NIGERIA: GON RESPONSE TO FATF CONCERNS

C O N F I D E N T I A L ABUJA 002557

SIPDIS


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


E.O. 12958: DECL: 08/29/2017
TAGS: KCRM EFIN PGOV SNAR NI
SUBJECT: NIGERIA: GON RESPONSE TO FATF CONCERNS

Classified by Ambassador Howard F. Jeter. Reasons 1.5 (b) and
(d).


1.(SBU) In June 2002 the Financial Action Task Force (FATF)
reviewed Nigeria's one-year status as a "Non-Cooperative
Country or Territory (NCCT)" and determined that it had made
no significant progress improving anti-money laundering
controls. At that time, the FATF publicly noted that the GON
had until October 31, 2002 to take significant steps;
otherwise, the FATF would ask its members to impose
"counter-measures" against Nigeria. We have learned from the
U.S. Department of Treasury representative to FATF that the
decision to proceed with counter-measures will actually be
taken at the October 9 Plenary session of the FATF.


2.(C) On August 28 Ambassador Jeter met with President
Obasanjo, alerting him to the possibility of imminent,
FATF-directed "counter-measures" against Nigeria failing a
discernible, positive response by the GON within the next
five weeks. The Ambassador outlined Nigeria's poor record of
communication with the FATF Secretariat in Paris and the
FATF's Africa and Middle East Review Group (AMERG) based in
Rome. Jeter cited successful attempts by the FATF President
and the AMERG Chairman to engage the GON in a dialogue. A
GON delegation to an AMERG meeting in Rome in December 2001,
led by the late Attorney General Bola Ige, had been well
received and showed promise of a sustained dialogue leading
to reform and averting Nigeria's censure by the FATF. With
Ige's death last December, however, the dialogue stopped,
leading to the negative finding by the FATF in June 2002.


3.(C) Ambassador Jeter specifically cited a July 11 letter
from the FATF President to Obasanjo, which has not yet been
answered. Obasanjo said he had not seen the letter but would
make sure the mail was answered adequately and quickly.
Several times repeating that Nigeria must do all it can to
avoid the anathema of FATF sanctions, the President said he
would make certain that dialogue with FATF would be resumed
by sending current Attorney General Kanu Agabi to Rome within
the next two weeks to explain that Nigeria wants to cooperate
and that it has a plan of action to enhance anti-money
laundering controls. Giving vent to his frustration and
continuing political troubles with the National Assembly, the
President blamed part of the problem on the failure of the
legislature to pass the proposed Financial Crimes
legislation that has been languishing in the Assembly for
months.


4.(C) In a subsequent meeting the same day with Presidential
Permanent Secretary Steven Oronsaye and Presidential Special
Assistant for Economic Affairs Obi Ezekwesili, the Ambassador
and RNLEO raised the same points in greater detail. Oronsaye
and Ezekwesili also said they had not seen the July 11 FATF
letter to the President but pledged to respond to it
immediately. They also stated the GON would prepare a
delegation to visit both the AMERG in Rome and the FATF
Secretariat prior to the October 9 session of the FATF

SIPDIS
Plenary in Paris. Ezekwesili stated that she knows the
precise concerns of the FATF. Like the President in his
meeting with us, she noted that a draft Financial Crimes
Bill, which would address much of the FATF's concerns through
structural reforms, remained stuck in the National Assembly.
However, Ezekwesili expressed confidence that the Presidency
could have the Central Bank of Nigeria adopt temporary
"circulars" or regulations to tighten reporting on financial
transactions as well as impose a greater threat of penalties
to banks that fail to report suspicious transactions.


5.(C) Comment: The GON's performance vis-a-vis the FATF has
been disappointing. We have repeatedly advised various
officials and urged the Government to deal with the FATF and
all money laundering issues more efficiently and timely.
Now, with the threat of embarrassing and perhaps financially
painful international "counter-measures," the GON seems
genuinely concerned and eager to do whatever is necessary to
convince the FATF that it wants anti-money laundering reform.
President Obasanjo seems to have designated Attorney General
Agabi as the Government's point-man on this issue, and the
Ambassador will meet Agabi next week. We will find out
Agabi's plans at that meeting and continue to press the GON
to be responsive to FATF concerns. Ambassador Jeter also
briefed Nigeria's National Security Advisor, Aliyu Mohammed,
on this issue.
JETER