Introduction
On December 14, 2013 in Abuja, the INDEPENDENT SERVICE DELIVERY MONITORING GROUP (CENTRE FOR TRANSPARENCY ADVOCACY) organised a one day Roundtable for Civil Society Organisations (CSO Roundtable) on the proposed bill to establish the Nigeria Financial intelligence Agency (NFIA). Nigeria, being party to the United Nations Convention against Corruption (UNCAC) 2005, has an obligation to ‘establish a financial intelligence unit (FIU) that serves as a national centre for the receipt and analysis of suspicious transaction reports; and other information relevant on money laundering, and terrorist financing for dissemination of the results of the analysis to relevant agencies.’
Initiating the NFIA Bill therefore, is part of Nigeria’s efforts to fulfil its obligation as a member of the committee of Nations committed to combating financial crimes globally. Globally, the process towards the fight against corruption, money laundering and terrorism requires that member-nations set up independent financial intelligence units (FIU). Until recently, the Nigerian equivalent of FIU was the Nigerian Financial Intelligence Unit (NFIU) domiciled within the Economic and Financial Crimes Commission (EFCC) as a department within the Commission.
The establishment of this NFIU as a department within the EFCC has now been found to be inadequate in terms of its legal framework. The NFIU is currently member of the EGMONT Group of FIUs. The EGMONT Group is the global body that sets standards for FIUs’ operations and is made up of 139 FIUs from different jurisdictions/countries. NFIU was admitted in 2007 but is yet to meet up with the Group’s principles on confidentiality, security and operational independence of the FIU.
Several reports by the International Monetary Fund (IMF), GIABA, EGMONT Group of FIUs reflect the urgent need for the NFIU to have a different framework from the EFCC and to ensure that a budget is provided for the NFIU through the “appropriation budget” so as to ensure the security of information and data in the NFIU.
The international requirements based on the Financial Action Task Force (FATF) standards requires that the FIU should be the central body for ‘’receiving, analyzing and disseminating financial intelligence generated from reports submitted by financial, non-financial institutions and designated non-financial businesses and professions (DNBPs) as defined by the laws”.
The Egmont Group of FIUs, of which Nigeria is a member, requires that the following be in place for the FIU to be admitted as a member and to retain its membership, operational autonomy, independent funding, security of information and data, and ability to hire and screen staff working in the NFIU.
The Roundtable
The CSO Round Table was therefore, organised to provide opportunity for civil society to critically examine the proposed bill, make inputs into it and strategize on how to make powerful representation during the Senate public hearing on the bill on Monday December 16 to ensure its eventual passage into an effective law establishing a credible, independent and effective agency that will strengthen the fight against corruption.
The Roundtable was attended by civil society organisations from all parts of Nigeria working on issues of corruption and transparency.
Walter Duru A Communication and Public Relations Consultant set the tone for the Roundtable with a lead presentation on ‘The NFIA Bill: All you need to know’ which gave an overview of the NFIA Bill and Nigeria’s obligation as a member of the Egmont Group of FIUs. This was followed by questions, contributions, and suggestions on how to amend the bill and strategies on how CSO can push to ensure the bill is passed in such a form that it does not become yet another meaningless law that will only serve sectional or narrow interest.
Although Nigeria has been a member of these Groups since 2007, Nigeria has failed to fulfil the promise it made to the Egmont Group regarding its commitment to ensure that the NFIU meets Egmont standards, consequently, following efforts in the past few weeks by the EFCC to take over the NFIU by force, the Nigeria’s FIU access to the Egmont global network of FIUs has been withdrawn.
The bill to establish this agency was originally introduced as private members bill but was later consolidated with an executive bill introduced by the President following the visit by the FAFT in December and this helped to fast-track the delisting?? of Nigeria from the …. However, two weeks ago, Nigeria was again delisted from…, after the invasion of the offices of the unit by EFCC operatives…???
CONCERNS
After a critical review of the anti-corruption environment in Nigeria, participants expressed the following concerns.
- That corruption has remained endemic in Nigeria and has been elevated to a culture of governance and politics. This is to the extent that even some members of the ruling class who have perpetrated and benefited from corruption have now begun- for whatever reason, to raise alarm about the deep rot in the system and the extent of damage that corruption has done and is still doing to Nigeria.
- That the response of government to routine outbreaks of corruption scandals in Nigeria, particularly, the actions, inactions and utterances of government clearly show that the current administration is not demonstrating genuine commitment and lacks the will to combat corruption.
- That recent cases of grand corruption, notably the missing 500 billion naira Sure-P funds; the missing of some 48 billion naira from the NNPC as revealed in the letter by the CBN Governor to President Jonathan; the lingering 230 million naira bullet proof car scandal involving the aviation Minister, Ms. Stella Oduah; the unresolved petroleum subsidy scandals, etc demonstrate how entrenched corruption has become in Nigeria and the impunity that protects perpetrators
- That our leaders appear to be working toward collapsing the country and that the open letter written by former president Obasanjo to President Jonathan accusing him pointedly of shielding and protecting corrupt people underscores the emergency situation that corruption has presented in this country.
- That if the NFIU is established and functioning, this climate of impunity for corruption will be checked.
- That considering that our leaders behave as though they have no stake in this country since they and their children don’t even belong here- they do not care as they continue to bleed the country.
- That it therefore behoves us all- in our own interest and in the interest of the future generations- to take on this opportunity provided by the Senate to ensure the establishment of an NFIA to strengthen the anti-corruption war.
- That although people have argued that we have enough laws to tackle corruption, but the truth remains that these laws have been deliberately laced with loopholes that make them ineffectual tools to effectively punish and deter corruption.
- That there is the need to bring into being such an agency that can respond to the power environment and that will not function at the whims and caprices of the president whose body language encourages- if not supports- corruption.
- CSOs are aware of the recurrent argument- even among some legislators- that we don’t need another agency. But this argument, in our view, is founded on either mischief or ignorance. It is clear that we are not setting up another EFCC or ICPC but looking for an organisation that can feed different agencies and is effective in its operations, independent of any political interest and has powers to enforce compliance.
PROPOSALS ON THE NFIA BILL
Participants critically reviewed the Bill and made recommendations to strengthen it. Civil society notes that certain factors have made it difficult for similar bodies not to function effectively and consequently recommended deliberate amendments and measures to ensure that the NFIA when established, functions effectively.
Participants observed, for example, that the SFU has not succeeded in checking fraud and corruption in the police because it is a part, rather than being independent- of the NPF just as the NFIU is part of- rather than external to and independent of the EFCC.
The NPF, Police Service Commission, EFCC, ICPC and other similar agencies have also not functioned effectively because they lack independence. They lack independence because the power of appointing and removing the leadership of these agencies is centralised in the hands of the president, in many cases, in blatant breach of the laws establishing these agencies
Participants agreed on the imperative of passing this Bill into Law so as to halt Nigeria’s ‘downward slide into the “high-risk jurisdiction list” and to prevent Nigerians from being further subjected to global ridicule and disdain in the committee of nations.
While we understand that the EFCC wants to maintain its hold on the NFIU, it is important that we place the national interest over and above any narrow and selfish interest.
Therefore, participants present the following recommendations to the Senate as it holds the public hearing on the NSFI Bill.
- There is the need to establish the NFIU as one central collation point where information should be received, analysed and given to relevant agencies for necessary action.
- That the Director General of the agency who must be a person of unquestionable character should be appointed following a screening process that includes a public hearing to enable members of the public give opinions about the character of any person nominated for appointed as a member of the Board of the agency. Persons so appointed should enjoy fixed and secured tenure and can only be removed by a two third majority of votes by the Senate over specified offence recognised under the law.
- The operational autonomy of the agency must be guaranteed so as to ensure security of information. It should no longer be domiciled within the EFCC offices since it is meant to serve all the law enforcement and financial agencies and institutions by providing them with information.
- It must have financial autonomy
- The appointment procedure and composition of its leadership must comply with international standards to allow it to fulfil its international obligations as a member of the global network of anti-corruption agencies.
- The staff of the agency should be composed by technically competent staff that with requisite qualification and understanding of the workings of the agency
- That there is need to amend aspects of the law to ensure that the agency does not end up just as another EFCC or ICPC.
- That there is need to put in place effective supervision mechanism.
- That there is need to ensure quality of staff. Appointment into this agency must not be used as another opportunity for patronage or federal character. The agency must be staffed with educationally qualified and technically competent professionals who are serious-minded and understand the issues at stake.
- Participants propose the following amendments to specific Sections.
- Section 3 which deals with composition of the Board and recommend that it should be represented by various agencies that the agency will serve, including CSO representatives.
- Section 4b should also be amended to decentralise appointment and tenure of office. They should not be appointed solely and made to serve at the pleasure of the president alone.
- There is also the proposal that the agency be established by a legislative act and that it will not report to the executive arm but to the legislature to shield it from political control or executive abuse.
- The language of the bill should be amended to reflect gender
- There must be provisions to empower the agency to enforce compliance with requests.
- Failure to comply within a period of two weeks should be treated as a criminal offence and the culprit should be prosecuted with specified penalty.
- A CSO representative nominated by CSOs should also be included in the technical advisory committee
Conclusion
We believe that this law will also help to promote the rule of law as it will reduce the tendency by anti-corruption agencies to arrest people on mere suspicion before they commence investigations.
CSO is determined to engage on this Bill to ensure that it is passed into an effective law that serves the national interest.
Once the bill is passed, CSO will follow up with strategies and plans of action to ensure that the law is implemented. CSO commits to investing the same zeal in ensuring the implementation of the Bill when passed as it will in ensuring it is passed into a law.
Participants note that some people are struggling to frustrate the passage of the law or to water down its contents and make it ineffectual if eventually passed.
Participants will undertake concerted efforts with critical stakeholders to ensure that the bill is passed to check corruption and ensure that the prediction that Nigeria will break up in 2015 does not come to pass.
DETAILS OF RECOMMENDATIONS
Group 1
The Agency should be domiciles within the Presidency but shall report to the National Assembly
Group 2
Section 9 (2) (b)
Security Operatives should be expunged and replaced with regulatory financial experts and legal expert with not less than 15 years cognate post graduate experience in financial crimes investigations
Group 3 Parts 5 and 6)
Section 22(3) subject to a review of an appeal under section 24 not section 23 as erroneously stated in the Bill.
Group 4 (Parts 7 and 8)
Group 6
The caption of section should read dissolve unit not agency
Group 1
Part 3 section 9 Onuh H Haruna 08038738182
Section 9 (1) There shall be for the agency 3 persons to be nominated by the President to the Senate, and one person ratified by the Senate based on requisite qualification.
9 (2) (b) a top ranking security personnel, intelligence officer or legal practitioner
9 (3) 4 years renewable upon performance following strict evaluation report by the board
9 (4) (b) addressed to the president through the Chair of the governing board
9 (4) (d) viii in case of resignation, based on petition, the senate should conduct investigation before the seat can be declared vacant.
11 (1) in place of other staff, use external experts
11 (4) should be based on the civil service salary structure especially the law enforcement level.
12 this section should be moved to part 3 section 9
Part 4
15 © such monies should be from first line charges and secondly 2-5% as may be determined by the governing board, of recovered funds as funding for the agency
(d) Gifts should be stuck out
18 the agency shall not later than June 30th of each year submit through the board to the president and senate
Group 2 Delight 08066190662
Section 1 …
Instead of predicate use other offences arising therefrom or therein
Section 3 (2) shall consist of the nominees of the following
Remove the NPF
Add NBA, a representative of the Association of Chartered Accountant; a representative of Financial complaint body
4 more representatives of 4 different CSOs
Section 4 (b) expunge subsection b
Add a member of the board shall hold office for a term of 5 years and may hold office for another term of 5 years and no more
Group 3 (parts 5 and 6) Registration and Supervision of members, entities, Ignatius Okorocha 07026086470
Membership Register
Section 20 (3) lines iii as it deems fit
Section 21 (3) Agency may refuse to register somebody convicted of corruption under ICPC, EFCC Acts or related Acts or laws of the federation of Nigeria
Section 21 (3) (b) the information provided is false or misleading in all/every material particular
Section 21 (5) the agency shall within 90 days after deciding to register the applicant, include his name and address in the register
Section 24 (6) where any of the parties is dissatisfied with the decision of the federal high court, further appeals shall lie with the court of appeal and supreme court
Section 26 recommends 10,000,000 penalties
Part 6
Section 28 (a) consult with relevant government agencies and deporting institutions in developing enforcement measures, guidelines and policies necessary for the mitigation of the risks of money laundering and terrorism financing
© ensure that reporting institutions put in place appropriate risks management systems and policies to identify and assess money laundering, terrorism financing in relation to the customer, transaction, country or geographical area, product and services involved in the business transactions.
Group 4
Parts 8 and 9
Money Laundering Reporting Officer
Section 29 (2-7) qualifications/skills of money laundering
- People in social sciences
- Lawyers
- Ex-service persons with good reputation
- Experts in security management, local and international
- Experts in money laundering issues should also be considered
Section 30 (2-7) broken into two.
Section 31 (1-7) add ‘suppresses’
Section 31 (2) add ‘not less than’ 10 years
Part 9
Section 38 the president ‘shall’ make regulations and issue guidelines as are necessary, subject to the approval of the National Assembly and in consultation with the NFIA
Section 40 (1) must reapply and be confirmed by the senate
Section 40 (4) remove the word ‘Minister’
Agencies should include civil defence, immigration
Group 5 Part X Miscellaneous Provisions
Expunge section 36 (2)
Section 36 (5) two working days to be replaced with 14 working days
Section 36 (7) add ‘s’ to sanction
Section 47 (1) delete wilfully
Section 37 (1) (b) add after a notice to that effect has been duly served in accordance with the provisions of the act
Section 38 (1) replace Minister with the Board
Section 39 expunge everything
Section 40 expunge everything
Section 41 expunge everything
Section 42 (d) replace legal person for artificial persons
Section 42 © replace legal person for artificial person
Barrister Emeka J. Nzenwata
