BUHARI’S ANTI-MONEY LAUNDERING BILL

The bill makes a strong case for building viable systems based on transparency, honesty and accountability, argue Okechukwu Emeh and Shamsuddin Daura

At the root of most economic and financial crimes are the proceeds, which are often laundered through lodging in financial and nondesignated financial institutions or investment in legitimate business ventures. According to Oxford Advanced Learner’s Dictionary (International Student’s Edition), laundering involves moving money that has been obtained illegally into foreign bank accounts or legal businesses so that it is difficult for people to know where the money came from. The range of illicit activities whose proceeds can be laundered include corruption, sleaze, fraud, drug peddling, crude oil theft, currency counterfeiting, document forgery, unauthorised exploitation of mineral resources, human trafficking, the so-called baby factory, armed robbery, kidnapping, smuggling and trade in endangered species, stolen arts and archeological artifacts. In most cases, money originating from such activities is very difficult to trace except by financial crime investigative experts.

There is no doubt that the campaign to constrain and control economic and financial crimes in Nigeria is gathering momentum under the present administration of President Muhammadu Buhari. In a way, this campaign has international correlation and can be observed at this critical period of globalisation, globalised economy and market reforms when commitment to sanitising public sector and business environment is at the core of the drives to reverse the sluggish economies of many countries, especially those in the sub-Saharan Africa. In this regard, international financial institutions (IFIs), specially the World Bank and the International Monetary Fund (IMF), along with the United Nations (UN) and the European Union (EU), have emphasized at various fora the paramount importance of combating economic and financial crimes. In particular, the IFIs have made signing of global transparency and integrity compliant protocols like the one of Financial Action Task Force (FATF) an essential precondition for countries to receive their economic clean bill of health and financial advice or assistance. This is owing to the ineluctable fact that such crimes are at odds with the post-Cold War efforts to steer developing countries towards economic rejuvenation and sustainable development. For example, in many peripheral economies in sub-Saharan Africa, including Nigeria, economic and financial crimes have, amongst others, led to economic growth without development and equity, mass deprivation and the attendant abject poverty, social discontent and crime and insecurity, destabilisation of viable and credible process of transparency and accountability in both public and corporate governance, loss of capacity utilisation, capital flight, lull in entrepreneurial ability, institutional decay, unfavourable external image and the resultant decline in foreign direct investments (FDIs) and visa problem.

In recent years, the emerging international regimes or conventions against economic and financial crimes include the institutional frameworks of FATF, and the Global EGMONT Group of Financial Intelligence units (FIUs). Instructively, FATF was set up with the prime objective of waging a worldwide campaign against economic and financial crimes, as well as illicit flow of money from trafficking in hard drugs and arms. So far, many countries have signed the protocol initiated by this Paris-based international body. One FATF – style regional body (FSRB) which Nigeria is a member is the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), a specialised institution of the Economic Community of West African States (ECOWAS) based in Dakar, Senegal. In essence, GIABA is charged with facilitating the adoption and implementation of the Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) rules in the sub-region, along with ensuring compliance with international AML/FCT standards.

As a signatory to the protocols of FATF and the Global EGMONT Group of FIUs, Nigeria took a bold step to establish the Economic and Financial Crimes Commission (EFCC) in 2002. Since then, EFCC has made substantial progress in its unrelenting and determined efforts to curb economic and financial crimes, with many of the offenders being hunted down and jailed by the commission. Gladly enough, such efforts have resulted in Nigeria being delisted by FATF from the risk of countries that are prone to financial crimes.

In view of the impelling necessity of strengthening the campaign against money laundering, terrorist financing and other unlawful activities that could threaten and undermine our financial system and national security, the National Assembly in 2014 proposed a bill seeking to establish the Nigerian Financial Intelligence Centre (NFIC). The bill, which was separately initiated and thoroughly debated at both the Senate and the House of Representatives, reviewed certain provisions of the EFCC Act, as well as amended the Money Laundering (Prohibition) Act, by transferring the operations of the Nigerian Financial Intelligence Unit (NFIU) against money laundering currently domiciled in EFCC to the proposed NFIC. Unfortunately, the lawmakers of the 7th National Assembly could not pass that all-important bill before leaving office last year.

However, another hope to tackle money laundering cases in Nigeria has been rekindled by President Buhari, who recently sent the “Money Laundering (Prevention and Prohibition) bill 2016” to the National Assembly for consideration. In analysis, the bill seeks to establish Bureau for Money Laundering Control (BMLC), which would be independent in the discharge of its functions and responsibilities. According to the “Money Laundering (Prevention and Prohibition) bill 2016”, any perpetrator of the crime is defined as “a person who knows, ought reasonably to have known or suspects that property has a criminal origin, commits an offence, if he conceals, disguises, converts, transfers or removes the property from Nigeria.” The bill prescribes stiff penalty for anybody found culpable of the offence and upon conviction shall be an imprisonment for a term of not less than seven years without the option of a fine. Under the “Money Laundering (Prevention and Prohibition) bill 2016”, any bank that is found guilty of money laundering would be liable for the fine of not less that N25 million and a designated non-financial business and profession would get a fine of not less that N10 Million if found guilty of the offence. The proposed bill also stipulates three years imprisonment or above for anybody that fails to report persons involved in the illicit act.

It is self-evident that Buhari’s anti-money laundering bill is in tandem with the urgent necessity to establish a formidable financial intelligence body to combat money laundering, terrorist financing activities and other predicate offences in Nigeria. Such a body --- as required under the Money Laundering (Prohibition) Act 2012 (as amended), the Terrorism (Prevention) Act 2013 (as amended) or any other relevant law or regulation --- would have mechanisms for sound policy and decision – making requiring adequate, quality and timely information analysis necessary for tracking and choking off the flow of proceeds from illicit activities that could impact negatively on our economy and national security in a more deeply or rapidly way. It is expected that the proposed BMLC would be an essential anchor for monitoring and undertaking studies and risk assessments on emerging techniques and patterns in money laundering, terrorist financing and other unlawful financial activities, as well as serve as a tool for providing information to the federal government on financial flows into and out of the country that will be shared with financial regulatory authorities and security agencies. The bureau, as a form of an independent Nigerian FIU, is also expected to function without any encumbrance, in accordance with the provisions of the international anti-fraud regimes of FATF and EGMONT Group of FIUs. Furthermore, the proposed agency would play a central role in establishing an effective and efficient system to arrest money laundering, terrorist financing and related crimes, especially if premised on independent operation, adequate funding, deployment of technology, confidentiality, security of information, credibility, cooperation of anti-money laundering regulatory, law enforcement and security agencies and international best practices. Besides assisting in coordination of various institutions involved in fighting economic and financial crimes, BMLC would ensure exchange of mutual information between member states of EGMONT Group of FIUs in a more timely and efficacious manner.

Emeh, a social researcher, and Daura, a public affairs analyst, wrote from Abujaa