Report by Basel Institute rated Nigeria as high-risk for money laundering also.
Nigeria is one of the countries in Africa that is plagued with terrorism, especially in the Northern regions of the country. Terrorist organizations such as Boko Haram, Islamic State West African Province (ISWAP), and Fulani herdsmen thrive in the Northeast, Northwest and North Central zones. Boko Haram, for instance, started way before ten years ago and saw the killing, maiming, and destruction of lives and property. The Fulani herdsmen were even rated the fourth deadliest terror group in the world.
It is not surprising, then, that the Basel Institute on Governance has rated Nigeria as a high-risk country for both money laundering and terrorist financing. The country was rated 6.77 out of 10. The country is the 17th according to the list out of 128 countries. This rating was contained in the report released by the institute, which is titled, “Basel AML Index 2022: 11th Public Edition – Ranking money laundering and terrorist financing risks around the world.”
The Basel AML Index is maintained at the institute.
The International Center for Asset Recovery at the Basel Institute on Governance developed and maintains the Basel AML Index. The institute is an independent, international not-for-profit organization dedicated to preventing and combating corruption and other financial crimes and to strengthening governance around the world. In the report, the organization further noted that countries with high risks of money laundering and terrorism financing often suffer from high risks of environmental crime. The report also captured that many countries were not doing enough to tackle the issues.
The report says, “When it comes to tackling dirty money, most countries are taking one step forward and four steps back – and remaining too many steps behind criminals seeking to launder illicit funds.” The report noted that since the first publication of the Basel AML Index 11 years ago, progress in anti-money laundering and counter-terrorism financing remains paralyzed. According to the 2022 index, the average global money laundering risk is stuck at 5.25 out of 10, where 10 is the maximum risk level.
Governments are not keeping the pace with criminals.
Criminals keep innovating. They innovate new ways of doing the same old thing without being detected. However, the report says that governments were not keeping up the pace to catch up with criminals. The report acknowledges that governments and financial institutions as well as other reporting entities are generally getting better at assessing their risks of money laundering and applying a risk-based approach to address them. But in areas where criminals are constantly innovating, the authorities are dragging their feet.
The cryptocurrency sphere is one of the areas. The average levels of compliance with international standards on risks from virtual assets are dropping dramatically as more countries as assessed. Recently, it was reported in the media that the West African financial intelligence agency, Inter-Governmental Action Group against Money Laundering (IGAGML), revealed that 300 casinos operating in Nigeria might be involved in money laundering. This is as Nigeria is battling to stem terrorism financing amid the escalating attacks by terrorists from ISWAP.
The ECOWAS body says money laundering risks to casinos are high.
The IGAGML, which is a body established by the Economic Community of West African States (ECOWAS), noted that money laundering risks to the casinos were high to those operating in Lagos and Abuja. The body added that the gambling spots were mostly owned by foreigners from South Africa, China, Lebanon, the United States, Germany, and the United Kingdom. Earlier in 2022, the Federal Government had revealed that it uncovered 123 companies and 96 others linked to terrorism financing.
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