The lingering disagreement among officials and relevant institutions, Nigeria’s readiness to avert an expulsion by the Egmont Group of Financial Intelligence Units by January 2018 is in doubt, ADE ADESOMOJU reports

Experts have said that without adopting the recommendations of the global anti-money laundering and anti-terrorist financing monitoring body, the Financial Action Task Force,   Nigeria will be blacklisted as a non-compliant and non-cooperative territory.

It is believed that this would give Nigeria the reputation of a money laundering and terrorism financing haven which would impact negatively on the drive for foreign direct investments.

More so, Nigeria’s financial institutions might not be able to carry out corresponding banking with other countries if Nigeria’s name returns to the FAFT blacklist as it was under the military regime.

While Nigeria, through the Nigerian Financial Intelligence Unit, was struggling to become a member of FATF, the Egmont Group of Financial Intelligence Units,   at a plenary of the Heads of FIUs in Macao on July 5, 2017, suspended and disconnected the NFIU from the Egmont Secure Website, a platform used for the exchange of information by members.

Nigeria’s membership of Egmont Group, a network of 154 national Financial Intelligence Units worldwide established in 1995, is pivotal to its struggle to join the FATF as a full member.

According to experts in the global financial system and anti-money laundering struggle, Nigeria is currently not a member of the FATF, but it is bound to adopt and domesticate all the recommendations of the FATF just like other countries.

Although the FATF and the Egmont Group are two separate entities with different  principles and protocols, there seem to be a technical relationship between the two bodies.

In fact, the FATF in its interpretative note to Recommendation 29 which establishes the FIUs, encourages countries to apply to be members of Egmont Group.

This is part of the reasons why failure at Egmont Group implies a failure at FATF and vice versa.

The suspension of Nigeria’s NFIU by the Egmont Group is, thus, a bad omen for Nigeria.

Without an effective FIU, which is a unit established by the recommendation of the FATF (Recommendation  29) a country is considered non-compliant.

Thus, if the current suspension of the NFIU from the Egmont Group is not quickly and appropriately addressed, this may impact negatively on Nigerian’s quest for FATF membership.

In fact, Nigeria has been given a deadline of December 2017 to address all the concerns leading to the suspension or risk an expulsion from the group.

A high-level mission of the global anti-money laundering and anti-terrorist financing monitoring body, the Financial Action Task Force, will be in Nigeria between November 20 and 21 to assess Nigeria’s level of  commitment to the FATF objectives, including full and effective implementation of FATF standards.

Nigeria is also, during the visit by the high-level mission of the FATF, expected to provide FATF members with the assurance that Nigeria is ready to undergo a successful mutual evaluation within three years.

But ahead of the visit by the FATF,  the body, through  the letter by its President, Santiago Otamedi, has warned the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN), that there could be “implications” should Nigeria fail to address the “concerns” which are also part of what led to the suspension of the from the Egmont Group.

The warning letter by the FATF came barely three weeks after the Egmont Group suspended the Nigerian Financial Intelligence Unit from the activities of the group on July 5, 2017.

In the letter, the FATF  told Malami that the issues leading to Nigeria’s suspension from Egmont group, if not addressed before  November 20 when the FATF’s high-level mission would be visiting Nigeria, could lead to “implications” to the Nigeria’s bid to become a member of the body.

Otamendi urged Nigeria to take all necessary measures to address the concerns of the FATF and Egmont Group before the scheduled visit.

The issues

The NFIU was established in June 2004 in compliance with the FATF Recommendation 29.

Part of the NFIU core mandate is to receive, analyse and disseminate information to law enforcement agencies in Nigeria.

The unit, domiciled within the Economic and Financial Crimes Commission but with a measure of operational independence, is also the body responsible for the coordination of all AML/CFT in Nigeria.

The situation leading to Nigeria’s suspension from Egmont Group started when in 2013 an embittered former Director of the NFIU petitioned the group, stating that the unit’s activities were being interfered with by the EFCC and was thus unable to perform its mandate effectively.

But during an on-site visit to Nigeria by the Egmont Group’s committee members on February 5, 2014, the situation was said to have been found not to be as bad as it was reported.

So, it was resolved by the heads of various FIUs to lift the suspension of the NFIU, after the officials of the NFIU, the Office of the AGF and the EFCC chairman engaged with the Egmont Group Executive Committee and gave assurances that the legal framework defining the operational independence of the NFIU vis-a-vis the EFCC was going to be addressed.

It took a period of six months for Nigeria to be restored as a member of the group.

The bid to address the concerns of the Egmont group gave rise to the struggle for making the NFIU totally independent.

And to achieve this, there had been two bills before the National Assembly for the establishment of the Nigerian Intelligence Centre and the Nigerian Intelligence Agency.

Where should NFIU be?

Within the executive arm of government, there are opposing views as to where the NFIU should be domiciled to guarantee its independence in other to meet Egmont Group’s and FAFT’s standards.

While the AGF and the Senate believe that the nation’s FIU should be separated from the EFCC, the anti-corruption agency believes that the FIU should still be domiciled within it.

It argued that the NFIU’s independence could be more guaranteed by a slight amendment to the EFCC (Establishment) Act 2004.

Following the suspension of NFIU by Egmont Group, the Senate on July 27, 2017, hurriedly passed the Nigerian Financial Intelligence Agency Bill after considering the bill for only one week.

The bill sponsored by the Chairman, Senate Committee on Anti-Corruption and Financial Crimes, Chukwuka Utazi, was read for the first time on  July 20, passed second reading on July 25 and was passed by the upper legislative chamber on July 27.

While the bill proposes that the NFIU will be “a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name” it also wants the agency to be domiciled in the Central Bank of Nigeria instead of the EFCC.

But the House of Representatives has yet to consider the bill. Rather it has before it a bill for an amendment to the EFCC(Establishment) Act 2004.

The bill was sponsored by Senator Utazi’s counterpart in the House of Representatives, Mr. Kayode Oladele, who is the Chairman, House Committee on Narcotics, Financial Crimes and Anti-Corruption.

EFCC’s objection

Our correspondent obtained some documents detailing the position of the EFCC and the NFIU in relation to the state of the nation’s FIU.

One of the documents cited Recommendation 29(9) of the FATF Recommendations as recognising the fact that an FIU can be located in a larger entity or established as part of an existing authority.

A check of the interpretative note of the FATF Recommendations confirms this position.

The note on Recommendation 29 reads in part, “The FIU should be operationally independent and autonomous, meaning that the FIU should have the authority and capacity to carry out its functions freely, including the autonomous  decision to analyse, request and/or disseminate specific information. In all cases, this means that the FIU has the independent right to forward or disseminate information to competent authorities.

“An FIU may be established as part of an existing authority. When a FIU is located within the existing structure of another authority, the FIU’s core functions should be distinct from those of the other authority.”

The agitation for a completely independent FIU is actually rooted in the part of the note which reiterates that the FIU should be adequately funded and must have adequate human and technical resources “in a  manner that secures its autonomy and independence and allows it to conduct its mandate  effectively.”

It also kicks against undue influence by providing that an FIU should be able to “obtain and deploy the resources needed to carry out its functions, on an individual or routine basis, free from any undue political, government or industry influence or interference, which might compromise its operational independence.”

The EFCC and the NFIU believe that these provisions have been misconceived by those agitating for a FIU that is standing alone.

They argued that the proposal that a stand-alone FIU would have a governing body, a technical advisory committee, a retinue of staff and various departments and the power to sue and be sued were against “the major principles of Egmont Group, that an FIU should be discreet and should be seen in the scheme of the fight against money laundering and fight and terrorism financing.”

The EFCC and the NFIU contended that “juxtaposing  the arguments with the current status of NFIU, it becomes obvious that the intentions of these people is to whittle down the powers and functions of the NFIU and create a platform for interference in its operations and as earlier mentioned, that FinCen and GIABA clearly advised Nigeria against towing this path.”

They argued that 95 per cent of FIU’s worldwide that are domiciled in larger entities seem to do better than stand-alone FIUs.

They cited this as part of the reasons why countries like the United States of America, the United Kingdom, Canada, France, Germany, Israel, among other world powers domiciled their FIU in larger entities.

They also claimed that the FinCEN, which is the USA’s FIU located in the Department of Treasury, was providing mentorship for the NFIU and had, in the past, kicked against an earlier proposed bill for a stand-alone FIU in Nigeria.

“The FATF and the Egmont Group of FIUs has not queried the current structure of the NFIU and as a result of the robustness in the operations of the NFIU, the Director of the NFIU was appointed by the Egmont Group of FIUs to serve as its representative for the Central and West African Region FIUs, (a position he still maintains)…”

Review of EFCC Act amendment bill

It was learnt that FinCEN had informally reviewed the EFCC Act amendment bill sponsored by Oladele.

Out of about 16 criteria of FATF on the status of the NFIU, the bill needs to address seven which, in the view of the reviewer, were not clear enough.

The review did not fault the location of NFIU under the EFCC but one of reviewer’s concern was that the EFCC Act amendment bill did not have clear provision to guarantee the criterion of the FATF that an FIU when located within another authority should have its functions, processes and resources distinct from those of other authority.

The reviewer also wants the bill to be clearer on the ability of the NFIU to be able to obtain and redeploy the resources needed to carry out is functions free from undue political, government or industry free or interference.

The reviewer also states that the bill is not clear as to which other “unit” with the EFCC is the NFIU meant to disseminate the results of its analysis to.

The EFCC and NFIU believe that addressing the concerns raised by the reviewer by simply altering the relevant provision of the bill to conform to FATF standard would be the speedier means of getting Nigeria restored to Egmont Group.

They believe that submitting a fresh bill or an Act such as the one establishing the NFIA would earn Nigeria an automatic expulsion and would the NFIU would have to submit a fresh application to be a member of the group.

This would then b followed by another round of review of the new  law, which might take a long period to address due to slow legislative procedure in Nigeria especially as the election year draws nearer.

This was said to be the reason why Germany was expelled from the group when it relocated its FIU from one authority to another authority. But the FIU was readmitted within six months having prepared for the consequences of a new legislation before announcing the restructuring to the Egmont group plenary.

AGF backs establishment of NFIA

The AGF has condemned the EFCC’s opposition to the bill for the establishment for the NFIA.

The Special Adviser on Media and Publicity, Mr. Salihu Isah, on August 23, issued a statement on behalf of the minister describing the roles played by the EFCC and its acting Chairman, Mr. Ibrahim Magu, leading to the suspension of Nigeria from Egmont Group as “ignoble”.

Calling for review of the NFIU’s status, he accused the EFCC’s leadership of manipulating and misusing intelligence.

He stated, “The threat of expulsion from the Egmont Group calls for a thorough review of the NFIU and the manner in which the EFCC leadership has manipulated and mis-used intelligence to the detriment of the fight against corruption and financial crime in Nigeria.”

He disclosed that the Vice President, Yemi Osinbajo, who was then acting as President, had set up the Presidential Ad hoc Committee on the Repositioning of the Nigerian Financial Intelligence Unit and Restore Nigeria’s Membership of the Egmont Group and Preparation for the High Level Delegation to Nigeria in November by the Financial Action Task Force.

The committee was headed by Utazi. He commended the Senate for passing the NFIA bill, adding that the House of Representatives “under Mr. Yakubu Dogara  (the Speaker) is therefore urged to take a bold step by taking a cue from the Senate by passing the bill as soon as they return from their recess.”

But the minister’s spokesperson as of Wednesday night had yet to respond to our correspondent’s request for information on Nigeria’s efforts to get restored as a member of Egmont Group.

House of Reps delaying?

When asked the same question and about Nigeria’s preparation for the arrival of the FATF high-level mission, Utazi gave an indication that the House of Representatives could be delaying by refusing to pass the NFIA bill already passed by the Senate.

He said, “The Senate passed the NFIU Bill late July 2019”, adding  “you can find for yourself where the EFCC is standing on that issue”.

He added, “You can go to the House of Representatives and find out what has become of the NFIU Bill that went for second reading during the last plenary in July before we embarked on annual vacation.”

He urged our correspondent to verify if the House was still “keen on that bill” and its “reasons for the reappearance of EFCC Amendment Bill instead of the NFIU bill that meets the demands of the Egmont Group of FIUs and that will facilitate the lifting of suspension on Nigeria.”

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