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Wednesday, 27 June 2012

Federal Government denies losing two US accounts over money laundering

The Federal Government says the allegations that it lost two of its US accounts over money laundering are false and malicious.
The Nigerian government on Tuesday, denied that the bank accounts of its missions in the United States had been shut by American officials over money laundering scare, days after President Goodluck Jonathan ordered an investigation.
News reports had it that bank accounts belonging to the Nigerian embassy in Washington, and the country's United Nations mission in New York, had been frozen by Wells Fargo bank and Bank of America, after officials raised red flags on alleged money laundering by the Nigerian representatives.
The reports said as much as $3.5 million were transferred through the two accounts within a short period of time, prompting the American officials to act, aware that Nigerian officials had made use of similar channels in the past to launder public funds.
Mr. Jonathan during his televised media chat on Sunday, said that he had ordered the Economic and Financial Crimes Commission (EFCC) to verify the details he read in the news media.
But the Minister of Foreign Affairs, Olugbenga Ashiru, denied the two missions owned accounts with the two American banks in the first place, and said the money laundering allegations are false.
"As far as we are concerned, all the stories about Wells Fargo are fiction," the minister said when he addressed the House of Representatives committee on foreign affairs.
"I can tell you categorically that Nigeria and Nigerian missions do not have account with Wells Fargo, and you do not close what is not there," he told the lawmakers.
Mr. Ashiru said details of the events had been mixed in the reports, and explained the accounts were closed with a merchant bank in response to the US government's directive to all countries, not only Nigeria.
The order, which is derived from the US Patriot Act, is aimed at forestalling money laundering, and requires all foreign missions in the United States, particularly Africa, to close their bank accounts and open new ones which will be thoroughly scrutinized.
According to the Minister, the rigorous paperwork and time required for the new process prompted the countries to seek the intervention of the US State Department; but when that failed, the missions decided to put off the accounts.
Nigeria closed hers in March 2012, and opened a new account with City bank, the minister said.
"The US only asked the countries to come and close their accounts and open new ones; there was nothing directed at Nigeria," he said.
According to a statement by the embassy obtained by the News Agency of Nigeria in New York, "These allegations are malicious and are designed to malign the integrity of the leadership of the Nigerian missions in the US.
"It is true that African embassies have within the past one year been facing problems banking in the US.
"This arose as a result of the Patriot's Act by which stringent compliance regulations were imposed by the US government to prevent possible money laundering that might be used to finance terrorist activities.
"The activities of Al-Shabab in Somalia make the issue of terrorism of particular concern to Africa," the statement reads.
According to the embassy, compliance to the regulations involve a large amount of paper work and staff time.
It added that many banks thought that the amount of staff time and energy spent in fulfilling the strict compliance regulations were not justified by the profit they make in keeping such accounts.
"This was why within the past 15 months, many African and Asian embassies were told to close their accounts by their bankers and look for new ones.
"The African Ambassadors Group both in Washington, DC and New York have held series of meetings with government and banking authorities in America with a view to lessening the rigour of the Patriot's Act," the embassy said.
The embassy said initially, the Nigerian missions were not affected but at the beginning of 2012, they received notices from the banks giving them between three to four months to close their accounts and look for new ones.

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