New York – The Vice President for Operations of the Liberia Football Association (LFA), Anthony Cassell Kuoh, has been arrested in the United States of America for alleged gold fraud and money laundry. He was arrested on November 16, 2016, and is currently being held in federal prisons in North Carolina.
Liberia is not a significant regional financial center. The financial system has limited capacity to detect money laundering, and financial controls are weak. The economy runs on a traditional cash-based system, with the Liberian and U.S. dollars being legal tender – a policy that is detrimental to Liberia but encouraged by the Liberian leadership for personal and collective reasons.
Despite these facts, Liberian officials are wiring more resources and stolen wealth into western nations and banks than any other African nation. Most officials who served in the Sirleaf’s administration since 2006 are said to have purchased homes in the United States worth millions of dollars, some quarter millions of dollars.
The most recent United States Department Human Rights Report on Liberia maintained that Liberian government officials are massively engaged in corrupt practices with impunity and that the situation has overwhelmed many Liberians, noting that this situation is getting worst daily.
There are nine commercial banks operating in Liberia, eight of which are foreign-owned, mainly Nigeria and Ghanaian based. Local Liberian banks are owed by those in power, including members of the President’s family.
Approximately half of those banks provide money transfer services through Western Union and Money Gram outlets. Three offer debit cards, automated teller machines, internet banking, and other modern bank products and services across the country. Liberia has a significant market for smuggled goods, which are easily imported because of its long, porous borders.
There is little information linking money laundering to the sale of narcotics. Unmonitored diamond and gold mining in border areas and opaque trading networks continue to be concerns.
There are presently two casinos in the country; however, casino operators have no regulatory body overseeing their activities. The relative openness of Liberia’s economy coupled with its craving for foreign investment make the country vulnerable to illegal business activities.
In addition, the country’s immigration policy is weak and corrupt. Anyone from any sub-Sahara African nation can become a Liberian citizen without going through a naturalization process. Many Nigerians, Ghanaians, Guineans and Ivoirians claim Liberian citizenship at will, something that cannot happen in those countries.
ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
There have been no arrests, prosecutions, or convictions for money laundering or terrorism financing in Liberia. Money laundering is difficult to detect because of Liberia’s cash-based economy, lack of financial transparency and record-keeping, political interference, corruption, weak capacity within law enforcement and the judiciary, and lack of adequate resources.
In April 2013, the Government of Liberia signed the Anti-Money Laundering (AML) Law and the Law to Establish Financial Intelligence Unit (FIU). The passage of these laws criminalizes money laundering and terrorism financing and makes them first degree felonies, which carry heavy prison sentences; and ensures effective AML/CFT supervision for reporting entities such as banks, insurance companies, and non-bank financial institutions.
The FIU legislation calls for setting up a central, national agency responsible for receiving, requesting, analyzing, and disseminating to the competent authority’s disclosures of financial information to counter money laundering and financial crimes.
The Central Bank of Liberia (CBL) continues to enhance the technical and logistical capacities of its supervision division to carry out its risk-based supervision in the financial sector.
Currently, the CBL receives suspicious transaction reports (STRs) from commercial banks based on its KYC and customer due diligence (CDD) regulations, but uses them for internal purposes only.
The threshold for suspicious transactions or transfers is $25,000 or more for individuals and $40,000 or more for corporations. Per the CBL’s Regulation Concerning Transfer of Foreign Currency, an individual without a bank account is allowed an over-the-counter transfer of up to $5,000 at a time, with a limit of two over-the-counter transfers of up to $5,000 each within a thirty-day period at any given bank. The CBL acknowledges that its KYC and CDD guidelines merit updates.
The CBL does not lack the technical capacity to strictly monitor or enforce compliance, the fact is most of the people that transfer huge sums of money out of Liberia are government officials and members of those who are in power. In fact, there are reports that some banks are ignoring the KYC/CDD principles.
In May 2013, the CBL commenced Liberia’s first Treasury bills (T-bills) auction, which attracted overwhelming responses from commercial banks in the country. Although there is no functional capital market, the CBL’s T-bills auctions are expected to pave the way for the establishment of a benchmark for a corporate debt securities market.
In Liberia, any person, partnership, or company may establish a foreign exchange bureau upon receipt of a license from the CBL. The government does not have a mechanism in place to regulate the activities of these bureaus for AML/CFT purposes. Currently, there are over 700 licensed and non-licensed foreign currency exchange bureaus operating in Liberia, many of them owed by Nigerians, Guineans and others who are protected by Liberian officials,
Throughout Liberia, foreign currencies are exchanged with any person, without identification or verification of identity or business profile. This sector poses a high level of vulnerability to money laundering, terrorism financing, and suspicious transactions.
Both the Liberia National Police, through the Criminal Investigation Division’s Technical Investigation Unit, and the National Security Agency, through intelligence units, investigate financial crimes. The Liberian Drug Enforcement Agency (DEA) designs and formulates anti-drug policies and coordinates, collaborates, and facilitates the enforcement of anti-drug law in Liberia. The DEA also has the authority to investigate money laundering in relation to drug-related offenses, but does not have the capacity, due to political interferences and influences, to do so.