South African financial institutions doing business with Nigeria run the risk of tarnishing their reputations, Parliament’s finance portfolio committee heard on Wednesday.
The West African country was on the blacklist of the international Financial Action Task Force (FATF), the director of South Africa’s Financial intelligence Centre, Murray Michell, told members.
The FATF, comprising 31 member states, is an international body aimed at countering money laundering and the financing of terrorism. South Africa has recently assumed the presidency of the FATF.
Michell said only three countries — referred to as NCCTs, or Non Co-operating Countries and Territories — were presently on the FATF’s blacklist. These were Myanmar, Nauru and Nigeria.
He warned such a listing should ”force a bank in South Africa to think more than twice about whether it’s going to transact with a bank which is registered in a country on this list”.
If a local bank had a transaction with such a country, other international banks could say ”we’re not prepared to work with you, who has been working with that designated country, because you are now vulnerable, and we can’t trust the transaction or the source”.
Such transactions with listed countries created at best a reputation risk, and at worst ”there might well be mysteriously dirty money flowing here”.
Michell said Nigeria had been blacklisted in 2001, but was making ”strenuous efforts” to have itself delisted.
”[It has] put in place measures to meet the standards — it’s passed legislation, it has created a working group reporting directly to the president, [and] it has put in place serious resources to deal with this problem.
”It remains on the list, [but] I would be hopeful -‒ during South Africa’s presidency of the FATF — we might be able to reach a stage where Nigeria can come off the list,” he said.
The FATF is chaired by member of Parliament and former education minister Kader Asmal, who assumed office about seven weeks ago.
Speaking at Wednesday’s briefing, Asmal said it was vital Nigeria be helped in its endeavours to get off the blacklist. – Sapa