Recalcitrant tax defaulters, high-end politicians, top civil servants, businessmen and other wealthy Nigerians with questionable sources of income are now in panic mode as the Nigerian Financial Intelligence Unit (NFIU) and other anti-graft agencies began beaming their searchlight on them in line with the Federal Government’s effort to retrieve state funds tallegedly siphoned in shady transactions.
Their mounting anxiety is coming from the Unit’s recent directive to Deposit Money Banks (DMBs) to immediately release the account details of all legislators (including Senate and House of Representatives) and judicial officials in the country.
The NFIU, in a letter dated September 10, 2019 and signed by Fehintola Salisu, NFIU Associate Director, Analysis and Compliance, directed Chief Compliance Officers of banks to furnish it with account names, numbers and transaction details of the top civil servants.
Though the reason for the sensitive request was not expressly stated in the letter, it may not be unconnected with the unit’s recent moves to clampdown on those involved in financial graft of gargantuan proportions.
The agency also sought the account details of members of the National Judicial Council (NJC).
Although it listed judges and National Assembly members as well, there was no mention of any member of the executive arm of government.
The letter read: “Request for information on: All accounts of: the National Assembly, National Judicial Council (NJC), all the members of the National Assembly, principal officers (management) of the National Assembly Service Commission, (and) of principal officers of the judiciary.
“Kindly provide the NFIU with a schedule (account names and account numbers) of the National Assembly, members of the National Assembly and principal officers of the National Assembly Service Commission, as well as all accounts of National Judicial Service Commission and their principal officers including judges and other relevant politically exposed persons.”
The NFIU, headed by Hamman Modibbo Tukur, directed the banks to forward the information on or before Friday, September 13, 2019.
As soon as the memo leaked to the public, sources said various banks were inundated with calls from anxious customers who sought to know how the events would pan out.
But while that simmered, it was gathered that the NFIU came under intense pressure from influential politicians to recant on the memo and in 24 hours, the agency denied asking banks to release such sensitive details of customers to it.
Still not done, it released another statement within 48 hours vehemently denying any plans to probe the Senate President, Ahmed Lawan; Speaker, House of Representatives, Femi Gbajabiamila, other top legislators and high-ranking judges.
The NFIU in a statement signed by Ahmed Dikko, its Chief Media Analyst said: “We have noticed that while some individuals who seem to be favourable to the government are creating the wrong impression that the opposition is using the NFIU, those in the opposition seem to be speaking through some Non-Governmental Organisations (NGOs) and insinuating that government is using the NFIU to its political advantage. Both positions are not only untrue but patently unimaginable.
“It has become necessary that the officer who initiated the request was obviously unacquainted with the fact that the NFIU already had access to such information through its database.
“It is also pertinent to note that the NFIU has the major responsibility, in accordance with global standards, to maintain and regularly update the list of Politically Exposed Persons (PEPs). It will be recalled that a new government was inaugurated in May 2019. The officer who initiated the unauthorised letter was also taking the initiative to update the PEPs list. “The list includes politicians and political appointees in all organs of government. The update exercise which is a regular practice in order to protect public funds and other assets is also in accordance with global best practice.
“For the avoidance of doubt, their excellencies, the Senate President, the Speaker of the House of Representatives, and the Chief Justice of the Federation, as well as Senators, members of the House of Representatives, Justices and other members of the judiciary are NOT under investigation by the NFIU.
“We appeal to members of the public that it is needless to make political capital out of this as the entire country is just one co-signatory with other 164 members of the FIU process”, he said.
Dikko added that the NFIU, having been aware that the leaked letter was not subjected to the appropriate level of authorisation before transmission, the NFIU has commenced investigation to unravel the persons and factors that led to the inadvertent circumvention of its internal process in the isolated case with a view to applying appropriate sanctions as deterrence.
A second generation bank spokesperson who craved anonymity said some top depositors have become restless since the memo leaked.
“The truth is, whether NFIU sent us a memo or not, the NFIU has access to our operations. They have us on their dashboard. We always cooperate with them. Anyone they want to investigate with regards to alleged money laundering, funding terrorism, etc, we open our books.
“Don’t forget that the IFU accused Nigeria of not doing enough to tackle illicit financial flows and other financial crimes. It culminated in making the NFIU autonomous.
“Their work is sensitive. It has national security implications. Any bank that doesn’t cooperate will have itself to blame”, he said.
The NFIU’s operations went full blast in 2018, after President Muhammadu Buhari accented to a bill that split it away from the Economic and Financial Crimes Commission (EFCC) to make it autonomous in line with global standards.
The NFIU largely draws its powers from the Money Laundering (Prohibition) Act 2011 as amended in 2012 and the Nigerian Financial Intelligence Unit Act, 2018. The core mandate of the NFIU as required by international standard is to serve as the “national center for the receipt and analysis of: suspicious transaction reports; and other information relevant to money laundering, associated predicate offences and terrorist financing, and for the dissemination of the results of the analysis to law enforcement and anti-corruption agencies.
Other duties include; receive currency transactions reports, suspicious transactions reports, currency declaration reports and other information relating to money laundering and terrorist financing activities from financial institutions and designated non-financial institutions; receive reports on cross-border movement of currency and monetary instruments; maintain a comprehensive financial intelligence database for information collection, analysis and exchange with counterpart FIUs and law enforcement agencies around the world; advise the government and regulatory authorities on prevention and combating of economic and financial crimes; provide information relating to the commission of an offence by entities and subjects linked to another jurisdiction to foreign financial intelligence unit based on the membership of Egmont Group or on the basis of bilateral cooperation, among others.
However, experts say the reason for the renewed searchlight on wealthy Nigerians is not far-fetched; Nigeria may technically be out of recession, but the recovery is slow as the economy remains fragile and susceptible to external shocks like a sudden slump in oil price.
They reckon that the worrisome reality has pushed the government into a desperate mode as it battles to pump money into the economy to stimulate production, boost exports and substantially resolve unemployment and infrastructure challenges.
Having borrowed heavily from local and foreign sources, the Federal Government in line with its pledge to fight corruption, is now beaming its searchlight on Nigerians with questionable sources of wealth.
Nonetheless, financial analysts are worried that a memo the NFIU did not want released actually leaked, saying such a development could hurt its reputation.
Also, there are concerns over the timing of the leaked memo, coming at a time several election cases are being sorted.
A financial consultant who did not want his name in print alleged; “They may be trying to use this memo to blackmail some judges. There’s something fishy. These are judges that will determine the Atiku/Buhari case when it eventually lands at the Supreme Court. This is meant to scare someone or some people. It’s scare tactics.
“Again, memos of NFIU leaking is not good. It has several implications. They should handle such with finesse and utmost secrecy”.
Also commenting, the Lead Director, Centre for Social Justice, Eze Onyekpere, said the country has several anti-graft agencies and yet the battle against corruption is not thorough. He called on NFIU not to be partisan in carrying out its functions.
“Their work should cover the National Assembly, Ministers, Commissioners in states, CEOs of agencies, Local Government Chairmen, etc.
“Again how sincere is this anti-corruption war. Why was Danjuma Goje, Timipreye Sylva and others cases suspended or even struck out? Why should some people close to this administration with corruption cases and no immunity walk free?
“We need actions and not this noise up and down. We want transparency in the fight against graft. Let government walk the talk”, he said.
However, the Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele, said the apex bank has worked hard to build and sustain the good rating of Nigeria in effort to tackle money laundering. To this end, Emefiele said international compliance team from the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) will be in Nigeria this week to look at the systems, processes and procedures of the country in addressing money laundering issues.
GIABA was established by the Economic Community of West African States (ECOWAS) Authority of Heads of State and Government in the year 2000 and it is a specialised institution responsible for strengthening the capacity of member states towards the prevention and control of money laundering and terrorist financing in the region. Apart from member states, GIABA grants Observer Status to African and non-African States, as well as Inter-Governmental Organisations that support its objectives and actions and which have applied for observer status.
Various organisations are also eligible for observer status within GIABA: they are; the Central Banks of Signatory States, regional Securities and Exchange Commissions, UEMOA, Banque Ouest Africaine pour le Développement (BOAD), the French Zone Anti-Money Laundering Liaison Committee (Conseil Régional de l’Epargne Public et des Marchés Financiers), the African Development Bank (ADB), the United Nations/UNCTED, the United Nations Office on Drugs and Crime (UNODC), the World Bank, the International Monetary Fund (IMF), the FATF, Interpol, WCO, the Commonwealth Secretariat, and the European Union.
In May, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, inaugurated the Steering Committee for “Project Lighthouse” an initiative which entails using advanced data mining and analytics techniques to identify tax defaulters, establish their tax liabilities and send notifications to appropriate authorities for necessary action.
Project Lighthouse, identified a batch of over 130,000 high net worth individuals and companies whose records are not up to date due to detected underpayments.
The system-wide computer software, which drives the Project Lighthouse, aggregates data from multiple sources such as bank accounts, land registry records, company registration data, tax filings, customs records and asset ownership records, among others, to identify, profile and track tax evader.
Authorities say many Nigerians have lost assets in the course of trying to conceal them from the authorities. Such losses typically occur in the event of death or an urgent need to liquidate assets when required documentation and proof of ownership cannot be provided.
The global focus on illicit financial flows, experts note, is such that global regulations will only become tighter with time.
Last week, the Chairman, Federal Inland Revenue Service (FIRS), Tunde Fowler, revealed that N97.7 billion has so far been recovered from tax defaulters since he gave the directive to banks to slam a lien on tax defaulters’ bank accounts.
The figure, he noted, was generated from 3,976 out of 44,293 non-tax compliant companies.
He gave a breakdown of the money and said that N88.59bn was recovered through the banking turnover exercise, the Service recovered after reaching agreement with 3,797 out of 42,736 companies.
In addition to that, he said that 74 out of 406 companies have paid about N4 billion under the special tax audit substitution exercise.
Fowler added that the FIRS realised N3.8 billion after reaching agreement with 79 out of 800 companies under the VAIDs substitution exercise.
He said that through the special investigation substitution exercise, 47 out of 351 companies have paid N2.06 billion.
He said: “As at today, there are a total of 23,141 tax defaulters who are yet to come forward to clear their outstanding liabilities of about N254 billion.
“FIRS in collaboration with the banks have started engaging in compliance measures with regards to the tax defaulters and their accounts.
“Failure to carry out this directive will result in the banks being sanctioned according to Section 31 subsection 1-3 and 32 respectively of FIRS Act 2007.
He said failure to comply would be seen as an act of economic crime to the nation, adding that FIRS would be left with no option than to enforce its rights and apply appropriate sanctions.
“The sanctions will commence with delisting of the bank from FIRS collection list”, he added.
Interestingly, the Acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu recently disclosed the recovery of N117 billion between January and August this year, while the commission recovered N239.16 billion in 2018.
“In the first quarter of 2019 financial year, the commission made recoveries which include cash recovery of N140.7 million, direct deposit of N2.021 billion, tax recoveries of N7.20 billion, subsidy recovery – N3.06 billion, and USD recovery of $292 million,” the EFCC Chairman said.
He added, “In the course of the year 2018 financial year, the commission obtained 313 convictions across its offices. It is interesting to know that the commission has also obtained 192 convictions from January 2019 to date (August).”
Specifically, the Abuja Zonal Office of the Economic and Financial Crimes Commission (EFCC) said it recovered the N423 million, $39,253 and €2,330 between January and August 2019.
The Acting Chairman of the Commission, Ibrahim Magu who was represented by the Head of the Abuja Office, Aminu Ado Aliyu, disclosed this at a press briefing.
According to Aliyu, the zone has been focusing on cybercrime through intelligence gathering and collaboration with other agencies across the world.
“Prior to the release of the FBI list, we had in collaboration with the FBI, cases under investigation of which two suspects indicted in the list released by the FBI are in our custody.
“On the other hand, another suspect on the list is being investigated independently on a different case and his case is pending arraignment,” he said.
He further explained that the suspects, Chika Augustine and Godspower Nwachukwu, were arrested in Abuja and $35,000 was recovered from one of them (Chika Augustine).
The Zonal Head also disclosed that 33 convictions have been secured from January 2019 till date; 293 arrests have made and over 465 cases are currently under investigation.
He further warned that the modus operandi of the cybercriminals include, and are not limited to love scams, e-mail phishing, identity theft and fraudulent bitcoin and crypto currency sales, and therefore, cautioned the public to be more vigilant.
Specifically, he warned against the prevalence of fraudulent Bitcoin sales which he says has been on the rise.