Experts gathered in Abuja for three days to discuss retrieval and management of assets stolen or illegally acquired using public funds. It was organised by the Presidential Advisory Committee Against Corruption (PACAC) in collaboration with The Commonwealth. JOSEPH JIBUEZE reports.
What should be done with assets recovered from looters? Who should keep them – the Federal Government or the state where the asset was stolen from? What if the stolen assets have been laundered through stocks or farm? What should be done with the shares or animals? What is the role of the courts? Is the legal framework adequate?
These are some of the issues discussed at a three-day national stakeholders’workshop on Recovery and Management of Recovered Assets, organised by the Presidential Advisory Committee Against Corruption (PACAC) in collaboration with The Commonwealth.
Speakers were drawn from the ministries of Foreign Affairs, Finance, Justice, Department of State Services, Office of the National Security Adviser, the Police, Nigeria Customs Service, Federal Inland Revenue Service, the courts, Nigerian Security Civil Defense Corps, National Agency for the Prohibition of Traffic In Persons, National Drug Law Enforcement Agency, the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC), among others.
Expertise and technical support was provided by Commonwealth Secretariat, United Nations Office on Drug and Crime (UNODC)/World Bank and Asset Recovery Inter-Agency Network of Southern Africa.
Why recover assets?
PACAC Executive Secretary, Prof Bolaji Owasanoye, said about $40bilion is stolen annually from developing countries, adding that looted funds far outstrip foreign development aid by nearly four times.
Asset looting, he said, undermines foreign aid, drains currency reserve, reduces tax base, harms competition, compromises free trade, increases national debt burden and escalates poverty.
Owasanoye said asset recovery is a new field in international law and local jurisprudence, is complex and cumbersome, and sometimes leads to friction between states and between law enforcement agencies and the courts.
According to him, mechanisms for retrieving proceeds of crime, as envisioned by the United Nations Convention against Corruption (UNCAC), include freezing, seizure, confiscation, restitution, compensation to identifiable victims of criminality, disgorgement of profits and criminal fines.
Challenges of asset recovery, he said, include the use of interlocutory appeals and dilatory tactics by lawyers, claims of violation of right to property by suspects, and lack of cooperation or understanding of wider implications of corruption by the judiciary.
Other challenges of assets recovery, he said, are lack of credible databases or assets register, complexity and technical nature of investigation, money laundering (use of shell company, beneficial owner principles, etc), differences in legal regimes and poor national cooperation.
On the legal framework, Owasonoye said assets freezing provisions can be found in the Code of Conduct Bureau and Tribunal Act, Money Laundering Act 2011, Advance Fee Fraud and Other Related Offences Act 2006, Failed Banks Recovery of Debts and Financial Malpractices in Banks Act, EFCC Act and ICPC Act.
The former Nigerian Institute of Advanced Legal Studies (NIALS) Director of Research believes asset forfeiture provisions do not violate fundamental human rights.
According to him, a suspect must either prove financial capacity to afford the asset or concede it as proceed of crime.
“The court ought not to return seized asset to a suspect who is unable to prove source of income even if EFCC or ICPC is unable to prove commission of offence,” he said.
Former EFCC chairman Mallam Nuhu Ribadu, who gave the keynote speech, praised the Buhari administration for the political will to fight corruption. He said due to limitations of existing laws on asset forfeiture, effort at enacting a law to cover the spectrum of issues around forfeiture was welcome.
“We should have a strategy that is a product of a consensus. Out of this strategy, we can agree, if need be, to have new laws or institutions with clear mandates and responsibilities,” Ribadu said.
EFCC and seized assets
Secretary to the EFCC, Mr Emmanuel Aremo, said assets are seized to prevent criminals from enjoying the proceeds of their crime, to prevent the concealment of illicit proceeds, to deprive criminals of funds and other resources required to fund organised crime and or evade justice, to facilitate restitution or compensation to victims of crime, and to deter people from acquiring wealth from crime.
Aremo said majority of the assets in EFCC’s custody are real estate, hence in making an application seeking the interim attachment/forfeiture of a property, the commission also makes an application to the court for an order to manage assets through its appointed estate management consultants.
He said revenue from the assets’ management is used to settle all incidental costs, such as professional fees, while the rest is paid into a dedicated account.
He admitted that the commission has assets under interim forfeiture, such as vehicles and vessels, parked at various sites across the country. To him, they could be better managed.
“This is not an appropriate asset management strategy because being depreciating assets, vehicles lose their economic value if they continue to be subjected to the elements which substantially reduce the recovery of any sales proceeds when they are eventually sold after obtaining a final order of forfeiture. This exposes the commission to claims of compensation in the event that they are ordered to be returned to the owners.
“Without a clear authority to act on such depreciating assets, the issue of maintenance will continue to pose a challenge.
“Appropriate legislation should be provided for consideration to be given to selling of such vehicle (with or without the consent of the owner), because it is in the interest of all parties to convert a depreciating vehicle into an asset that secures its value or appreciates,” he said.
Head of assets recovery at ICPC, Mr Frank Nanakumo, said seized assets should be administered with transparency, and should be should be subject to an annual examination by independent auditors.
He also identified some constraints, such as the budgetary restrictions that affect maintenance of frozen/seized assets, lack of human resources, lack of skilled managers within agencies, and uncooperative attitude of financial institutions in responding to requests.
CIBN President/Chairman of Council, Prof Segun Ajibola, said there had been cases where landed properties used as collateral for bank loans were seized, whereas such properties were duly perfected as security for the loan.
“Whenever this occurs, the bank finds itself in the lurch as deposits money already deployed as loans could be lost,” he said.
On management of recovered assets, he said: “Our recommendation is that whatever is recovered must be applied to assuage the masses who are the direct victims of such looting.”
He said there should be a law to excuse recovered looted funds from the federation account to forestall forced sharing among tiers of government.
Head, International Cooperation in Criminal Matters, office of the AGF, Shehu Bodinga, said the government was focusing on mutual legal assistance in recovering asset hidden abroad.
“As Nigeria is poised to pursue its stolen assets from foreign jurisdictions, there are a number of bilateral agreements which Nigeria has signed with other countries such as the United States, United Kingdom, France, etc. Most of them are in force and operational,” he said.
Lessons from abroad
In developing countries with scarce skills, it is challenging to duplicate capacity in many agencies. It is for this reason that South Africa established the Asset Forfeiture Unit (AFU) in 1999, according to Grace Ndinisa of the Unit.
She said having a special unit to deal with recovered assets ensures that training can be intensive and focused on those who do the actual work full-time.
“It is not enough that convicted criminals are punished through imprisonment or paying a fine. AFU aims to make a greater impact on crime by removing the fruits and incentive to commit such crimes, as well as the means by which crimes are committed.
“The Unit places a strong emphasis on making an impact on crime by obtaining asset forfeiture orders, developing jurisprudence and facilitating good relations with law enforcement partners to, inter alia, ensure that cases are referred to the Unit and that cases are successful in court. The AFU advocates work closely with both the prosecution and the police,” she said.
Rule of Law Division of the Commonwealth Director, Katalaina Sapolu, said efforts by previous administrations to recover Nigeria’s looted assets did not yield much result because of lack of trust by the countries holding the stolen assets.
“This is because much of the reluctance or the reason that is given by other countries is: ‘are we returning the money to safe hands to be reused for the benefit of the people of the countries?’
“So, I strongly believe that with the new political leadership and the political will that has been demonstrated internationally, it will work. It will help a lot.”
Stolen Assets Recovery Initiatives at the UNODC/World Bank Director, Dr Oliver Stolpe, said even if there is no specific law on assets recovery and management, much can still be achieved.
“The absence of legislation is no excuse. If you can carry the judges along, you can obtain necessary forfeiture orders, and you can then develop a case law,” he said.
Some recommendations
After the workshop, a draft recommended framework on the Management and Administration of Recovered Stolen Assets in Nigeria was produced following intensive deliberations at breakout sessions.
It was agreed that the practice of decentralised assets management regime by various law enforcement agencies and anti-corruption agencies has proved ineffective, wasteful and a distraction from the core or primary focus of the respective agencies concerned with the fight against corruption and money laundering.
It was recommended that a law be enacted to provide for a centralised administrative agency to manage recovered assets.
Pending when the law is passed, it was suggested that a multi-disciplinary Central Assets Management Committee should be created to centrally administer the recovered assets.
The committee will be vested with administrative powers to coordinate and manage all the recovered stolen assets on behalf of the mandated agencies and for the benefit of the People of Nigeria.
It will be multi-disciplinary, including professionals, such as valuers, accountants, and asset managers.
It was suggested that the government must keep a record of all the restrained properties and maintain a database that will include description of assets, suspected source of funding, history of assets/timeline, beneficiaries of the assets, information of cases around the assets, classification of the assets (perishable and non-perishable), and value of the assets.
It was also recommended that such asssets should have seizure numbers, accompanied with their pictures and videos , dates of civil and criminal cases to be linked to assets and their location.
It was further recommended that some assets should be managed by a receiver/manager, including reputable stock broking firm where shares are involved.
Rather than allowing some assets to waste or depreciate, it was recommended that seized vehicles, vessels and aircraft be sold once a restraining order has been issued to preserve their value.
“Where possible, the defendant’s consent should be obtained to sell a vehicle. If that consent is not forthcoming, a court order should be obtained to require sale of the vehicle,” the stakeholders proposed.
Where perishables goods, animals and fast depreciating assets are involved, the suggestion was that they could be left in control of the owner in the interim, or sold at the most reasonable price.
There were three suggestions on where to keep recovered funds. The first is that income from recovered assets should be paid into a designated account, exclusively maintained for the recovered stolen assets. It could be called Recovered Assets Funds, to be held in trust for the victims, such as the Federal Government, state, local government, an institution or individuals.
A second option would be for all funds realised from the sale of the recovered assets, regardless of its origin, to be paid into the federation account as revenue to fund special projects.
A third recommendation was for such monies to be paid into a special fund to be managed by a Board of Trustees to be appropriated for legacy public utility projects.
