Wealthy Nigerians on edge over NFIU searchlight – TheNigerialawyer

Uche Usim

Recalcitrant tax defaulters, high-end politicians, top civil
servants, businessmen and other wealthy Nigerians with questionable
sources of income are now in panic mode as the Nigerian Financial
Intelligence Unit (NFIU) and other anti-graft agencies began
beaming their searchlight on them in line with the Federal
Government’s effort to retrieve state funds tallegedly siphoned in
shady transactions.

Their mounting anxiety is coming from the Unit’s recent
directive to Deposit Money Banks(DMBs) to immediately release the
account details of all legislators (including Senate and House of
Representatives) and judicial officials in the country.

The NFIU, in a letter dated September 10, 2019 and signed by
Fehintola Salisu, NFIU Associate Director, Analysis and Compliance,
directed Chief Compliance Officers of banks to furnish it with
account names, numbers and transaction details of the top civil
servants.

Though the reason for the sensitive request was not expressly
stated in the letter, it may not be unconnected with the unit’s
recent moves to clampdown on those involved in financial graft of
gargantuan proportions.

The agency also sought the account details of members of the
National Judicial Council (NJC).

Although it listed judges and National Assembly members as well,
there was no mention of any member of the executive arm of
government.

The letter read: “Request for information on: All accounts of:
the National Assembly, National Judicial Council (NJC), all the
members of the National Assembly, principal officers (management)
of the National Assembly Service Commission, (and) of principal
officers of the judiciary.

“Kindly provide the NFIU with a schedule (account names and
account numbers) of the National Assembly, members of the National
Assembly and principal officers of the National Assembly Service
Commission, as well as all accounts of National Judicial Service
Commission and their principal officers including judges and other
relevant politically exposed persons.”

The NFIU, headed by Hamman Modibbo Tukur, directed the banks to
forward the information on or before Friday, September 13,
2019.

As soon as the memo leaked to the public, sources said various
banks were inundated with calls from anxious customers who sought
to know how the events would pan out.

But while that simmered, it was gathered that the NFIU came
under intense pressure from influential politicians to recant on
the memo and in 24 hours, the agency denied asking banks to release
such sensitive details of customers to it.

Still not done, it released another statement within 48 hours
vehemently denying any plans to probe the Senate President, Ahmed
Lawan; Speaker, House of Representatives, Femi Gbajabiamila, other
top legislators and high-ranking judges.

The NFIU in a statement signed by Ahmed Dikko, its Chief Media
Analyst said: “We have noticed that while some individuals who seem
to be favourable to the government are creating the wrong
impression that the opposition is using the NFIU, those in the
opposition seem to be speaking through some Non-Governmental
Organisations (NGOs) and insinuating that government is using the
NFIU to its political advantage. Both positions are not only untrue
but patently unimaginable.

“It has become necessary that the officer who initiated the
request was obviously unacquainted with the fact that the NFIU
already had access to such information through its database.

“It is also pertinent to note that the NFIU has the major
responsibility, in accordance with global standards, to maintain
and regularly update the list of Politically Exposed Persons
(PEPs). It will be recalled that a new government was inaugurated
in May 2019. The officer who initiated the unauthorised letter was
also taking the initiative to update the PEPs list. “The list
includes politicians and political appointees in all organs of
government. The update exercise which is a regular practice in
order to protect public funds and other assets is also in
accordance with global best practice.

“For the avoidance of doubt, their excellencies, the Senate
President, the Speaker of the House of Representatives, and the
Chief Justice of the Federation, as well as Senators, members of
the House of Representatives, Justices and other members of the
judiciary are NOT under investigation by the NFIU.

“We appeal to members of the public that it is needless to make
political capital out of this as the entire country is just one
co-signatory with other 164 members of the FIU process”, he
said.

Dikko added that the NFIU, having been aware that the leaked
letter was not subjected to the appropriate level of authorisation
before transmission, the NFIU has commenced investigation to
unravel the persons and factors that led to the inadvertent
circumvention of its internal process in the isolated case with a
view to applying appropriate sanctions as deterrence.

A second generation bank spokesperson who craved anonymity said
some top depositors have become restless since the memo leaked.

“The truth is, whether NFIU sent us a memo or not, the NFIU has
access to our operations. They have us on their dashboard. We
always cooperate with them. Anyone they want to investigate with
regards to alleged money laundering, funding terrorism, etc, we
open our books.

“Don’t forget that the IFU accused Nigeria of not doing enough
to tackle illicit financial flows and other financial crimes. It
culminated in making the NFIU autonomous.

“Their work is sensitive. It has national security implications.
Any bank that doesn’t cooperate will have itself to blame”, he
said.

The NFIU’s operations went full blast in 2018, after President
Muhammadu Buhari accented to a bill that split it away from the
Economic and Financial Crimes Commission (EFCC) to make it
autonomous in line with global standards.

The NFIU largely draws its powers from the Money Laundering
(Prohibition) Act 2011 as amended in 2012 and the Nigerian
Financial Intelligence Unit Act, 2018. The core mandate of the NFIU
as required by international standard is to serve as the “national
center for the receipt and analysis of: suspicious transaction
reports; and other information relevant to money laundering,
associated predicate offences and terrorist financing, and for the
dissemination of the results of the analysis to law enforcement and
anti-corruption agencies.

Other duties include; receive currency transactions reports,
suspicious transactions reports, currency declaration reports and
other information relating to money laundering and terrorist
financing activities from financial institutions and designated
non-financial institutions; receive reports on cross-border
movement of currency and monetary instruments; maintain a
comprehensive financial intelligence database for information
collection, analysis and exchange with counterpart FIUs and law
enforcement agencies around the world; advise the government and
regulatory authorities on prevention and combating of economic and
financial crimes; provide information relating to the commission of
an offence by entities and subjects linked to another jurisdiction
to foreign financial intelligence unit based on the membership of
Egmont Group or on the basis of bilateral cooperation, among
others.

However, experts say the reason for the renewed searchlight on
wealthy Nigerians is not far-fetched; Nigeria may technically be
out of recession, but the recovery is slow as the economy remains
fragile and susceptible to external shocks like a sudden slump in
oil price.

They reckon that the worrisome reality has pushed the government
into a desperate mode as it battles to pump money into the economy
to stimulate production, boost exports and substantially resolve
unemployment and infrastructure challenges.

Having borrowed heavily from local and foreign sources, the
Federal Government in line with its pledge to fight corruption, is
now beaming its searchlight on Nigerians with questionable sources
of wealth.

Nonetheless, financial analysts are worried that a memo the NFIU
did not want released actually leaked, saying such a development
could hurt its reputation.

Also, there are concerns over the timing of the leaked memo,
coming at a time several election cases are being sorted.

A financial consultant who did not want his name in print
alleged; “They may be trying to use this memo to blackmail some
judges. There’s something fishy. These are judges that will
determine the Atiku/Buhari case when it eventually lands at the
Supreme Court. This is meant to scare someone or some people. It’s
scare tactics.

“Again, memos of NFIU leaking is not good. It has several
implications. They should handle such with finesse and utmost
secrecy”.

Also commenting, the Lead Director, Centre for Social Justice,
Eze Onyekpere said the country has several anti-graft agencies and
yet the battle against corruption is not thorough. He called on
NFIU not to be partisan in carrying out its functions.

“Their work should cover the National Assembly, Ministers,
Commissioners in states, CEOs of agencies, Local Government
Chairmen, etc.

“Again how sincere is this anti-corruption war. Why was Danjuma
Goje, Timipreye Sylva and others cases suspended or even struck
out? Why should some people close to this administration with
corruption cases and no immunity walk free?

“We need actions and not this noise up and down. We want
transparency in the fight against graft. Let government walk the
talk”, he said.

However, the Governor, Central Bank of Nigeria (CBN), Mr Godwin
Emefiele said the apex bank has worked hard to build and sustain
the good rating of Nigeria in effort to tackle money laundering. To
this end, Emefiele said international compliance team from the
Inter-Governmental Action Group against Money Laundering in West
Africa (GIABA) will be in Nigeria this week to look at the systems,
processes and procedures of the country in addressing money
laundering issues.

GIABA was established by the Economic Community of West African
States (ECOWAS) Authority of Heads of State and Government in the
year 2000 and it is a specialised institution responsible for
strengthening the capacity of member states towards the prevention
and control of money laundering and terrorist financing in the
region. Apart from member states, GIABA grants Observer Status to
African and non-African States, as well as Inter-Governmental
Organisations that support its objectives and actions and which
have applied for observer status.

Various organisations are also eligible for observer status
within GIABA: they are; the Central Banks of Signatory States,
regional Securities and Exchange Commissions, UEMOA, Banque Ouest
Africaine pour le Développement (BOAD), the French Zone Anti-Money
Laundering Liaison Committee (Conseil Régional de l’Epargne Public
et des Marchés Financiers), the African Development Bank (ADB), the
United Nations /UNCTED, the United Nations Office on Drugs and
Crime (UNODC), the World Bank, the International Monetary Fund
(IMF), the FATF, Interpol, WCO, the Commonwealth Secretariat, and
the European Union.

In May, the Minister of Finance, Budget and National Planning,
Mrs Zainab Ahmed inaugurated the Steering Committee for “Project
Lighthouse” an initiative which entails using advanced data mining
and analytics techniques to identify tax defaulters, establish
their tax liabilities and send notifications to appropriate
authorities for necessary action.

Project Lighthouse, identified a batch of over 130,000 high net
worth individuals and companies whose records are not up to date
due to detected underpayments.

The system-wide computer software, which drives the Project
Lighthouse, aggregates data from multiple sources such as bank
accounts, land registry records, company registration data, tax
filings, customs records and asset ownership records, among others,
to identify, profile and track tax evader.

Authorities say many Nigerians have lost assets in the course of
trying to conceal them from the authorities. Such losses typically
occur in the event of death or an urgent need to liquidate assets
when required documentation and proof of ownership cannot be
provided.

The global focus on illicit financial flows, experts note, is
such that global regulations will only become tighter with
time.

Last week, the Chairman, Federal Inland Revenue Service (FIRS),
Tunde Fowler revealed that N97.7 billion has so far been recovered
from tax defaulters since he gave the directive to banks to slam a
lien on tax defaulters’ bank accounts.

The figure, he noted, was generated from 3,976 out of 44,293
non-tax compliant companies.

He gave a breakdown of the money and said that N88.59bn was
recovered through the banking turnover exercise, the Service
recovered after reaching agreement with 3,797 out of 42,736
companies.

In addition to that, he said that 74 out of 406 companies have
paid about N4 billion under the special tax audit substitution
exercise.

Fowler added that the FIRS realised N3.8 billion after reaching
agreement with 79 out of 800 companies under the VAIDs substitution
exercise.

He said that through the special investigation substitution
exercise, 47 out of 351 companies have paid N2.06 billion.

He said: “As at today, there are a total of 23,141 tax
defaulters who are yet to come forward to clear their outstanding
liabilities of about N254 billion.

“FIRS in collaboration with the banks have started engaging in
compliance measures with regards to the tax defaulters and their
accounts.

“Failure to carry out this directive will result in the banks
being sanctioned according to Section 31 subsection 1-3 and 32
respectively of FIRS Act 2007.

He said failure to comply would be seen as an act of economic
crime to the nation, adding that FIRS would be left with no option
than to enforce its rights and apply appropriate sanctions.

“The sanctions will commence with delisting of the bank from
FIRS collection list”, he added.

Interestingly, the Acting Chairman of the Economic and Financial
Crimes Commission (EFCC), Ibrahim Magu recently disclosed the
recovery of N117 billion between January and August this year,
while the commission recovered N239.16 billion in 2018.

“In the first quarter of 2019 financial year, the commission
made recoveries which include cash recovery of N140.7 million,
direct deposit of N2.021 billion, tax recoveries of N7.20 billion,
subsidy recovery – N3.06 billion, and USD recovery of $292
million,” the EFCC Chairman said.

He added, “In the course of the year 2018 financial year, the
commission obtained 313 convictions across its offices. It is
interesting to know that the commission has also obtained 192
convictions from January 2019 to date (August).”

Specifically, the Abuja Zonal Office of the Economic and
Financial Crimes Commission (EFCC) said it recovered the N423
million, $39,253 and €2,330 between January and August 2019.

The Acting Chairman of the Commission, Ibrahim Magu who was
represented by the Head of the Abuja Office, Aminu Ado Aliyu,
disclosed this at a press briefing.

According to Aliyu, the zone has been focusing on cybercrime
through intelligence gathering and collaboration with other
agencies across the world.

“Prior to the release of the FBI list, we had in collaboration
with the FBI, cases under investigation of which two suspects
indicted in the list released by the FBI are in our custody.

“On the other hand, another suspect on the list is being
investigated independently on a different case and his case is
pending arraignment,” he said.

He further explained that the suspects, Chika Augustine and
Godspower Nwachukwu, were arrested in Abuja and $35,000 was
recovered from one of them (Chika Augustine).

The Zonal Head also disclosed that 33 convictions have been
secured from January 2019 till date; 293 arrests have made and over
465 cases are currently under investigation.

He further warned that the modus operandi of the cybercriminals
include, and are not limited to love scams, e-mail phishing,
identity theft and fraudulent bitcoin and crypto currency sales,
and therefore, cautioned the public to be more vigilant.

Specifically, he warned against the prevalence of fraudulent
Bitcoin sales which he says has been on the rise.

Culled from SUN