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Before Egmont Group expels Nigeria…


President Muhammadu Buhari PHOTO: BAYO OMOBORIOWO

It is inscrutable why President Muhammadu Buhari and his influential men are not moved by the sword of Damocles the Egmont Group is hanging over the head of the country just because of yet another executive and legislative procrastination in Abuja. The implications of Egmont Group suspension of Nigeria in July last year may have sounded esoteric to many citizens who are used to lapping up juicy political and human interest stories. But we need to appeal to our big men in Abuja to get cracking and cooperate with the National Assembly that has rounded off most of the processes to get a Financial Intelligence Unit (FIU) bill out for the president’s assent this week.

Specifically, unless Nigeria puts in acts together this week, gets a harmonised bill by both chambers of the National Assembly, Nigeria will be expelled by the Egmont Group of 156 members of Financial Intelligent Units (FIUs).

It is unfortunate that despite the grave implications of a possible expulsion that should be a big debate by the civil society organizations and the business elites in the mainstream media, many people may still be at sea over why people should get worried about something that is not part of regular front-page and prime-time issues in the news. It may surprise many to note that the implications of Nigeria’s imminent suspension will actually be more telling than poor rating on Perception Index by Transparency International.


Let’s shed some light on the Egmont Group rigmarole and why we should encourage Nigeria’s leader to take urgent steps to avert Nigeria’s imminent expulsion from the EG of Financial Intelligence Units.
Here is the thing, if Nigeria is expelled, she will be listed as a high-risk jurisdiction country, with far reaching implications on financial transactions with numerous countries we need.

Nigeria’s suspension from the Group in July last year could be blamed on the absence of operational autonomy for the Nigeria Financial Intelligence Unit, domiciled as an administrative FIU in EFCC at the moment. Besides, the Toronto-based Group has also fingered absence of confidentiality in the handling of financial intelligence by the EFCC.

This is a fact file on suspension of Nigeria in July last year, which was treated in the media as a minor story. Let’s extract some facts from the Co-Chairs’ Statement at the 24th Plenary of the Egmont Group of Financial Intelligence Units where Nigeria was punished.

The 24th Plenary of the Egmont Group of Financial Intelligence Units (FIUs) was held in Macao, SAR (China) from 2-7 July 2017. The plenary was attended by 354 participants who were representatives of 112 FIUs, 11 observer organisations, and 8 international organisations. They discussed the challenges FIUs had been facing in combating money laundering, associated predicate offences, and terrorist financing.

The plenary was co-chaired by Mr. Sergio Espinosa, Chair of the Egmont Group of Financial Intelligence Units/Deputy Superintendent of FIU-Peru and Ms. Deborah Ng, Head of GIF, Macao, SAR. The Co-Chairs congratulated KwFIU, Kuwait and FIU Sudan, as new Egmont Group members following their endorsement by Heads of FIU. This brings the membership of the organization to a total number of 156 FIUs.

The efforts of the new members were highly commended considering that they were required to meet enhanced membership benchmarks. The Heads of FIU endorsed the new membership of the FIU Germany as the FIU in this jurisdiction was reorganized into an administrative unit under the authority of the German Central Customs Authority (Zollkriminalamt ZKA).

Then at the Session, Heads of FIU decided by consensus, to suspend the membership status of the NFIU, Nigeria, according to the Group, “following repeated failures on the part of the FIU, (Nigeria) 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 body noted that, “the measure will remain in force until immediate corrective actions are implemented”. The FIU, 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 to lift the suspension as soon as possible”.

The concerns include absence of an Act of the National Assembly creating an independent Financial Intelligence Unit. It should be understood here that the Group does not approve of the one, (Administrative FIU) the EFCC created in 2007, which does not treat suspicious financial intelligence it gets with confidentiality.

The trouble with Nigeria is that the body would have been created in Nigeria long before now but for the lobby of the EFCC for the Nigeria’s Financial Intelligence Unit to be domiciled in the Commission, which Egmont Group does not want. What is more, the Chairman of the House of RepresentativesCommittee on Financial Crimes, Mr. Kayode Oladele, a lawyer, was Chief of Staff to the immediate past Chairman of the EFCC, Ibrahim Lamorde. He has been the chief lobbyist in the House to ensure that FIU law contains a provision making it to be domiciled in only the EFCC.

But sadly for us this is exactly what the Egmont Group does not want because the Group is persuaded that the EFCC uses the information it gets though the instrumentality of FIU unethically. But this is the background other stakeholders including some public affairs analysts (and even journalists and lawyers) do not appreciate about the fierce fight for the soul of the FIU in the National Assembly. And this is the main reason the EFCC ‘representative’ in the federal House does not want a joint conference to ratify the Senate version of the Bill, which provides that the FIU, Nigeria be domiciled in the Central Bank of Nigeria (CBN. This is what Chairman, Senate Committee on Anti-Corruption, Senator ChukwukaUtazi, whose Committee has ratified CBN as the FIU focal point has revealed.

One other hidden fact is that Mr. Stephen Oronsaye, former Principal Secretary/Permanent Secretary to the President (Obasanjo), Permanent Secretary Ministry of Finance and former Head of Service is facing multiple court charges the EFCC under Lamorde filed against him because of his support for the domiciliation of the FIU, Nigeria in the Central Bank of Nigeria (CBN). He got involved as a ‘Nigerian Coordinator’ of FIU, Nigeria while he was in government as his official functions then demanded. He has continued his support for an independent FIU, notably to be domiciled in CBN.

The almighty EFCC allegedly exploited Oronsaye’s membership of the CBN Board of Directors at the time to nail him for handling some financial issues, which have been creatively alleged as a financial crime. But most stakeholders understand the original sin of Mr. Oronsaye has been his failure to allow the FIU, Nigeria to be legally domiciled in EFCC. Mr. Oronsaye had been attending Egmont Group’s meetings and the Group has been dealing with him as an institutional memory before the EFCC took him to court. He was deeply involved in various hearings during the last Session of the National Assembly (2011-2015). But the EFCC’s lobby at the National Assembly was more successful than the Oronsaye group’s, which insisted on CBN as the focal point of FIU, Nigeria. It can be claimed that the EFCC lobby succeeded because as it wished, the National Assembly failed to pass the bill before the (2011-2015) Session ended as they did several times to the Petroleum Industry Bill (PIB).

It is important to understand another critical element in the politics for the soul of FIU, Nigeria: As long as the Bill is stalled at the National Assembly and even if Nigeria is expelled, FIU will remain with EFCC as an Administrative Unit.
And this too: because of the way Nigerian system works, it may be difficult to blame the EFCC for pursuing this “enlightened-self-interest” policy. Without the Financial Intelligence Unit in EFCC, the anti-graft agency will be a featherweight. Besides, the Commission may not be able to access bank depositors’ records as it does today without first obtaining court orders.There will be more losses for the EFCC, in this regard.
We need to deepen our understanding of some of these undercurrents that Nigeria’s financial journalists have failed to cover or have been covering up outright.

What the President Can Do This Week!
Since both the Senate and the House of Representatives have passed a bill to address Egmont Group’s concern, there is a way out. The main discrepancy is where the agency will be domiciled. There is a near consensus that it be domiciled in the Central Bank of Nigeria (CBN), which is Nigeria’s best bet for now. Even if the bill is not perfect, there should be a presidential intervention to get both chambers finalise and transmit it immediately for assent. Amendments can be made later. Nigeria’s interest should override other considerations now. If institutions are made to work, an independent FIU can work better too to serve the interest of the EFCC. After all,Nigeria Extractive Industries Transparency Initiative (NEITI) is an independent body that has been working in the same sensitive environment with NNPC and other extractive industry stakeholders. We need to note this too.

The Egmont group will be meeting from 11th to 16th of March, 2018 in Argentina and If Nigeria fails to comply with the group’s demand for a legal framework granting autonomy to the NFIU in the next few days, the country may be expelled from the global body, which provides the backbone for monitoring international money laundering and terrorist financing activities.

This is the danger for everyone like a heaven falling that no one can escape: if Nigeria is expelled, the country will no longer benefit from financial intelligence shared by the other one hundred and fifty-six member-countries, including the United States of America and the United Kingdom, while the country’s ability to recover stolen funds abroad will be hampered.


Besides,Nigeria will face blacklisting in international finance. The immediate consequence is that this could affect the use of credit cards, as the credit lines offered by corresponding banks would be cut off. In fact, financial instruments from Nigeria may not be honoured abroad.

Expulsion could also affect the international rating of Nigerian financial institutions, restricting their access to some major international transactions. It should be noted that Nigeria’s membership of the Egmont Group ensured the removal of Nigerian banks from the blacklist of international finance. The blacklisting of Nigeria in 2001, for instance, prevented the banks from engaging in correspondent banking with foreign institutions and also denied Nigerians access and ability to use foreign credit cards.

That is why President Buhari and leadership of the National Assembly should freeze partisan politics this week and face governance in public interest by passing the FIU Bill and the president should sign it into law, lest the country’s economic headache will worsen.

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