By Omodele Adigun
“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 (EFCC).
“The measure will remain in force until immediate corrective actions are implemented. The NFIU, 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 lift the suspension as soon as possible.”
This joint statement by Mr. Sergio Espinosa, Chair of the Egmont Group of Financial Intelligence Units (FIU)/Deputy Superintendent of FIU and Ms. Deborah Ng, Head of GIF, Financial Intelligence Office, Macao, Chinese Special Administrative Region (SAR) at the 24th Plenary of the Egmont Group of FIUs in Macao, SAR, from July 2-7, 2017, may have paved the way for NFIU metamorphosis in the country.
It was reported that Nigeria was handed a six-month ultimatum, which expires this month- to make its financial intelligence unit autonomous or risk expulsion.
It was this fear of outright expulsion that culminated in the recent independence of NFIU from EFCC as announced by the acting Chairman of EFCC, Mr. Ibrahim Magu, at the Senate last month.
He was quoted as saying: “We have allowed NFIU to go. They are operationally autonomous and independent of EFCC. They will be independent of EFCC. We have given them financial autonomy. N800 million was proposed for the agency in 2018 budget.”
Earlier, the Senate had passed a resolution to make a law granting autonomy to the NFIU to avoid the country’s expulsion from the group.
The Group
The Egmont Group is a body of 156 Financial Intelligence Units (FIUs) across the world. It provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing.
Nigeria joined the group on an operational basis on January 1, 2005 and became a full member on June 1, 2007. The plenary, where Nigeria was suspended, was attended by 354 participants who were representatives of 112 FIUs, 11 observer organisations, and eight international organisations with a view to discussing the challenges, which FIUs face in combating money laundering, associated predicate offences and terrorist financing.
The group mandates countries to establish a financial intelligence unit that serves as a national centre for the receipt and analysis of suspicious transaction reports; and other information relevant to money laundering, associated predicate offences and financing of terrorism, and for the dissemination of the results of that analysis.
As a member of the group, the NFIU can access the bank accounts of persons of interest in all the other 155 member countries. All advanced countries are members of the group, which is an initiative of the American government.
Had Nigeria failed to meet this January deadline, and consequently expelled, the repercussion would have been great indeed. For instance, the country would no longer benefit from financial intelligence sharing with other member countries, while the country’s ability to recover stolen funds stashed abroad would also be crippled.
Another sanction would be the blacklisting of Nigeria in international finance and this could affect the issuance of Mastercard and Visa credit and debit cards by Nigerian banks. It could also affect the international rating of Nigerian financial institutions, restricting their access to some big-ticket international transactions.
Nigeria’s admittance into the group in 2007 is considered to be one of the biggest achievements of the President Olusegun Obasanjo administration. The membership ensured the removal of Nigerian banks from the blacklist of international finance.
The blacklisting had prevented the banks from engaging in correspondent banking with foreign institutions and also denied Nigerians access to foreign credit cards.
“It was one hell of a struggle to get Nigeria as a member,” a former senior official of the Obasanjo administration had told an online media platform last year.
“The suspension is a massive blow. It is going to set us back by a number of years because it is not easy to get admitted into the group. I hope things are still redeemable before it ends in an expulsion”, he added.
Speaking in the same vein, Mr. Olufemi Fakeye, the Chairman, House (of Representatives) Committee on Insurance & Actuarial Matters, recently urged the stakeholders to quickly put their act together to resolve the issue.
His words: “Nigerians, we have been talking on how smart we are. We are very smart indeed! But there are people out there watching us. We‘ll get to a point where they would say they can’t deal with us again. We have to get our act together so that we can be properly rated again so that they can readmit us.”
On what efforts the legislators were making in that regard, he said:
“It is regulatory area. We cannot legislate on that. The central bank, the NDIC, people in the system; the bankers should ensure that they correct what they have done wrong. Lately, you know, even the people that rate the value of your economy, we call them credit rating agencies; some weeks back, they downgraded Nigeria and several banks.
“Moody’s, Fitch, Standard & Poor’s, etc., they continued to downgrade Nigeria because if you run a bank, it is supposed to be grade A bank.
“As long as that bank is operating in Nigeria, they cannot rate your bank higher than they rate the country. So we have to get our act together and do it again.”