Liberia Downgraded by GIABA after Alexander Cuffy’s Exit
MONROVIA – Liberia has been downgraded by the Inter-Governmental Action Group against Money Laundering and Terrorist Financing in West Africa (GIABA).
GIABA took the decision during its plenary meetings in Dakar, Senegal from 10-16 November 2019.
Headquartered in Dakar, GIABA is a specialized institution of the Economic Community of West African States (ECOWAS) responsible to facilitate the adoption and implementation of anti-money laundering and countering the financing of terrorism (AML/CFT) measures.
Liberia’s downgrading means it will report every six months, instead of the usual one year, on progress made in meeting international money laundering and terrorist financing standards and requirements.
If adequate steps are not taken to improve the reporting penalty, Liberia will suffer additional consequences that include the issuance of a public statement by GIABA and reported to the Financial Action Task Force (FATF) for further actions.
A public statement means Liberia is allowing its financial systems to be abused by criminals by not putting in adequate measures to protect the financial systems as part of the worldwide effort to combat money laundering and terrorist financing.
Further actions mean Liberia maybe blacklisted by FATF which will make it difficult for regional and international financial institutions to do business with financial institutions in Liberia and will discourage investors from coming to invest their money.
This will hamper Liberia’s ability to implement the pro-poor agenda for development and prosperity.
FATF, based in Paris, France, is the international body responsible to set standards and oversee the implementation of AML/CFT measures in all countries around the world.
Liberia’s relegation comes sharp on the heels of the departure of Alexander Cuffy, who was the executive director of the Financial Intelligence Unit (FIU) until September 2019.
The report on Liberia that was submitted by Cuffy-led FIU met the approval of GIABA to keep Liberia in its current position.
Unfortunately, that decision was overturned by plenary, which is the highest decision-making body of GIABA technical commission, thereby relegating Liberia from annual reporting process to every six months.
Though the FIU technically performed well under Cuffy, plenary was concerned about the overall support to the AML/CFT efforts in Liberia.
The plenary was concerned about the lack of political will on the part of the government to implement and enforce AML/CFT measures and provide adequate financial support to the FIU.
Sources from the plenary discussion pointed to the failure to complete, pass, approved and published revised AML/CFT laws and regulations; failure of the FIU board of directors to hold meetings; lack of a ministerial committee to steer the affairs of the National Risk Assessment (NRA); complete halt of the NRA process due to lack of funds; failure of the FIU to apply for membership of Egmont due to lack of support and circumstances surrounding the departure of Cuffy from Liberia.
Many believe that Cuffy was chased from Liberia due to his involvement in the investigation of the alleged missing L$16 billion and alleged misappropriation of US$25 million intended to mop-up excess Liberian dollars in circulation.
Cuffy was part of a presidential investigation team (PIT) set-up by President George Manneh Weah to investigate the alleged missing L$16 billion saga and alleged misappropriation of US$25 million mop-up exercise.
He came under fire in October 2018 when he declared that the PIT didn’t need external help to carry out the probe and would proceed with the investigation with or without the intervention of any international body.
Cuffy, who was the only Liberian to work with the Governance and Economic Management Assistance Program (GEMAP) during the administration of President Ellen Johnson-Sirleaf, boasted that Liberians had the tenacity to perform such task even better than their international counterparts.
But Cuffy was forced to resign from the FIU when unknown men began to track his movements in what many believe were attempts to assassinate him after a successful investigation, which largely corroborated with the United States government-funded Kroll investigation that confirmed an unaccounted more than L$2 billion.
Many believe that the PIT report was even better than the Kroll report, meaning that Cuffy lived up to his words.
About the FIU
The FIU was established as an autonomous agency by an act of the legislature in 2012 to operate as the central, national agency of Liberia responsible for receiving, requesting, conducting preliminary investigations, analyzing and disseminating information to competent authority concerning suspected proceeds of crime and terrorist property.
The FIU’s vision is to build a well-equipped unit dedicated to an effective AML/CFT regime.
It seeks to protect Liberia financial system from abuse of financial and economic crime for the enhancement of national, regional and global peace and economic stability.