to proceeds of all 
financial crimes.  It also covers stock brokerage firms and 
foreign currency exchange facilities.  It also gives the CBN 
greater powers to deny banks licenses and freeze suspicious 
accounts. 
¶28. Banks and Financial Institutions are required to 
identify customers whenever transactions exceed the 
threshold amount of $5,000 or its equivalent.  A report must 
be filed even if the transaction was not accepted. 
¶29. Banks are required to retain record of significant 
transactions for five years. 
¶30. Suspicious transactions must be reported when they 
occur. 
¶31. Since money-laundering laws require banks to report 
suspicious transactions, they are in turn, protected by that 
law. 
¶32. There are no secrecy laws dealing with financial 
activity in Nigeria. 
¶33. Individuals are required to declare currency of $10,000 
or equivalent when entering Nigeria. 
¶34. See 33. 
¶35. Banks risk losing their license to operate and bank 
officers are subject to prosecution for failure to take 
actions to identify and combat money-laundering activity. 
¶36. Nigeria's money laundering law of May 2003 applies to 
exchange houses and other financial institutions.  New 
legislation recently passed in the National Assembly is 
designed to close the loopholes in casinos, insurance 
companies, hotels and individuals not covered under previous 
legislation. 
¶37. There is one case currently before the Nigerian courts 
involving money laundering. 
¶38. The anti-money laundering law created the EFCC that has 
made numerous high-profile arrests of persons suspected of 
financial crimes.  Public opinion has been very favorable 
and the banks are very receptive since many have been hurt 
by fraudulent activity in the past. 
 
¶39. The Economic and Financial Crimes Commission 
(Establishment) Act 2002, which passed on December 15, 2002, 
criminalizes the financing and participation in terrorism. 
Any person who commits an offense under the Act is liable on 
conviction to imprisonment for life. "Offenses relating to 
Terrorism" 
 a.   a person who willfully provides or collects by any 
    means, directly or indirectly, any money by any other person 
    with intent that the money shall be used for any act of 
    terrorism, commits an offense under this Act and is liable 
    on conviction to imprisonment for life. 
b.   Any person who commits or attempts to commit a 
terrorist act or participates in or facilitates the 
commission of a terrorist act, commits an offense under this 
Act and is liable on conviction to imprisonment for life. 
c.   Any person who  makes funds, financial assets or 
economic resources or financial or other related services 
available for use of any other person to commit or attempt 
to commit, facilitate or participate in the commission of a 
terrorist act is liable on conviction to imprisonment for 
life. 
 
¶40. The jurisdiction has the authority to identify, freeze, 
and seize terrorist finance-related assets, and circulate 
the list of individuals and entities that have been included 
in the UN 1267 Sanctions Committee Consolidated list. 
¶41. No terrorist finance-related assets have been identified 
by the GON. 
42.Nigeria recognizes the existence and use of indigenous 
alternative remittance systems such as moneychangers and has 
established a requirement for registration with the CBN 
according to prescribed criteria. 
¶43. According to the EFCC, this is not yet a problem in 
Nigeria. 
¶44. Nigeria is a party to the 1999 International Convention. 
 
OFFSHORE FINANCIAL CENTERS 
45-48. Not Applicable, Nigeria has no offshore banking 
system. 
 
INTERNATIONAL COOPERATION 
¶49. Nigeria and the U.S. signed a Mutual Legal Assistance 
Treaty (MLAT) in 1989, which was ratified by the U.S. in 
¶2001.  The instrument of ratification was signed in January 
¶2003. 
¶50. N/A 
¶51. USG personnel as well as those of other governments have 
access to documents and records involving investigations of 
all criminal activity. 
¶52. Nigeria has demonstrated a willingness to cooperate with 
all USG law enforcement agencies in the investigations of 
all types of crimes. 
¶53. Nigeria is a party to the UN Drug Convention and has 
passed legislation that adheres to international money 
laundering standards.  Nigeria's EFCC, constituted in April 
2003, recently set up a Financial Intelligence Unit (FIU). 
Legislation to strengthen the laws was passed by the 
National Assembly in December 2003. 
¶54. Yes, frequent exchanges of information have taken place 
with USG law enforcement agencies but on-site examinations 
are done through host country contacts. 
¶55. Nigeria has been very cooperative with the U.S., 
especially during extradition proceedings, resulting in the 
extradition to the U.S. of an individual for financial 
fraud.  Two additional cases are pending on which the GON 
has been extremely cooperative with U.S. law enforcement 
authorities. 
¶56. Since 1999, the USG and GON have enjoyed excellent 
cooperation on many fronts.  Post knows of no instances 
where Nigeria has refused to cooperate with a foreign 
government or the USG. 
¶57. Nigeria has signed bi-lateral agreements for exchange of 
information on money laundering with South Africa, United 
Kingdom, and all Commonwealth and Economic Community of West 
African States (ECOWAS) countries. 
¶58. Nigeria and the U.S. signed a bi-lateral Letter of 
Agreement (LOA) in July 2002 for narcotics and law 
enforcement assistance.  That agreement has been amended 
four times to expand assistance in various area of law 
enforcement.  The instrument of ratification for the Mutual 
Legal Assistance Treaty (MLAT) was signed in January 2003. 
 
ASSET FORFEITURE AND SEIZURE LEGISLATION 
¶59. (N/A) 
¶60. Asset forfeiture is covered under the Economic and 
Financial Crimes Commission (Establishment) Act 2002. 
¶61. The EFCC Act has provisions for sharing of proceeds of 
seized assets. 
62.Adequate provisions exist in current laws but the 
resources for enforcement are limited. 
¶63. N/A 
¶64. According to Nigeria's money laundering legislation, 
anything related to the crime is liable to seizure. 
¶65. Any business involved in the commission of a crime is 
liable for seizure under Nigeria's money laundering law. 
¶66. Proceeds of seized assets go to the Federal Government. 
¶67. Working with FATF, Nigeria took great strides to ensure 
that traffickers could not take advantage of money 
laundering laws.  The bill currently being forwarded to the 
President for signature should close any remaining 
loopholes. 
¶68. Yes, the law applies equally to civil and criminal 
forfeitures. 
69.Enforcement is limited for drug-related seizures since 
most of the drug seizures are small and involve couriers 
transiting Nigeria's international airports, however, the 
EFCC has made numerous seizures involving financial fraud. 
¶70. The National Drug Law Enforcement Agency (NDLEA) and the 
Economic and Financial Crimes Commission (EFCC) and the 
Nigerian Police Force (NPF) in some cases are responsible 
for tracing and seizing assets. 
¶71. The EFCC Act gives police powers to the Commission. 
¶72. Since May 2003, the EFCC has seized assets valued over 
$200,000,000. 
73.The EFCC didn't exist until April of 2003 and no 
estimates are available for the time period prior to their 
existence. 
¶74. The MLAT and improved relations between Nigeria and the 
U.S. has ensured cooperation on many issues.  Bank accounts 
have been frozen in response to request from the USG. 
¶75. Yes, in the investigative process, Nigeria uses all 
available information to pursue the perpetrators of 
financial crimes. 
¶76. Nigeria is engaged with South Africa, United Kingdom and 
ECOWAS on agreements to enhance its fight against financial 
fraud. 
¶77. Public and political response have been very positive to 
the efforts of the EFCC. 
¶78. Banks are very supportive and cooperative with the law 
enforcement agencies responsible for money laundering and 
financial crime prevention.  They recognize the benefits to 
be gained. 
¶79.  EFCC revealed that some threats have been made but no 
attempts to carry out any threats or retaliation for 
enforcing the economic crime laws. 
 
ROBERTS