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Nigerian crime is pressing problem for UK, says report
20 November 2006
Nigeria-related financial crime has become a large and pressing problem for the UK authorities. Internet scams, cheque and credit card fraud, money-laundering and immigration and identity paper fraud - as well as corruption involving both Nigerian officials and British companies - are often going unchecked, because of a shortage of resources and a failure by both governments to live up to their promises to tackle graft. These are the main findings of Nigeria-Related Financial Crime and its Links with Britain by Michael Peel, a major new report published today by Chatham House.
Criminal activity is carried out by a small minority of Nigerians, relative to the size of the country and the number of its nationals resident in Britain or visiting it. But the numbers of people involved are still significant and their success reflects wider political and logistical shortcomings with the way the British authorities deal with financial crime. In addition, many British nationals and companies still perpetuate corruption in Nigeria: executives say bribe-paying remains common, and the British government has yet to launch a single prosecution under a 2001 law that explicitly prohibits the bribery of foreign public officials.
Nigerian financial crime has grown in significance partly because it is not seen in Britain as a priority problem, the report argues. The country has a booming oil industry, but most of its people are very poor. Criminal networks - often involving influential and high-profile people - have thrived because of their ability to exploit loopholes in the law and because of the porousness of the UK's borders. Nigerian passport-holders who are deported over their role in scams often pop up again in Britain, involved in the same sorts of crimes as before. The UK has also become a 'staging post' for international mail crime, which involves transporting fraudulently purchased goods, often from the United States, to Nigeria.
The report concludes that enforcement officers, agencies and the private sector are often poorly coordinated and hold little information on Nigeria-related fraud and corruption. This means that information and exact numbers involved are extremely vague, but the sums of money are significant and have almost certainly run into billions of pounds over the past ten years. Further, high levels of Nigeria-related financial crime are very damaging to the image and standing of the many Nigerians who live honestly in Britain or visit the country to do legitimate business.
Some of the key issues the report highlights include:
• In a 2004 survey of about 220 packages sent from Nigeria to the UK, HM Revenue and Customs discovered forged cheques with a total face value in British and foreign currency of about £46.1 million.
• On a single day check at Heathrow airport in 2005, police discovered more that £20 million of forged cheques and postal orders in the courier mail from Lagos.
• In one incident last year at a parcel centre in Coventry, Customs officials reported seizing £1,078,739 in cheques concealed inside a single handbag.
• It has been estimated that Nigerian-style advance fee frauds - in which, for example, the fraudster sends an e-mail seeking help in spiriting looted funds out of the country - costs the UK economy £150 million annually, with the average losses per victim £31,000.
• Nigeria's Economic and Financial Crimes Commission (EFCC) estimates that in its first four years of operation it recovered £2 billion of criminal money, part of it linked to criminality in Britain and other foreign countries.
• Critics say Britain's performance on money-laundering and corruption is still laggardly, especially given that an estimated £25 billion pounds a year is laundered in the country.
• It is not known how many Nigerian nationals live in Britain, although Jack Straw told an audience in Nigeria in 2006 that there are 'said to be over a million'. A British survey estimated that 13% of Nigerian applications for visitors' visas and at least 17% of student visas involved the use of some kind of fraudulent documentation.
The report's 43 recommendations include:
• Britain should establish a mechanism for coordinating reports of Nigeria-related fraud in Britain, perhaps through the central fraud investigatory body proposed under the government's ongoing review.
• The Serious Organized Crime Agency (SOCA) should, as a high priority, ensure it makes clear to banks how the new suspicious transaction reporting regime should work. Once it has done a preliminary analysis of the suspicious transaction reports, SOCA should share the information as widely as possible, highlighting the involvement of Nigerian officials and business people, and British companies.
• It is important for the credibility of Britain's anti-corruption policies that it launches successful action soon against a British company or individual in Nigeria.
• British law enforcement agencies and the Financial Services Authority should establish better links with their Nigerian counterparts to improve the practicalities of cooperation in fraud and corruption cases.
Michael Peel, author of the report said: 'The scale and scope of Nigeria-related financial crime highlights critical wider failures in the way the British authorities tackle fraud, corruption and money-laundering. Despite important but limited reforms, criminal networks and corporate bribery still flourish. This raises questions about how sincere the governments of both countries are in their talk of change, particularly when significant political, commercial or energy interests are at stake.'
Notes for editors:
Nigeria-Related Financial Crime and its Links with Britain by Michael Peel, is published on Wednesday 15 November 2006 by the Africa Programme, Chatham House.
Michael Peel is Legal Correspondent for the Financial Times. Between 2002 and 2005 he was based in Lagos as the west Africa correspondent of the Financial Times. In 2005-6, he was an Associate Fellow of Chatham House.
Interview bids:
Michael Peel
+44 7711 436 838
Sam Hardy
Press Office, Chatham House
+44 20 7957 5739
+44 7946 642 205
Keith Burnet
Press Office, Chatham House
+44 20 7314 2798
+44 7714 200 920
Chatham House is one of the world's leading organizations for the analysis of international issues. It is membership-based and aims to help individuals and organizations to be at the forefront of developments in an ever-changing and increasingly complex world.
The Africa Programme at Chatham House aims to develop foreign policy-orientated research on issues affecting individual states of Africa, the African continent as a whole and their relations with the outside world.
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