The Nigerian newspaper Punch reports that financial regulators say Islamic charities are being used to fund Boko Haram.
Terrorist sympathizers are also structuring their bank transactions—a classic money laundering technique—in small enough increments to avoid triggering the filing of suspicious transaction reports by the banks they use.
This is the classic money jihad. Fundamentalist Muslim leaders are obtaining zakat donations from extremist parishioners who believe, as the Koran and Hadith instruct them, that they should wage jihad with their lives and their wealth, and that the mujahideen are an eligible category of zakat recipients.
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NFIU probes banks, charities over Boko Haram funds
March 23, 2013
Anti-terrorism experts in the Nigerian Financial Intelligence Unit have placed some banks and charities in the country under watch for allegedly aiding the transfer of funds by Boko Haram.
This is just as there are indications that the extremist group has been involved in recruiting suicide bombers from refugee camps run by the Polisario Front in Algeria.
NFIU sources told Saturday PUNCH that sympathisers of the group had been exploiting monetary practices embedded in Islamic culture, such as Zakat, donation to charities and alms-giving to channel funds to it.
It was learnt that the ease with which terror sponsors had been moving money for terror operations through the banks had also made the job more difficult.
“Being persuasive preachers, the terror commanders often persuade some Muslim Ummah to give Zakat to their jihadist cause. This brings in a lot of money used in terror operations. Security agencies are finding difficult to track this because it leaves no paper trail or bank details,” a source stated.
Saturday PUNCH also learnt that some financial institutions were also being unwittingly used to transfer funds meant for terrorist activities by sponsors and sympathisers of these groups, who move such money in bits to avoid detection.
These banks are said to have ignored the provisions of the law to help customers to transfer money in and out of the country without filing the compulsory suspicious transaction reports where necessary.
Under the Money Laundering (Prohibition) Act, 2011, the Terrorism (Prevention) Act, 2011, Central Bank of Nigeria Anti-Money Laundering/ Combating the Financing of Terrorism Regulation, 2009 (as amended) and other AML/CFT Guidelines, banks and other financial institutions must render suspicious transaction reports to the NFIU, properly identify persons conducting transactions and maintain a paper trail by keeping appropriate records of their financial transactions.
The records will enable law enforcement and regulatory agencies to pursue investigations of criminal, tax and regulatory violations and provide useful evidence in prosecuting money laundering and other financial crimes. The legal provisions were designed to help identify the source, volume and movement of currency and other monetary instruments transported or transmitted into or out of Nigeria, or deposited in financial institutions in the country.
The laws impose criminal liability on a person or financial institution that knowingly assists in the laundering of money or fails to report suspicious transactions conducted through it.
Saturday PUNCH learnt that many financial institutions had neglected to file reports of suspicious transactions with the NFIU, in order not to lose the accounts of high profile clients who move huge funds.
Some of these funds are believed to be proceeds of crime or money laundering, one of the sources said.
“Sometimes, the banks assist their clients to transfer huge amounts in small lodgements to avoid filing a suspicious transaction report as mandated by law; we know all these tricks and we are working to deal with them,” the security official said.
Findings indicated that the terror cells also rely on foreign donations from jihadist organisations in Iran, Lebanon, Libya, Yemen and Saudi Arabia camouflaging as charity groups.
NFIU had also expressed concern over the reluctance of banks to file STR, noting that the insurance industry was more compliant with regard to money laundering and financing of terrorism…