- Names Lagos, Abuja, Port Harcourt, others highest beneficiaries
Juliana Taiwo-Obalonye, Abuja.
Civil Society Legislative Advocacy Centre (CISLAC), has disclosed that recent findings has revealed money laundering in real estates is responsible for non-affordable housing in the country.
It has also said terrorists and criminal groups were also finding the sector as a key vehicle to move corrupt money.
Executive Director, CISLAC, Auwal Ibrahim Musa Rafsanjani, made this disclosure Tuesday at the launch of a report titled “Nigeria’s Dirty and Real Estate: How Money Laundering through Real Estate Impacts Nigeria’s Fight Against Corruption.”
He said the report was one of the center’s activities under the anti-money laundering Programme which has been identified as one of its priorities given the crushing volume of resources that Nigeria loses through money laundering and illicit financial flows.
He said illegal proceeds in Nigeria are cleaned up through the real estate sector in Nigerian highbrow cities such as Lagos, Abuja and Port Harcourt or in tax havens abroad.
“The impact of these investments is evident in the high cost of houses in both urbane and sub-urban areas, developed but inhabited settlements and development of shelters in only selected areas. All these factors contribute immensely to housing deficit, inequality and poverty. It is also worrisome that the government is yet to start collecting taxes on properties to serve also as a deterrent to frivolous real estate investments.”
Rafsanjani said the report identifies crucial policy problems as being responsible for Nigeria’s inability to tackle money laundering through real estates while acknowledging the detrimental impact of this criminal activity.
He said: “The enablers are well known. Money launderers and criminals use third parties, professionals, family
members and close associates to acquire high value real estate. The use of pseudonyms to open accounts is frequent through which illegal funds are diverted into high-value real estate acquisitions. The laundering of the proceeds of crime through purchase of high value real estates abroad makes
asset recovery difficult and costly. Majority of the cases reviewed involved politically exposed persons and their associates. Transfers of illicit funds through offshore bank accounts is very frequent while purchasing real estate properties. Lastly, laundering of illicit funds through real estate
comes frequently with the aim of funding of political parties or political endeavours.
“We demand competent authorities to answer why money
laundering charges against dishonest and opportunistic real estate agents are very seldom despite credible intelligence. Why are almost no prosecutions taking place for these crimes that fuel poverty, terrorism,
inequality and corrupt political parties? I hope that these topics will be elaborated today based on this report.”
In his remarks, the president, Nigeria Institution of
Estate Surveyors and Valuers (NIESV), Emmanuel
Wike, said as a professional body, quided by the principles of honesty, devotion and transparency, the members are committed to upholding the integrity of the profession and obeying relevant laws.
He said “Our members have been mandated to register with Financial Reporting Council of Nigeria (RCN), Special Control Unit Against Money Laundering (SCUML) and other relevant financial regulators. The Money Laundering (Prohibition
2004 equally provides the framework to check money laundering in Nigeria Economy.
“While we are fully committed to the course of the Government and Non-Governmental Organizations (NGOS) in fighting corruption, let me
reiterate again as stated last year that our members supervise less than 40% of Real Estate transactions in Nigeria.
“Majority of Real Estate transactions are being supervised by None Estate surveyors without requisite knowledge in Estate Surveying and Valuation. This is the only
country where everybody is an Estate Agent.”
Isa Buhari, a policy analyst with CBN, said the bank has taken major steps to address money laundery withinin the financial system.
He said the CBN has issued a robust Financial Actions Task Force’s (FATF) compliant regulations, which it issued in 2019. Whereby, all financial institutions under CBN’s regulatory purview are required to have adequate and effective controls to mitigate money laundering within their institutions.
He said the controls cut across the customary due diligence, KYC Record keeping in respect to especially politically exposed persons and also the DNA Files.
“For example, it also has measures for our financial institutions to identify, monitor and report suspected financial transactions to Nigerian Financial Intelligence Unit. We also have a very robust administrative sanctions which applies penalties for non-compliance and bridges by the financial institutions and this have been applied effectively over the years.
“The CBN has also issued the cash lite policy whereby the use of cash in transactions is discouraged. This will help in minimizing money laundering through real estates agents.
We also require all banks to ensure that before they have any dealings with real estate agent, he must have registered with their regulator which is SCUM and obtain a registration certificate and present same to the bank before any transaction can take place. That way, it ensures every real estate agent will be regulated by a supervisory body on AML/CFT requirements regime. Those are few of what the CBN is doing to check money laundering.”
If a financial institution fails to comply with 31 out of the 48 listed requirements, the financial institution, as well as directors and senior management, will be sanctioned. Minimum fines range from N500,000 to N1.2 million on board members or senior management and N1 million to N20 million on deposit money banks.