Fifteen UK Banks Censured Over Abacha Money

Jason Gorringe, Tax-news.com, London

09 March 2001

Britain's Financial Services Agency (FSA) has censured fifteen UK banks for inadequate money-laundering controls. The flaws emerged during the FSA's investigation into the handling of money linked to General Sani Abacha, the late Nigerian dictator.

In a report issued this week, the FSA says that it found $1.3bn that had flowed through 42 accounts in the 15 banks over a 4-year period, although there may be some double-counting since the money often moved through multiple accounts in a complex way.

The Nigerian authorities had previously said that more than $1bn of the more than $4bn looted from the country during Gen Abacha's rule passed through the UK, and have repeatedly asked the UK for assistance in tracing the money. The UK has refused, on the grounds that it has not been presented with prima facie evidence of a crime committed in the UK, which is the necessary precursor to action.

The Abacha affair has been one of the reasons for the announcement this week of a new Proceeds of Crime Bill which will set up a powerful Financial Confiscation Agency able to probe financial operations simply based on 'reasonable suspicion'.

Investigations by the UK financial regulator, which took three months, examined controls at 23 banks in the UK where accounts linked to the Abacha family and close associates were identified.

The FSA found 15 with "significant control weaknesses" and is still working with seven to remedy these. The other eight have corrected the weaknesses since the accounts were opened.

Until the Financial Services Act comes into force later this year, the FSA is unable to 'name and shame' banks found to have inadequate controls against money-laundering. But many of the banks implicated in the Abacha affair have already been named in UK newspapers.

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