Isaac Anumihe
The Nigerian banking community is now in panic mode following threat by Egmont Group to suspend the country from its network. If the threat is carried out, millions of Nigerian visa and master cards holders will no longer be able to handle international transactions with their cards.
Egmont Group is a united body of 155 Financial Intelligence Units (FIUs) which provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing (ML/TF). This is especially relevant as FIUs are uniquely positioned to cooperate and support national and international efforts to counter terrorist financing and are the trusted gateway for sharing financial information domestically and internationally in accordance with global Anti Money Laundering and Counter Financing of Terrorism (AML/CFT) standards.
The group had in July 2017, suspended the Nigerian Financial Intelligence Unit (NFIU) at its 24th plenary of the Heads of the FIUs in Macao. On the ground that the Economic and Financial Crimes Commission (EFCC) under which the NFIU was situated, was leaking sensitive information to the media.
It 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 (EFCC). The measure will remain in force until immediate corrective actions are implemented,” the group said in a statement.
But EFCC had denied the allegations, saying that the “false petition” was sent to the Egmont Group by an aggrieved former director of NFIU.
“What Nigeria is facing today may have been self-inflicted as certain citizens with vested interests in the running of the NFIU are known to regularly feed the world body of FIUs with false information regarding the situation in Nigeria.
“The issues that culminated in the recent suspension of Nigeria are predicated on a false petition by a former director of the NFIU who, embittered by the manner of her dismissal, painted a false imagery of siege on the NFIU with the objective to compromise information from the Egmont Secure website,” an official from EFCC, said.
However, the Vice President, Professor Yemi Osinbajo, in a memo: SH/OVP/DCOS/NFIU/ which was addressed to the chairman, Senate Committee on Anti-Corruption and Financial Crimes, Chukwuka Utazi, explained that he had set up an ad-hoc committee to reposition the NFIU and restore its membership of the Egmont Group.
The memo listed Utazi as the Chairman of the ad-hoc committee. Other members include Kayode Oladele, a member of the House Representatives, Abdullahi Shehu, and representatives of the Federal Ministries of Justice, Finance and Interior. Others are the Executive Secretary, Presidential Advisory Committee Against Corruption (PACAC), a representative of the Independent Corrupt Practices and Other Offences Commission (ICPC) and a representative of the EFCC.
The committee was charged with facilitating the legal and regulatory measures to bring about financial and operational autonomy of the NFIU, and to make other recommendations necessary to boost the country’s capacity to deploy financial intelligence to fight crime.
The committee was expected to turn in a final report by the end of August 2017. However, nothing has been heard of its recommendations.
Reacting to the threat, an Economist, Professor Pat Utomi, said that it will be disastrous for Nigeria because transaction cost will be higher for Nigerian card hold and the cost of doing business will increase. He noted that the financial inclusion policy of the Central Bank of Nigeria will sufer a set back.
On what Nigeria can do to avoid being sanctioned, the professor of Economics noted that the issue resides on the managers who are expected to strengthen the institution.
A director at WAIFEM, Mr Baba Musa, in his response, said that suspending Nigerian will have a grave legal implication because Nigeria has a franchise with Visa and Master cards to issue those cards.
According to him, if Nigeria is suspended it will cauxe a lot of inconveniences to millions of card holders. Baba said that although the visa and master card companies are private sector businesses, government still has a right to monitor the flow of money through the channels in order to build its reserves.
He said that the 1994/6 financial crises were caused by private-sector debts and so the government has a right to monitor how these funds are being moved about because if there is a shortfall the burden falls back on the Central Bank of Nigeria as banker to the government to make it up. Even in the US, anyone that transacts beyond their set financial threshold will be called to question, he explained.
The WAIFEM director also added, “disclosure is important in financial transaction and it is within the global anti-money laundering law for the private sector or anybody at all to disclose financial transactions at all times. So, what the government needs to do is to sit down with Egmont to let them know that what the EFCC is doing is still within the ambit of the Money Laundering Act in the interest of the country and the global financial system.”
In a text message response to Daily Sun enquiry, EFCC spokesman, Mr. Wilson Uwujaren, stated, “There is no threat to sanction Nigeria. What you have is the recycling of old news by vested interest pursuing personal agenda.”