Can Nigeria escape being expelled by Egmont Group?

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Nigeria risks being expelled by the Egmont group if President Muhammadu Buhari fails to sign the Nigerian Financial Intelligence Unit bill into law by March 11

By Anayo Ezugwu

THE National Assembly has cleared the way for the Nigerian Financial Intelligence Unit, NFIU, bill to become an Act. The bill, which was passed on Wednesday March 7, has been forwarded to President Muhammadu Buhari for his assent before March 11.

Nigeria will be expelled from the Egmont Group, global body of financial intelligence units if the President fails to sign the bill into law.

There is concern in some quarters that Nigeria might not meet the deadline because of infighting between the Senate and the House of Representatives over where the unit will be domiciled and its autonomy.

The Senate wanted it domiciled at the Central Bank of Nigeria, CBN, while the House of Reps preferred the Economic and Financial Crimes Commission, EFFC. The infighting lasted for more than one year before they were able to reach a compromise and harmonise the bill.

Even the Egmont Group expressed concern over domiciling the unit with the EFCC. They accused the EFCC of abusing the unit and leaking confidential information at its disposal to the public against the practice by members, especially when a case is still under investigation. As a result this, the group in July 2017 suspended Nigeria and equally threatening to expel her from the group.

Saraki
Saraki

Egmont Group during its July 2017 meeting explained that the NFIU was suspended because the EFCC, under which the NFIU was situated, was leaking sensitive information to the media. The Egmont Group also accused the EFCC of blackmailing individuals with the confidential intelligence at its disposal.

“The heads of FIU made a decision, by consensus, to suspend the membership status of the NFIU, Nigeria, following repeated failures on the part of the FIU 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. The measure will remain in force until immediate corrective actions are implemented,” the group said in a statement.

The Egmont group hammer will finally fall on Nigeria if President Buhari fails to sign the bill into law. The implication is that Nigerians may no longer be able to carry out international transactions.

Another major consequence of the expulsion will be the blacklisting of Nigeria in the international finance circle. This could affect use of MasterCard and Visa credit and debit cards by Nigerians when they travel and within the country.

It could also affect the international rating of Nigerian financial institutions, restricting their access to some big-ticket international transactions. Nigeria will also no longer be able to benefit from financial intelligence shared by the other member countries, including the US and the UK. Also to be affected is the country’s ability to recover stolen funds abroad.

A threat of permanent expulsion from the Egmont Group is hanging over Nigeria if by March 11, the NFIU has not been granted full financial and operational autonomy.

Notwithstanding, the most important component of the new bill is the separation of the NFIU from the EFCC where it had existed and operated in the past 11 years.

By the provisions of the EFCC Act, the anti-graft agency more or less performs the functions of the NFIU and the latter does not enjoy autonomy. Specifically, Section 2(c) of the EFCC Act provides that the commission (EFCC) “is the designated Financial Intelligence Unit (NFIU) in Nigeria, which is charged with the responsibility of coordinating the various institutions involved in the fight against any money laundering and enforcement of all laws dealing with economic and financial crimes in Nigeria.”

This provision was the bone of contention with the Egmont Group, as it said it did not allow the NFIU to operate as an independent entity.  The group had advised Nigeria to separate the EFCC and the NFIU by giving each their clear mandate.

It also advised that the NFIU could be domiciled in any government agency of choice, including the EFCC, so long as it operated as an independent entity.

NwezeThe new law passed by the National Assembly on Tuesday resolved the issue by deleting the extant Section 2(c) of the EFCC Act and establishing the NFIU as an independent entity. However, it will now be domiciled in the CBN in line with practices elsewhere, but will be an independent body not answerable to the CBN.

But, Kayode Oladele, Chairman, House Committee on Financial Crimes, while praising the passage of the bill, expressed some reservations. He noted that though Nigeria now had an independent NFIU, he feared that it might be a “toothless bulldog” having no power to bite.

He argued that if the issue of domiciliation had been resolved in favour of the EFCC as earlier recommended by the House, the NFIU could have benefited from the ‘policing powers of the EFCC’ to do its job. “As it stands, the Executive will decide how it will work. The Director will be appointed by the President on the recommendation of the Office of the Attorney General of the Federation and the confirmation by the Senate,” Oladele said.

Abubakar Bukola Saraki, Senate president, said the National Assembly has done its part in saving Nigeria from expulsion from the Egmont Group. He noted that the National Assembly’s passage of the bill was prompt, so as to facilitate Nigeria’s re-admission into the Egmont Group rather than being expelled and that when assented to by the president, it would make the NFIU an independent entity and also help the country in the fight against corruption.

Saraki, in his remarks, thanked Chukwuka Utazi, chairman Senate Committee on Anti-Corruption, and all senators, for their work on the bill. He also said their action will ensure that Nigeria remains a member of the Egmont Group. “I hope that with this, NFIU, bill that we have passed today (yesterday), this conference report, they will have a second view and re-admit us (Nigeria) into the process (Egmont Group).

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