Trouble For Nigeria As Global Financial Body Meets Today?

Sunday is D-Day as Nigerians wait with bated breath for the outcome of the Egmont Group meeting which kicks off in Argentina to decide the nation’s fate. The question on people’s lips is will the decision be in favour or against Nigeria’s continuous membership of the global anti-graft agency? asks The Nation's Ibrahim Apekhade Yusuf.

A fortnight ago, the news media was abuzz with report expressing worries over the imminent expulsion of Nigeria from the Egmont Group of Financial Intelligence Units. To say the fears over plans by the Egmont Group to expel Nigeria from the global body were real is simply stating the obvious. The frenzy and fear was literally writ large, to say the least!

The fear has been further heightened as the Egmont group meets from 11th to 16th of March, 2018 in Argentina, ostensibly to seal Nigeria’s fate.

Expectedly, the question is if Nigeria fails to comply with the group’s demand for a legal framework granting autonomy to the NFIU will the country be expelled from the global body, which provides the backbone for monitoring international money laundering and terrorist financing activities?

But how did we come to this sorry pass? A plausible explanation would suffice.

Tracing Nigeria’s travails at Egmont Group Efforts to make the NFIU independent dates back to 2004, but the nation’s anti-corruption agency never though it wise to comply with this till date. The body would have been created in Nigeria long before now but for the lobby of the Economic and Financial Crimes Commission (EFCC) to have the NFIU domiciled in the Commission, which Egmont Group does not want.

The Nation can also reveal that Mr. Stephen Oronsaye, former Principal Secretary/Permanent Secretary to the President (Obasanjo), Permanent Secretary Ministry of Finance and former Head of Service, currently facing multiple court charges the EFCC under Lamorde filed against him because of his support for the domiciliation of the FIU, Nigeria in the Central Bank of Nigeria (CBN). He got involved as a ‘Nigerian Coordinator’ of FIU, Nigeria while he was in government as his official functions then demanded and has continued his support for an independent FIU, notably to be domiciled in CBN.

The Chairman of the House of Reps Committee on Financial Crimes, Mr. Kayode Oladele, a lawyer and former Chief of Staff to the immediate past Chairman of the EFCC, Ibrahim Lamorde, has been the chief lobbyist in the House to ensure that FIU law contains a provision making it to be domiciled in only the EFCC. This is just as the Chairman, Senate Committee on Anti-Corruption, Senator Chukwuka Utazi, whose Committee ratified CBN as the FIU focal point been involved in what some event watchers described as ‘personality clash’ over who has the power to abrogate on the matter to the detriment of the country.

Investigation by The Nation also revealed that the proposal to separate the NFIU from the EFCC pitted the acting-chairman of EFCC, Ibrahim Magu, against Attorney-General Abubakar Malami for months.

However, things came to a head last July when the Egmont Group suspended the country.

Why Nigeria was suspended last July 
Nigeria’s suspension from the Group in July last year, with the benefit of hindsight was due largely to the absence of operational autonomy for the Nigeria Financial Intelligence Unit, domiciled as an administrative FIU in EFCC at the moment.

The Toronto-based Group also fingered absence of confidentiality in the handling of financial intelligence by the EFCC. Curiously, the fact of Nigeria’s suspension was treated as inconsequential by the authorities concerned.

Available information obtained from the Co-Chairs’ Statement at the 24th Plenary of the Egmont Group of Financial Intelligence Units further stated that Nigeria was punished for reasons germane.

The 24th Plenary which held in Macao, SAR (China) from 2-7 July 2017 was attended by 354 participants who were representatives of 112 FIUs, 11 observer organisations, and eight international organisations. They discussed the challenges FIUs had been facing in combating money laundering, associated predicate offences, and terrorist financing.

The plenary was co-chaired by Mr. Sergio Espinosa, Chair of the Egmont Group of Financial Intelligence Units/Deputy Superintendent of FIU-Peru and Ms. Deborah Ng, Head of GIF, Macao, SAR. The Co-Chairs congratulated KwFIU, Kuwait and FIU Sudan, as new Egmont Group members following their endorsement by Heads of FIU. This brings the membership of the organisation to a total number of 156 FIUs.

At the Session, Heads of FIU decided by consensus, to suspend the membership status of the NFIU, Nigeria, according to the Group, “following repeated failures on the part of the FIU, (Nigeria) to address concerns regarding the protection of confidential information, specifically related to the status of suspicious transaction report (STR) details and information derived from international exchanges, as well as concerns on the legal basis and clarity of the NFIU’s independence from the Economic and Financial Crimes Commission (EFCC).”

The body noted that, “the measure will remain in force until immediate corrective actions are implemented.” The FIU, Nigeria is now excluded from all Egmont Group events and activities. The Egmont Group expressed its hope that the Nigerian authorities will address these concerns to enable the Egmont Group to lift the suspension as soon as possible.”

The concerns include absence of an Act of the National Assembly creating an independent Financial Intelligence Unit. It should be understood here that the Group does not approve of the one, (Administrative FIU) the EFCC created in 2007, which does not treat suspicious financial intelligence it gets with confidentiality.

Echoing similar sentiments, Anthony Ogbeide Ehilebo, lawyer who spoke in a monitored television magazine programme in Abuja, revealed that from available information, “ It was a simple annoyance from another government that sent information to the system and Nigeria took it raw from the file and sent it to the media- it found its way to Saharareporters. This was the reason why we were suspended from the Egmont server since June 2017. It means we’ve been blind to financial information, especially Suspicious Transaction Report (STR) since June 2017.”

Outcry over planned expulsion of Nigeria 
Expectedly, a civil society organisation, the Media Initiative against Injustice, Violence and Corruption (MIIVOC), said it portends grave danger for the nation’s economy, particularly the risk perception against much-desired investment, if allowed to happen.

Executive Director, MIIVOC, Dr. Walter Duru, has already petitioned President Muhammadu Buhari, to take urgent steps in the last six days, to avert the looming danger- Nigeria’s expulsion from the Egmont Group of Financial Intelligence Units.

Duru, who made the call in Abuja recently, expressed concerns over the development, arguing that when Nigeria is expelled, it will be listed as a high-risk jurisdiction country, with far reaching implications on the economy.

He blamed Nigeria’s present suspension from the group on the absence of operational autonomy for the Nigeria Financial Intelligence Unit, as well as the absence of confidentiality in the handling of financial intelligence, calling on the National Assembly to quickly hold a Conference Committee meeting, harmonise its report and transmit same to the President for immediate assent.

“Nigeria was suspended by the Egmont Group of FIUs in July, 2017, following the absence of operational autonomy for the NFIU, among other related concerns. The failure of Nigeria to pass a law making the NFIU independent is the main issue.

“At the moment, both the Senate and the House of Representatives have passed a bill to address this, but, for a few concerns. The main discrepancy is where the agency will be domiciled. There is a near consensus that it be domiciled in the Central Bank of Nigeria (CBN). There is no doubt that the CBN is Nigeria’s best bet for now. Even if the bill is not perfect, let it be finalised and transmitted immediately, while amendments come later. We must avert this imminent danger.”

The civil society activist stressed that when expelled, Nigeria will no longer benefit from financial intelligence shared by the other 156 member-countries, including the United States of America and the United Kingdom, while the country’s ability to recover stolen funds abroad will be hampered.

“Another major consequence will be the blacklisting of Nigeria in international finance, and this could affect the use of credit cards, as the credit lines offered by corresponding banks would be cut off. In fact, financial instruments from Nigeria may not be honoured abroad.

“The blacklisting of Nigeria in 2001, for instance, prevented the banks from engaging in correspondent banking with foreign institutions and also denied Nigerians access and ability to use foreign credit cards,” he said.

This same concern has been raised earlier by the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, who said the country does not need such experience before taking action.

ABCON boss has long called for end to the delays, warning that it portends dangers for the entire financial market.

According to Gwadabe, should such suspension occur, Visa, MasterCard and other credit cards issued by Nigerian financial institutions would be rejected by global financial institutions.

Another adverse implications, he said, is that it would derail the anti-corruption war as recovery of looted funds abroad and other follow up by anti-corruption agencies will be hindered, making cooperation by sister global corruption agencies difficult.

What Nigeria stands to lose? 
In the view of economic analysts, Nigeria will face blacklisting in international finance. Thus the immediate consequence is that this could affect the use of credit cards, as the credit lines offered by corresponding banks would be cut off. In fact, financial instruments from Nigeria may not be honoured abroad.

Besides, expulsion could also affect the international rating of Nigerian financial institutions, restricting their access to some major international transactions.

It is also instructive to note that Nigeria’s membership of the Egmont Group ensured the removal of Nigerian banks from the blacklist of international finance. The blacklisting of Nigeria in 2001, for instance, prevented the banks from engaging in correspondent banking with foreign institutions and also denied Nigerians access and ability to use foreign credit cards.

The economic pundits would rather the President Buhari and leadership of the National Assembly should gird up their loins in public interest by passing the FIU Bill and the president should sign it into law, lest the country’s economic headache will worsen.