The Abacha Case: How Anti-Money Laundering Procedures Should Have Flagged $267M Earlier

Abstract

PURPOSE – This paper aims to discuss the various anti-money laundering programmes that banks are required to put in place, to mitigate money laundering risk(s).

DESIGN/METHODOLOGY/APPROACH – This paper uses the “Mohammed Abacha Case” to illustrate the vulnerability of the banking system to money laundering, and to solidify the hypothesis that effective implementation of anti-money laundering measures, including customer due diligence, enhanced due diligence, recordkeeping, account monitoring and suspicious activity reporting can help flag illicit funds before a lengthy asset recovery process becomes necessary.

FINDINGS – This paper determined that a strong due diligence process where the owner of the Bank account and the Next-of-Kin/legal beneficiary are duly identified before the establishment of a business relationship is capable of reducing the risks associated with money laundering to the barest minimum. This paper also determined that anti-money laundering measures like record keeping, account monitoring and suspicious activity reporting can help curb money laundering.

ORIGINALITY/VALUE – This paper uses the “Mohammed Abacha Case” to help build awareness with the regulatory, enforcement and customs authorities as well as reporting entities about the risks and vulnerabilities of money laundering, and how to mitigate them. This is the only Article to adopt this kind of approach.

Keywords: Money Laundering, Customer Due Diligence, Enhanced Due Diligence, Record Keeping, Account Monitoring, Suspicious Activity Reporting