My Thoughts on the Constitutionality or Otherwise of the New AMCON (Amendment) Act 2019
JIntroduction ust recently, the Federal Government under the administration of President Muhammadu Buhari, passed a bill into law, the AMCON Amendment Act, 2019, empowering the Corporation to: “obtain any access to any computer system component, electronic or mechanical device of any debtor, with a view to establishing the location of funds belonging to the debtor, and to obtain information in respect of any private account together with all bank financial and commercial records of any debtors of any eligible financial institution, banking secrecy, and the protection of customer confidentiality, is not a ground for the denial of the power of the corporation under the section”. AMCOM is to use the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission, (ICPC) and the Ministry of Justice, as tools in achieving these aims and objectives contained in the said Act.
The major highlight of this Act therefore, is that it empowers the Agency/ Corporation to access the financial details of debtors. The agency can now place bank accounts of debtors, under surveillance. The new law empowers AMCON to by-pass any legal or procedural restriction, specifically those protecting banking details of debtors, so that the agency can gain access to such records.
Aside from the above, the new law according to Senator Ita Enang, the Presidential Aide on National Assembly also provides that: ‘’All money standing to the credits of the corporation in any bank account, is deemed to be in the custody and control of the corporation. Where any proceeding is pending in any court of competent jurisdiction by or any, the corporation, the grant of any interim, interlocutory or preservative order of attachment against the corporation’s funds in any bank is prohibited. The corporation may require any eligible financial institution from which it has acquired an eligible bank asset or any director, manager or officer of such eligible financial institution to furnish information and produce documents, books, accounts and records in relation to any eligible bank asset acquired by the corporation from such eligible financial institution or in relation to the borrower or other obligator connected with such eligible bank asset”.
Sequel to the above provisions of the AMCON (Amendment) Act 2019, it is important to look at the legal approach of using these agencies of the Federal Government of Nigeria by AMCON, in the recovering of these debts from debtors.
As courageous, necessary and expedient as this particular law may appear to be, does it border on glaring instances of unconstitutionality, disregard for rule of law, and breach of fundamental human rights issues that have plagued most of the laws enacted by this administration?
It is therefore, apposite to juxtapose the AMCON (Amendment) Act, 2019 with the Constitution of the Federal Republic of Nigeria, 1999 as altered, other relevant laws and judicial authorities, and international best practices.
Constitutionality of AMCON (Amendment) Act 2019, vis-a-vis the 1999 Constitution and Other Related Laws
The Constitution of the Federal Republic of Nigeria, 1999, as altered, is the grundnorm of all other laws of Nigeria, including the said AMCON (Amendment) Act, 2019, and by implication, every law must find its origin in the Constitution.
The Constitution is also the supreme law of the land as highlighted in Section 1(1) which provides:
1. (1) This Constitution is supreme and its provisions shall have binding force on the authorities and persons throughout the Federal Republic of Nigeria. Sub-section 3 of the above mentioned Section 1 also provides that: (3) If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void.
Important to note is that, many of the provisions of the AMCON (Amendment) Act 2019, which empowers the agency to gain access into the personal accounts of individuals (debtors), access his/her personal details, and even take possession of funds in those accounts autonomously, are inconsistent and run at parallel with Sections 37 and 44 of the Constitution, which seek to protect the privacy of citizens and deter compulsory acquisition of their movable and immovable property by any agency, without adequate compensation.
It is against the rule of law and is also unconstitutional, that an agency could be empowered to arbitrarily access and possess the funds in a debtor’s personal account, without first securing an appropriate order of a court of law.
Section 50 (1) of the AMCON Act, 2010, is certainly unconstitutional. The section provides that:
“Where the Corporation has reasonable cause to believe that a debtor or debtor company has funds in any account with any eligible financial institution, it may apply to the Court by motion ex-parte for an order freezing the debtor or debtor company's account”.
The above section, together with Section 50(2) which provides that the Corporation shall commence debt recovery action against a debtor or debtor company whose account has been frozen by a court order issued under subsection (1) of this section within 14 days from the date of the order, failing which the order shall lapse, appear self-contradictory and self-destructive.
How do you first freeze a customer’s account, and then proceed to recover your debt? The customer is placed at a grave disadvantage, as he cannot reasonably fight his case and cause.
Bear in mind that the old AMCON Act of 2010 which was created for the purpose of effectively resolving non-performing loans, assets of banks and other institutions in Nigeria, was never the problem or the reason why the Agency failed woefully in recovering the humongous debts of over N5 trillion. Rather, it was the failure of the Agency to act swiftly to commence the debt recovery, after securing an interim order freezing the debtor’s accounts. They should now act with more speed.
To continue on the path of the new AMCON (Amendment) Act 2019, is to cause more chaos, especially when the funds in the account of the debtor happens to be subject of another court proceeding. Hence, the case of RHEIN MASSUND SEE & ORS v RIVWAY LINES LTD (1998) 4 SC 73, where the Court held that, the purpose of making an ex-parte order is to preserve the res, prevent its dissipation, pending when all the parties can be heard.
These government anti-graft agencies are not empowered by the laws creating them or in any laws in Nigeria, or power to recover money from debtors, except for monies obtained through fraud or financial malpractices, which is not the position here.
Section 6, of the Economic and Financial Crimes Commission (Establishment) Act 2004, clearly spells out the special powers to be exercised by the Commission, which relate to offences of crimes, money laundering, malpractices and fraud, and nothing more. It is not even empowered to engage in recovery of debt or enforcement of a contract, more so, a contract which the agency is not privy to.
Following the above provisos, if there are no traces of financial or economic crimes in the disbursement and repayment of loan and/ or debt, the EFCC does not thereby, have any legal power to exercise in the recovery of the debt, which is purely a civil contract between two parties. Such a contract is not in nature, criminal in any form.
In the same vein, the ICPC ACT 2000, does not also empower the Commission to recover debts for government agencies, when they are purely matters of contracts.
Under Nigerian laws, the EFCC, ICPC, Ministry of Justice and any other government agency in Nigeria, are not regarded as debt recovery agencies. In the recent Supreme Court case of Diamond Bank PLC v H.R.H. EZE (Dr) Peter Opara & Ors (2018) LPELR-43907(SC), the Apex Court held thus:
“The EFCC has an inherent duty, to scrutinise all complaints that it receives carefully, no matter how carefully crafted by the complaining party, and be bold enough to counsel such Complainants to seek appropriate/ lawful means to resolve their disputes.
Alas! The EFCC is not a debt recovery agency, and should refrain from being used as such”.
In the past few years, we have encountered situations where creditors engage the services of the Nigeria Police or the Military to recover their debts from debtors through means of arrest, torture or intimidation, after the creditor must have reached an agreement with the agency on a certain amount of percentage that is due to them.
In the case of OGBONNA v OGBONNA (2014) LPELR-22308 CA (2014) 23 WRN 48, one of the issues for determination, was whether the EFCC, ICPC, POLICE and other law enforcement agencies are debt recovery agency in Nigeria. The Supreme Court, after a careful consideration, held; “It is important for me to pause here and say here that, the powers conferred on the third Respondent i.e., EFCC, to receive complaint and/or fight the commission of financial crimes in Nigeria pursuant to Section 6(b) of the EFCC ACT, does not extend to the investigation and/or resolution of disputes arising or resulting from simple contracts on civil transaction, as in this case”.
It is correct to state that, the passing of the ACT into law amounts to gross infringement on the fundamental human rights of the debtors, as enshrined in Chapter 4 of the Constitution of Federal Republic of Nigeria, 1999, as altered. Any law which is inconsistent with the provisions of the Constitution, shall, to the extent of its inconsistency, be null and void. See Section 1(3) of the Constitution.
Having regard to the bank/customer relationship in line with international best practices, a bank is not empowered to allow a customer’s account to be accessed or tampered with by a third party, not to talk of transacting or withdrawing money from the customer’s said account.
Consequently, the introduction and passing into law of this Act by the Federal Government, does not only offend the laws governing the operations of banks, but also offends some provisions of the Constitution of the Federal Republic of Nigeria 1999, as altered, the very grundnorm. Consequently, the said provisions of the AMCON Act, are null and void.
THOUGHT FOR THE WEEK “The happiness of society, is the end of government.” (John Adams).
“IT IS AGAINST THE RULE OF LAW AND IS ALSO UNCONSTITUTIONAL, THAT AN AGENCY COULD BE EMPOWERED TO ARBITRARILY ACCESS AND POSSESS THE FUNDS IN A DEBTOR’S PERSONAL ACCOUNT, WITHOUT FIRST SECURING AN APPROPRIATE ORDER OF A COURT OF LAW”