UK banks warned over Nigerian money

Abacha also held bank accounts in the US and Austria

The Financial Services Authority (FSA) has found that 15 UK banks were guilty of "significant control weaknesses" in their anti-money laundering controls.

The watchdog launched a probe after the Nigerian Government asked for the UK's help in trying to recover money allegedly moved out of the country by former Nigerian President General Sani Abacha.

The extent of the weaknesses identified is frankly disappointing

Phillip Thorpe
FSA

Seven of the 15 banks have been ordered to rectify the weak controls and given strict deadlines to do so.

The other banks have already taken action to improve their controls.

The FSA estimates the turnover of transactions in the UK accounts amounted to about $1.3bn during 1996 and 2000.

New powers

The FSA investigated a total of 23 banks in the UK, none of which can be named.

"The extent of the weaknesses identified is frankly disappointing," said Phillip Thorpe, managing director of the FSA.

"Potential breaches of the Money Laundering Regulations are also being discussed with the appropriate law enforcement authorities," said Mr Thorpe in a statement.

New powers to enforce anti-money laundering rules come into effect later this year, and the FSA has warned that they will be rigorously applied.

The investigation discovered 42 personal and corporate account relationships linked to Abacha family members and close associates in the UK.

Frozen out

Nigeria's current government has been going to great lengths to try to recover the money looted by Abacha and his associates.

Switzerland and Liechtenstein have, at Nigeria's request, frozen hundreds of millions of dollars in bank accounts traced to the former president's family.

The Swiss Federal Banking Commission says almost a third of the money deposited with Swiss banks had first been banked in the UK, US and Austria.

General Abacha ruled Nigeria from 1993 until his death in 1998.

According to the current Nigerian Government, he used a circle of family members, close aides and business associates to disperse the stolen cash.

It was allegedly amassed by awarding contracts to bogus companies, accepting bribes and siphoning money directly from the Nigerian treasury.