Impediments affecting the curbing of illicit financial flows of organised crime in developing economies. Policy implications
| Pages | 5-21 |
| Published date | 07 January 2019 |
| Date | 07 January 2019 |
| DOI | https://doi.org/10.1108/JFC-11-2017-0108 |
| Author | Emmanuel Sotande |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Impediments affecting the curbing
of illicit financial flows of
organised crime in
developing economies
Policy implications
Emmanuel Sotande
Economic and Financial Crimes Commission, Ajua, Nigeria
Abstract
Purpose –The purpose of thispaper is to examine the treats hindering war against illicitfinancial flows of
organised crime in developing economies and Nigeria in particular. The examination shows that the
impediments facing the fight against money laundering and organised crime financial flows vary from one
country to another. It may be lesser in developed economies where most instruments, treaties and best
practice recommendations to curb serious crime originated from. However, the impediments against the
proceedsof organised crime in developing economies are overwhelming.
Design/methodology/approach –The research methodology adopted was qualitative analysis. This
was appliedthrough the use and analysis of documents and expert interviews.
Findings –The impediments jeopardising the success against organised crime and other related serious
crime financial flows in developingeconomies are devastating. Consequently, the study offeredsome policy
implicationsto help mitigate these impediments in developingcountries. The dynamics and the phenomena of
organised crime business model are operated with ingenious strategies within the global states. Therefore,
staying in control of the menace and the threats originated from the organised criminal activities would
require periodic review of the global initiatives,standards and strategies deployed by the standard setters to
combat organised crime and its financial flows in developing and evolving economies. Additionally, the
implementing countries should be carried along and allow to make inputs when such initiatives and
standardsare being developed.
Social implications –In Nigeria, there is a clearevidence of “collateral damage”in terms of social justice
as result of financial exclusion of manybankable adults of the country that do not possess unique identities
for account opening documentation and customer due diligence of the Financial Action Task Force
recommendation10.
Originality/value –There have been quite a number of studies on organised crime and still fewer have
recognised the need to explore the success or failure of combating the proceeds of crime in developing
economies.This study provides answer to these gaps by screening associated risks of fightingthe proceeds of
organisedcrime in developing countries and Nigeria in particular.
Keywords Nigeria, Money laundering, Organised crime, Developing economies,
Illicit financial flows
Paper type Research paper
Analysis of impediments
The analysis of the expert interviewsof this research work revealed numerous deficits that
impede the fight against management of illicit financialflows of organised crime in Nigeria.
The challenges facing the fight against financial flows of organised crime in developing
economies are classified into five categories in this thesis. These categorizations are
Curbing of
illicit financial
flows
5
Journalof Financial Crime
Vol.26 No. 1, 2019
pp. 5-21
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-11-2017-0108
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
informed by the expert interviews conducted in Nigeria, Ghana, Senegal and the Gambia.
These challenges are politicalimpediments, operational and social impediments, economical
impediments and legal impediments. Each of these categorizations will be discussed
extensively in this paper.
Part I. Political impediments
The political impedimentsdiscovered during the analysis of the expert interview are divided
into two: first, blindfoldedcapable guardian and political corruptionand, second, politicking
the operational autonomy of the Financial Intelligence Unit (FIU) in Nigeria. These will be
discussed in turn in thissection.
Blindfolded capable guardian and political corruption
The first impediment noted by this research paper is referring to the blindfolded capable
guardian and political corruption. In most developed and developing economies where the
fight against criminal proceeds recorded a successful outcome, there is also a strong
correlation to good governance and political will that is free of political corruption (World
Bank and International Monetary Fund, IMF, 2008; The World Bank, 2009). The capable
guardian in this paper is referred to the political leadership of a country. In Nigeria, the
capable guardian (the government) is expected to commit their will to curb the financial
flows of organised crime.
According to Felson (1998:4) in Police Research Series Paper 98, titled “Opportunity
Makes the Thief”, they posit that routine activityapproach to crime determined the success
of any criminal opportunity. In their argument, they considered three core concepts upon
which crime opportunities can occur,and they are a likely offender, a suitable target/victim
and the role of capable guardianagainst crime. It is when deficit occurred within the capable
guardian and suitable target/victim, that rational actor the offender takes the suitable
decision from the crime opportunities available to them in the environment where they
operate. Consequently, a robust political will and good governance is presumed as capable
guardian to mediate and prevent criminal opportunities that exist in Nigeria. One of the
greatest challenges noticed by the GIABA withinthe West African region is the inability of
countries to make improvements because of lack of political will to fight transnational
organised crime activities amongsome member states, and in some instances, less political
will is observed (GIABA Expert 1). Therefore,the absence of political will in the governance
against crime is a major constraint that constitutes a weak-link to the fight against illicit
flows of organised crime in Nigeria.
According to NDLEA Investigator 2, “The Political Exposed Persons (PEPs) that are
expected to be the role model in Nigerian environments are the most criminal minded in the
country. This makes the culture of crime in Nigeria a pleasure, and the punishment of crime
(the pain) is less fashionable due to the involvement of PEPs in all sorts of crimes in Nigeria”.
For instance in 2010, the Edo State House of Assembly aspirant in Nigeria was arrested by
NDLEA for attempting to export 2.120 kg of cocaine concealed in his stomach at the Murtala
Muhammed International Airport Lagos when travelling abroad (GIABA, 2010a,b). This
illustrates the “symbiotic”relationship between capable guardian and the organised crime
offenders, where legal actors are committing organised crime (Passas, 2003).
In the same vein, former president Goodluck Jonathan of Nigeria also grants
Alamieyeseigha, the notorious money launderer and the ex-governor of Bayelsa with a
presidential pardon in 2013 (BBC, 2013). The former president was his deputy governor
during this period of political theftof the revenue belonging to the people of Bayelsa, one of
the richest oil states in Nigeria that has its widercommunity living in poverty (BBC, 2013).
JFC
26,1
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