Jersey’s role in the worldwide anti-money-laundering effort

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EARLIER this year Jersey made a payment of some £230 million to the Federal Republic of Nigeria. Nigeria is the most populous country in Africa and has the largest economy on that continent. Jersey, a tiny island a world away, received no goods or services in return for the payment it made, but achieved something invaluable.

Paradox follows paradox. General Sani Abacha was a previous president of Nigeria whose vast wealth was matched only by his personal hold on the country. To say that he was rich and powerful is to say the least. To say that at the same time the staffing and budget of the Attorney General’s chambers in Jersey were adequate to deal properly with all of the responsibilities of the office, domestic and otherwise, is to say the most, and at a stretch. Yet battle was joined.

During his presidency, effectively a military dictatorship which operated between 1993 and his death in 1998, Abacha acted in unrestrained kleptocrat mode. There are stories of his men driving convoys of trucks to the national Treasury, loading them with cash and ingots and driving them away. Whatever the truth of those stories, it is certain that Abacha embezzled over $2 billion and that $267 million in funds were laundered through the US banking system and eventually deposited in a Jersey bank account.

It does not take long to speak of the agreement between Jersey, the US and Nigeria for the repatriation of the funds. It took very much longer to unpick the money trails, to secure international co-operation and to litigate the money out of the Jersey bank account. These things took years, and they took degrees of innovation.

I am able to speak about these things from personal experience. As a staff Crown Advocate within the Attorney General’s chambers at the relevant time, together with Crown Advocate Cyril Whelan, I had frontline responsibility for investigating the origins of the stolen funds, their international movements, their history in Jersey and for forging the international relationships necessary to identify the detailed historical itinerary of the funds and secure their return to their rightful owner, the Federal Government of Nigeria.

When Abacha looted the Nigerian exchequer to the tune of hundreds of millions of pounds, times were different both in the international financial world and in this small island.

In the international financial world, the anti-money-laundering and anti-fraud defences were far less rigorous than those which the continuing experience of the years has since put in place across borders.

In this small island more than a quarter of a century ago there did not exist in the public service, or for that matter anywhere else, the experience, the expertise, the resources both financial and human, and infrastructure which were necessary to take on the challenge of major international offending of the sort set by the Abacha case. While in the public sector, with the support of notable Attorneys General of the day (Michael Birt and William Bailhache), we did much to invent the wheel, that is to say to put in place those things necessary to trace assets stolen by powerful individuals in other countries, and to undertake the arduous investigation and litigation through the courts of Jersey and other countries necessary to return the money to the rightful owners. This included establishing contacts worldwide to build and lead an international recovery team and, locally, to steer the necessary forensic accountancy and police activity in ways which had not previously been developed here.

In doing the right thing, Jersey had to spend a great deal of money. Nigeria saw Jersey as an international partner which had worked tirelessly to repatriate the stolen money. It was happy to contribute to the costs of a shared effort – the President of Nigeria said as much when he travelled to Jersey with his entourage, all in tribal robes, specifically to shake us by the hand.

Jersey has continued to build very substantially on practices that we were able to create. We personally have been involved in pursuing further recovery against associates of Abacha and against other powerful kleptocrats such as the former Mayor of São Paulo, in Brazil.

Much history, sweat and tears lie behind the media pictures of big presentation cheques between dignitaries and accompanying sound-bites.

The return of stolen assets is the final step, the culmination of the process of asset recovery. But then a new phase opens back in the original country after repatriation. What then? There are important matters to be considered – how to use the funds most effectively to support the country’s development goals; how to keep the public informed about the decisions taken; how to reassure citizens that the returned assets will be used for development and poverty reduction purposes. These are vital questions, and before one even starts to try to answer them there is a huge question at the threshold: does it display an anachronistic, colonial throwback, misplaced paternalistic, attitude to presume to tell a sovereign nation what to do with its own money even, or maybe particularly, if the sovereign nation in question happens to carry the tag, for better or worse, of being ‘underdeveloped’. Is it fair to proceed on the basis that because the rulers have stolen the money once, conditions must be imposed in order to stop the same thing happening again?

The return of the Abacha loot is tied to three major projects spread across three regions of Nigeria, namely two road projects and a bridge project. The tripartite agreement that has the government of Jersey, USA and the Federal Republic of Nigeria as signatories states in part: ‘The projects on which the funds will be expended will be administered by the Nigeria Sovereign Investment Authority and independently audited. The Federal Republic of Nigeria will establish a monitoring team to oversee the implementation of the projects and to report regularly on progress. The Nigerian government, in consultation with the other parties, will also engage civil society organisations, who have expertise in substantial infrastructure projects, civil engineering, anti-corruption compliance, anti-human trafficking compliance, and procurement to provide additional monitoring and oversight.’

The UN Convention against Corruption (UNCAC), which recognises the return of assets as a fundamental principle of the Convention, is important in this regard. It recognises the principle of making the repatriation of funds conditional on their proper use. There is a recognition that the identification of proper uses is essentially one for the receiving state and that high-profile nature of asset-recovery cases and public attention that usually surrounds asset return will tend to generate expectations regarding the standards of transparency and accountability that should be followed in the application of these funds. Countries that have embraced a policy of openness and transparency have benefitted from this approach. When assets are returned, national authorities can take advantage of the heightened level of public awareness regarding the funds that are recovered. These efforts will help demonstrate that the fight against corruption can be successful and that corruption does not pay.

Jersey received no goods or services in return for the payment of the repatriated sum to Nigeria. In fact, the Island received something more valuable, namely a recognition that it is a jurisdiction able to take the lead in major asset recovery together with the satisfaction of being a key player in the international defences against money laundering. The way the world sees Jersey matters. The way Jersey sees itself matters. These things matter a lot. They matter financially, commercially, socially, politically.

The repatriation of embezzled funds sounds to Jersey’s credit and enlightens both the way in which Jersey is seen on the international stage and the way it can fairly regard itself.

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