All Hat and No Cattle The scandal of the West’s anti-money-laundering regulations

1. All Hat and No Cattle The scandal of the West’s anti-money-laundering regulations Nicholas Hildyard, Co-Director, The Corner House Presentation to Conference on Agenda Setting for Citizens' Interaction with Stolen Assets Recovery Abjua, 3rd July 2019

2. All Hat and No Cattle?

3. The UK’s Egregious Record • Despite huge volume of dirty money passing through London, few banks have been prosecuted or convicted for money laundering . • No senior bank executive has been jailed or prosecuted. • The fines imposed in UK are a fraction of those imposed in the US. • The UK government successfully lobbied the US NOT to prosecute HSBC for money laundering.

4. Not Fit for Purpose • Anti-money laundering supervision in the UK is fragmented. • Companies House isn’t even required to carry out anti-money laundering checks. • Facilitators and enablers of money-laundering (such as estate agents) are poorly policed, • The Suspicious Activity Reporting system – designed to prevent suspicious transfers – is broken. • Promised legislation to require overseas companies owning property in the UK to declare their beneficial owner has been delayed.

5. Pusillanimous Enforcement: OPL 245 • Police investigation terminated. • Crown Prosecution Service reportedly reluctant to take on Shell. • UK failed to seize assets arising from the case.

6. Anti-Money Laundering Promiscuity: The JP Morgan Chase OPL 245 transfers 25 May 2011, instructions from FGN to transfer US$1,092,040,000 to Petrol Service Co. Ltd. No Suspicious Activity Report (SAR) lodged. 3rd June 2011, transfer is rejected by BSI Bank in Switzerland "for compliance reasons" 25 July 2011, instructions from FGN to transfer US$801,540,000 to Malabu’s account with Banque MisrLiba Sal in Lebanon. SAR submitted and consent granted. 10 August 2011, transfer refused by Lebanese bank. 16 August 2011, instructions to transfer $401,540,000 to Malabu's account with First Bank of Nigeria plc in Nigeria and $400,000,000 to Malabu's account with keystone Bank Nigeria Limited in Nigeria. SAR submitted and consent granted. Transfer goes through.

7. What the JP Morgan (and the UK authorities) knew – and yet let the money go

8. What JP Morgan (and the UK authorities) knew • Etete was “a former Minister of Petroleum in Nigeria from 1995-1998 under the regime of the late President Sani Abacha”; • “Malabu is owned or substantially owned by Daniel Etete”; • “Etete was fined for money laundering by an Appeals Court in Paris on 18 March 2009”; • BSI was "'not comfortable' receiving the funds due to the beneficiary"; • "There is a lack of transparency around the beneficial owner(s)” [6] of Petrol; and • "Research does suggest that the beneficial owner(s) of Petrol may have a connection to a former Nigerian PEP”.

10. New Alliances and Strategies • Nationally and internationally: end impunity by prosecuting the management of international companies and banks implicated in corruption. • South-South: strengthen alliances with other developing countries committed to combatting corruption in order to gain more traction in negotiations over the return of assets. • North-North: build broad social movement for institutional reform in the North. • South-North: strengthen collaboration between civil society groups combatting corruption and prosecutorial agencies.