Stakeholders weigh cost of expulsion from Egmont Group

The battle line may have been drawn and the negotiable war, expectedly, is slated for March 11, just six days to go. Like the MSCI Index delisting, would the country go through this first before negotiations?
Egmont Group
Egmont Group

The battle line may have been drawn and the negotiable war, expectedly, is slated for March 11, just six days to go. Like the MSCI Index delisting, would the country go through this first before negotiations?

A civil society organization- the Media Initiative against Injustice, Violence and Corruption (MIIVOC), said it portends grave danger for the nation’s economy, particularly the risk perception against much-desired investment, if allowed to happen.

Executive Director, MIIVOC, Dr. Walter Duru, has already petitioned President Muhammadu Buhari, to take urgent steps in the last six days, to avert the looming danger- Nigeria’s expulsion from the Egmont Group of Financial Intelligence Units.

Duru, who made the call in Abuja, last week, expressed concerns over the development, arguing that when Nigeria is expelled, it will be listed as a high-risk jurisdiction country, with far reaching implications on the economy.
This same concern has been raised earlier by the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, who said the country does not need such experience before taking action.

He blamed Nigeria’s present suspension from the group on the absence of operational autonomy for the Nigeria Financial Intelligence Unit, as well as the absence of confidentiality in the handling of financial intelligence, calling on the National Assembly to quickly hold a Conference Committee meeting, harmonize its report and transmit same to the President for immediate assent.

“Nigeria was suspended by the Egmont Group of FIUs in July, 2017, following the absence of operational autonomy for the NFIU, among other related concerns. The failure of Nigeria to pass a law making the NFIU independent is the main issue.

“At the moment, both the Senate and the House of Representatives have passed a bill to address this, but, for a few concerns. 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). There is no doubt that the CBN is Nigeria’s best bet for now. Even if the bill is not perfect, let it be finalised and transmitted immediately, while amendments come later. We must avert this imminent danger.

“The Egmont group will be meeting from the 2nd to 7th of March, 2018 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,” he said.

The civil society activist stressed that when expelled, Nigeria will no longer benefit from financial intelligence shared by the other 156 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.

“Another major consequence will be the blacklisting of Nigeria in international finance, and 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.

“It could also affect the international rating of Nigerian financial institutions, restricting their access to some major international transactions. Do not forget 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,” he said.

Lamenting over what he described as the politicisation of the matter, he advised stakeholders to consider the interest of the country first, and above pecuniary interests.

ABCON chief has long called for end to the delays, warning that it portends dangers for the entire financial market.

According to Gwadabe, should such suspension occur, Visa, MasterCard and other credit cards issued by Nigerian financial institutions would be rejected by global financial institutions.

Another adverse implications, he said, is that it would derail the anti-corruption war as recovery of looted funds abroad and other follow up by anti-corruption agencies will be hindered, making cooperation by sister global corruption agencies difficult.
He therefore wants all the relevant parties to unite to save Nigeria from an unintended vulnerabilities, threats, risks and losses that would follow the suspension.

The last Egmont Group’s statement about Nigeria is very clear on what the issues are, as the statement reads in part: “The heads of FIU made a decision, by consensus to suspend the membership status of the NFIU, 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.

“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 to lift the suspension as soon as possible.”
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