Cablegate: Nigeria: Laws Enacted Before Fatf Deadline

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

UNCLAS ABUJA 003314

SIPDIS

SENSITIVE

DEPT FOR INL AND AF
.
TREASURY FOR OFFICE OF ENFORCEMENT -- SHAUN LONERGAN

E.O. 12958: N/A
TAGS: EFIN SNAR KCRM NI
SUBJECT: NIGERIA: LAWS ENACTED BEFORE FATF DEADLINE

REF: ABUJA 3311 AND PREVIOUS

This is an action message; action request in para 8.

1.(U) During a December 14 emergency session, the Nigerian
Senate passed three pieces of money laundering legislation
and sent the bills to the President for signature. President
Obasanjo signed the bills into law the same day, just prior
to the FATF deadline of December 15 for Nigeria to pass at
least an amendment to the 1995 Money Laundering Act.

2.(SBU) The version of the Money Laundering Act Amendment
approved by the Senate and signed into law restored customer
identification and cash transaction reporting thresholds
proposed by the Presidency and coordinated with the FATF. On
November 27 the Senate raised the threshold requiring
financial institutions to identify their customers to USD
50,000 or "its equivalent in any foreign currency (appearing
to exclude transactions in Nigeria's currency, the Naira).
President Obasanjo's proposed threshold of USD 5,000 or its
equivalent in any currency was restored in the new law.

3.(SBU) Similarly, the Senate on November 27 raised the
threshold for requirements that financial institutions report
cash transactions to Naira five million (equivalent to USD
40,000) and ten million (equivalent to USD 80,000) for
individuals and corporate entities, respectively.

4.(SBU) The Money Laundering Act amendment also expands the
scope of the law's coverage beyond the proceeds of drug
trafficking to the "proceeds of a crime or an illegal act"
and expands the scope of financial institutions covered under
the Act to include stock brokerage firms and money changing
establishments. (Note: These changes were also encouraged by
the FATF. End Note).

5.(SBU) An amendment to the 1991 Banking and Other Financial
Institutions Act (BOFI) was enacted to give the Central Bank
of Nigeria expanded powers to deny licenses to financial
institutions and to freeze suspicious accounts. The third
piece of legislation enacted December 14 is an entirely new
Act -- the Economic and Financial Crimes Commission
(Establishment) Act -- which creates a cental law enforcement
agency to coordinate the Federal Government's efforts to
investigate and prosecute money laundering and other
financial crimes. This agency will also serve as a
clearinghouse for money laundering intelligence collected and
shared within the country and with international partners,
satisfying the FATF's call for a Financial Intelligence Unit
(FIU).

6.(SBU) According to President Obasanjo's Principal Secretary
Stephen Oronsaye, who attended the December 14 Senate session
to receive the bills for immediate signature by the
President, the bills have been faxed to the Chairman of the
FATF's Africa and Middle East Review Group (AMERG).

7.(SBU) Comment: The GON's remarkable enactment of this
legislation during a holiday recess and an electoral season
marked by extreme tension between the Legislature and
Executive branches was made possible by a recognition among
all concerned that Nigeria as a whole stood to lose from
inaction. This shows that, despite the many divisive forces
at play in the Nigerian body politic, policy-makers have the
ability to suppress individual interests and come together
around issues of national importance.

8.(SBU) Action Request: Upon U.S. Treasury's review of the
newly enacted legislation -- particularly the Money
Laundering Act Amendment -- please confirm that these reforms
satisfy the FATF's requirements for the prevention of
counter-measures against Nigeria.
JETER

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