SIERRA LEONE REVISES MONEY LAUNDERING ACT

UNCLAS SECTION 01 OF 02 FREETOWN 000221 SIPDIS DEPARTMENT FOR AF/W (JHUNTER) E.O. 12958: N/A TAGS: PGOV PREL KCRM SL SUBJECT: SIERRA LEONE REVISES MONEY LAUNDERING ACT ¶1. Summary: On May 21, the Bank of Sierra Leone organized a seminar to discuss a draft amendment to the 2005 Anti Money Laundering Act. Since its introduction, the Act has failed to effectively use advanced technology to prevent money laundering or to counter the financing of terrorism in Sierra Leone. Participants in the discussion, including government ministers, parliamentarians, civil society and members of the international community, came prepared with suggestions and recommendations to produce a more effective piece of legislation in addressing the changing techniques and methods of sophisticated criminal entities. The amendment, which is expected to wholly replace the 2005 Anti Money Laundering Act, would not only broaden the scope and detail of the law, it would also properly empower the appropriate enforcement mechanisms. End Summary ¶2. Sierra Leone has been slow in adapting international instruments to address offenses that have the potential to assume international dimensions. A recent example of this deficiency was the 2008 National Drugs Control Act: it was hurriedly passed and made retroactive in response to a significant narcotics case, though the legislation had been drafted and pending since 2006. In 2005, Sierra Leone found itself out of sequence with other countries with regards to money laundering and terrorist financing legislation. Parliament hurriedly passed the 2005 Anti-Money Laundering Act (AMLA),but failed to include terrorism financing provisions, therefore falling short of international standards. This, and other shortcomings, created a need to revisit the Act as quickly as possible. ¶3. On May 21, the Bank of Sierra Leone organized a seminar to discuss a draft amendment to the AMLA, which will address its deficiencies. The well attended seminar included statements from the Ministers of Justice and Finance a representative from the Inter-Governmental Action Group against Money Laundering in West Africa, and several relevant individuals from the Bank of Sierra Leone. Appeals Court Judge Nicholas Browne-Mark, and representatives from the World Bank and the United Nations Office for Drugs and Crime also made statements on the need for an amendment, areas to be maintained and strengthened, and areas needing to be repealed altogether. ¶4. The draft amendment, expected to be presented to Parliament in the near future, is considerably larger in scope and detail than the existing AMLA. The 2005 Act consists of only 6 parts and 47 Sections, while the draft amendment has 12 parts covering 111 Sections, including provisions related to financing of terrorist activities. The amendment also criminalizes money laundering and terrorism financing, and imposes penalties of at least 12 months imprisonment for offenders (Note: Support was given at the seminar to increase the penalties substantially. End note.). The amendment will also extend the duration for freezing assets or property of suspicious individuals or entities from three to ten days, and mandate the Financial Intelligence Unit (FIU) to cooperate with friendly states in sharing information/intelligence, requesting property seizures on the GoSL's behalf, and extraditions. The new amendment also proposes that a competent investigating authority can apply for a restraining order prohibiting the use of any property under investigation, as well as enforce the forfeiture of such property upon conviction. The distribution of proceeds from the disposed assets will be divided amongst the cooperating institutions/agencies. ¶5. The Bank of Sierra Leone's FIU was created by the AMLA, but the legislation failed to empower it sufficiently to carry out effective investigations. The proposed amendment makes the FIU the sole institution charged with receiving and analyzing reports about suspicious unlawful activities from financial institutions, government institutions, or by an agency of another country. If the FIU determines that a transaction merits further investigation, the case is disseminated to law enforcement agencies and other stakeholders. The FIU is also obligated to provide operating guidelines to financial institutions, provide periodic training to appropriate staff of licensed financial institutions, and provide adequate monitoring and supervision for compliance. ¶6. Comment: Though revising the AMLA has been a lengthy process, the inclusion of stakeholders ranging from Parliament to the World Bank has helped to ensure that this amendment will adequately address significant problems inherent in the original legislation. Whether or not this will have a major impact on improving implementation, however, is another matter. Despite intelligence supporting several cases, the 2005 Act yielded no criminal charges. Many of the indicators for money laundering, including the rapid FREETOWN 00000221 002 OF 002 influx of private banks, unfinished construction projects, and a proliferation of "resort construction" for a limited tourist market, are obvious. While the amended legislation is a good first step, implementation of the law in a cash-strapped country will likely be problematic. The political will to prevent Sierra Leone from becoming a haven for money launderers exist, but the operational ability to support that will does not. End Comment. FEDZER