Financial Crime World

Shell Games: The Illicit Use of Corporate Vehicles in Liberia’s Economic Underworld

amid Liberia’s efforts to revive its economy and attract foreign investment, a hidden enemy continues to undermine its growth: financial crime, particularly the illicit use of shell companies. This article sheds light on this issue, inspired by the National Crime Agency (NCA)’s recovery of $8 million linked to international organized crime and the prevalence of such activities in Liberia as revealed in various news reports.

The Threat of Shell Companies

The pervasive use of shell companies – corporations without physical presence or significant assets that often exist only on paper – contributes significantly to illicit financial flows, estimated at over $2 trillion globally each year. In Liberia alone, tax evasion, fraud, bribery, and corruption are major offenses used to launder money.

  • Shell companies allow for anonymity
  • Contribute to illicit financial flows
  • Major offenses used for money laundering in Liberia

Exploiting the Anonymity

Foreigners and locals alike have been exploiting the anonymity offered by shell companies for various illegal activities.

Foreign Activities

  • Funding terrorism
  • Shielding funds from taxation
  • Masking proceeds from illegal businesses
  • Concealing assets from law enforcement

Local Activities

  • Concealing income from tax authorities
  • Colluding with corrupt officials
  • Transferring funds abroad

Preventing Criminal Activities

To combat the criminal use of shell companies, Liberia needs a multi-pronged approach.

Government Institutions

  • Financial crime analysis and investigation
  • Liberia Business Registry
  • Ministry of Commerce and Industry

Strengthening Regulations

  • Joint investigations
  • Strengthened laws and regulations
  • Enhanced enforcement capabilities
  • Improved communication systems

Business Registry Measures

  • Stringent business registration measures
  • Verification of ownership information
  • Availability of beneficial ownership details

Transfer Regulations

  • Strengthened regulations on business income transfer
  • Prevention of unlawful transfer of funds abroad

The Continuous Battle

The battle against financial crime is a continuous one. While governments try to recover stolen assets and prosecute perpetrators, the emphasis must be on preventing such activities in the first place.

Expert Insight

Alexander Cuffy, a financial crimes specialist and senior Business Development Consultant at Alan Bernard International, shares his insights on the issue.

  • Previously headed the development, administration, and monitoring of the Anti-Money Laundering (AML) program in Liberia as the head of the Financial Intelligence Unit (FIU)

[Alexander Cuffy’s Bio] (Previously, he headed the development, administration, and monitoring of the Anti-Money Laundering (AML) program in Liberia as the head of the Financial Intelligence Unit (FIU). Currently, he is a financial crimes specialist and senior Business Development Consultant at Alan Bernard International.)