British banks are about to start repaying Nigeria a large part of the $1.3bn (£700m) looted from its central bank during the dictatorship of the late General Sani Abacha, according to sources at the UN Office on Drugs and Corruption.
Abacha was Nigeria's dictator from 1993 to 1998, and the gang which surrounded him probably made away with at least $5bn (£2.7bn). The Financial Services Authority (FSA) and the Metropolitan Police estimate that $1.3bn of this came to Britain, a small amount of which has already been returned A Treasury spokesperson would not reveal the sum of money that Britain is returning but added: "I can confirm that legal proceedings are continuing."
Jersey has already returned the $170m of Nigerian money it had which has so far proved to be the product of corruption and fraud, including a $126m deposit routed by Abacha via Switzerland.
In June last year, Olusegun Obasanjo, Nigeria's current elected president, visited the island to commend the authorities on their efforts.
The investigators in Jersey are continuing their probe into Nigerian assets held in the island's banks, William Bailhache QC, Jersey's attorney-general, told The Independent on Sunday. "Our new investigations may take a year."
The return of Nigerian assets, whose value is still to be disclosed, assumes great symbolic significance as the UN Convention against Corruption is set to come into force in the first half of next year.
The African country - whose government has got rich on the rapidly growing income from its booming oil industry, but where 70 per cent of the 130 million people live on less than $1 a day - is estimated to have had $106bn siphoned away between 1996 and 1999. At the end of 2002, Bola Ige, a former Nigerian attorney-general and justice minister who was later murdered, estimated that only about $2.2bn had been recovered from banks outside Nigeria.
According to Econdad - an African non-governmental organisation supported by the World Bank and Oxfam, - Deutsche Morgan Grenfell, Jersey was a principal recipient of illegal Nigerian funds. In London, branches of ANZ Banking, Banque Nationale de Paris, Barclays, Citibank, First Bank of Boston, HSBC, NatWest and Standard Bank of South Africa were among those that held funds looted by Abacha.
Others named by Econdad included Bankers Trust and Merrill Lynch in New York, Goldman Sachs in Zurich, UBS in Geneva and Bank in Liechtenstein.
In the current edition of The Journal of Financial Crime, Abdullahi Shehu, a Nigerian financial expert who now works with the UN, takes a gloomy view of the effectiveness of anti-corruption and compliance measures as they have been proclaimed by the Obasanjo government and imposed on international banks. "Since the government of Nigeria embarked on its recovery of stolen funds in 1998, no single conviction has been secured," he writes. The banks, he adds, "comply only when they realise the cost of non-compliance is higher than doing so."
In 2000, the Swiss Federal Banking Commission named six Swiss banks for not using due diligence in the Abacha affair: Credit Suisse and two of its subsidiaries, Bank Leu and Bank Hoffman; Credit Agricole Indosuez; Union Bancaire Privie; and MM Warburg.
In Britain, the FSA investigated 23 banks identified by Nigerian authorities as receiving money and found "significant control weaknesses". The names of the offending British banks have been kept secret.
"The file is now closed," said an FSA spokeswoman.Reuse content