Combating Money Laundering in Africa: Dealing with the Problems of PEPs

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Notes

1 See FATF, “Money Laundering” available at https://www.fatf-gafi.org/faq/moneylaundering/ (accessed October 10, 2022).

2 FATF Recommendation 19 deals with use of enhanced due diligence measures for business relationships and transactions with natural legal persons, and financial institutions in high-risk countries. Recommendation 19 requires that the enhanced due diligence measures applied should be effective and proportionate to the risks prevalent.

3 Debarment effectively excludes the private sector entity from participating in any future projects funded by governments from the region. This brings about the fear of huge economic loss, prompting the private sector entity to avoid bribe payments to PEPs. Debarment is regarded as an important tool to combat foreign bribery. See OECD 2014.

4 An investigation carried out by the United States Department of Justice in 2014 revealed that Alstom (head-quartered in France) had paid more than US$75 million in bribes to PEPs globally, including in countries in sub-Saharan Africa, to secure projects worth US$4 billion. Alstom pleaded guilty to falsifying its books and records and agreed to pay a fine of approximately US$772 million.

5 Airbus S.E., a company registered in the Netherlands, was found to have paid bribes to PEPs in 14 countries over a period of several years. The bribes were paid to foreign PEPs to obtain orders for the purchase of aircraft. The extensive bribery of foreign PEPs by Airbus came to light in a joint investigation carried out by France, the UK and the United States. One of the victim countries named in the scandal was Ghana.

6 The ACJHR, founded in 2004, is an international and regional court in Africa, and is the primary judicial agency of the African Union.

7 See for instance, the Panama Papers scandal, which exposed how heads of state, celebrities and criminals hid away billions of US dollars in tax havens; the FinCEN investigation which revealed how financial criminals used the banks in the United States to move money worth US$2 trillion between 1999 and 2017 throughout the world; and the case of Isabel dos Santos, the billionaire daughter of Angola’s former ruler, José Eduardo dos Santos, who was sanctioned by the United States in 2020 for her involvement in significant corruption by misappropriation of public funds for her personal benefit.