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  • Money laundering: Law and policy

    Money laundering: Law and policy

    The book discusses the meaning, nature and scope of money laundering. It also goes further to interrogate the factors that facilitate the commission of money laundering offence in Nigeria and in West Africa and the effects of money laundering in the area. Furthermore it looks at the global perspectives of money laundering, new strategies of money laundering and also measures both internationally and nationally employed in the fight against money laundering and its effects in the country and also recommend ways to strengthen the fight against money laundering in the country. In the book it was stated that money laundering exists through concealing the proceeds of illegally acquired wealth and systematically integrating it into the economy and this may also be facilitated directly or indirectly by weak governance and political instability. Another issue discussed in the book is financing of terrorism which is related to money laundering and has terribly affected the peace and development of the country. This academic work richly contributes to the existing literature in Nigeria and West Africa, and it is based on the moral, economic, social and political standpoints that criminals should not be allowed to benefit or even protected from illicit wealth.

    The first Chapter of the book is “An overview of Money Laundering” written by Kalu Kingsley Anele. The chapter discusses the evolution, concept, nature, scope and effects of money laundering. It also delved into the legal framework in combatting money laundering and the effectiveness of such machineries. This chapter also deals with the relationship between money laundering and financing of terrorism. This chapter also recognises that there are challenges faced in combating money laundering and its effects and these challenges were discussed, the writer identified corruption, inadequate corporation from financial institutions, defective judicial process, lack of communication between anti money laundering agencies and what he described as challenges with new payment methods as some of the major challenges in combatting money laundering. The writer recommended various ways in which money laundering can be tackled and also advocated that countries should apply international regimes in the fight against money laundering in accordance with prevailing local and peculiar circumstances of the country.

    The second chapter – “Money Laundering Strategies: Global Perspectives” by Damilola Odunayo Awolalu delves into various methods and strategies which can be used in concealing proceeds of crime. The chapter also considered various anti money laundering laws aimed at curtailing the activities of money launderers. The writer argues that a common and reconciled approach to money laundering will prevent launderers from using the different laws and practices among jurisdictions to their advantage both at the expense and disadvantage of states concerned in going after them.

    Chapter three of the book on “New Perspectives of Anti-Money Laundering Legislation in Selected Jurisdictions: Lessons for Nigeria” is written by Irekpitan Okukpon-Adesanya. The writer analysed the international perspective and legislation in money laundering, and the role of international and regional bodies in regulating money laundering globally. The writer also systematically x-rayed examples from jurisdictions like the United States, Cayman Island, Israel etc which can be emulated by Nigeria and West African countries in combatting money laundering. It was observed that the problem in Nigeria has never been in the enactment of laws but in the implementation of such laws. The writer therefore stated that for Nigeria to effectively fulfil its commitment to the Financial Action Task force (FATF) and Inter – Governmental Action Group against Money Laundering in West Africa (GIABA) as a country which is committed to the fight against money laundering it must judiciously implement its Anti–Money Laundering Laws.

    Chapter four of the book written by Ebe Aguebor is titled “Regulating Trade Based Money Laundering (TBML): Problems and Prospects for Trade in Nigeria”. This chapter looks the background to Trade based Money Laundering, related concepts, predicate offences and control of trade based money laundering. The writer defined TBML as ‘… an alternative remittance system through which criminal organisations obtain, transfer and store criminal proceeds, disguised as legitimate trade’ The writer argued that strategies aimed at preventing and combatting trade based money laundering should focus on dismantling trade based money laundering structures however allowing honest trade to continue undisturbed. The writer also emphasises on adoption of inter-agency coordination and International Corporation by policy makers, she went ahead to state that a comprehensive strategy which takes into account sectorial peculiarities, agency specialisation and jurisdictional frameworks will be useful in addressing the challenges in tackling Trade–based Money Laundering.

    In chapter five, Chidiebere Chinweike provides a discourse on “The Economic Impact of Money Laundering: an Analysis of World Bank and IMF Reports” The emphasis of this chapter is on the impacts of money laundering on a country’s economy as well as an analysis of the World Bank and the International Monetary Fund (IMF) reports on money laundering.

    “Anti-Money Laundering/ Combatting Financial Terrorism Strategies in Nigeria: examining the role of the Nigerian Financial Intelligence Unit” is the title of the sixth chapter. This chapter is written by Morenike Aguda. The writer in tracing the relationship between money laundering and terrorism finance argues that Money laundering is the engine that drives other crimes. The meaning and the role of Financial Intelligence Unit was contained in the chapter. The writer went on to argue that for the Nigerian Financial Intelligence Unit to be very effective in combatting and preventing money laundering issues of training of the staff of the unit, strengthening the anti-graft agencies through adequate funding and capacity building, monitoring and reduction the use of cash for financial transactions, strengthening of borders and ports, public awareness etc should be addressed.

    Oduola Ifeoluwa’s chapter seven on “Anti-Money Laundering and Combatting of Financing of Terrorism Framework in the ECOWAS Region” concentrates on the anti-money laundering legal framework in the ECOWAS region. The writer also carefully examined various anti-money laundering laws, the effectiveness or otherwise of the laws in combatting the financing of terrorism of each of the ECOWAS member states. The writer identified that the ease of movement by humans and goods within the region is one of the major factors facilitating cross-border crimes. Furthermore the writer argued that to ensure effective anti – money laundering measures in the region there should be a workable medium to implement national and international instruments for anti–money laundering and combatting the financing of terrorism; she urged collaboration between regulators and law enforcement agents within the ECOWAS region.

    In chapter eight, C.C. Nwabuzor gives a treatise on “The International Legal and Policy Development of Anti–Money Laundering Measures”. The chapter carefully traces the evolution of the term money laundering and examines in detail the various international instruments on money laundering.

    The ninth Chapter by Wahab Shittu on is titled – “National and Cross Border Investigation and Prosecution of Money Laundering Crimes”. The writer focuses on a rounded examination of national and cross–border investigation and prosecution of money laundering crimes as a prerequisite for putting in place a realistic law and policy aimed at eliminating the scourge of money laundering within and outside the country’s borders. The writer identified that to successfully defeat the crime of money laundering, African countries must design a regulatory framework that will support international partnership and sustain strong ties among themselves and other countries of the world. The writer also observed that new developments in technology needs to be updated to act as counter-measures for investigating advanced technologies used in committing crime.

    1The 10th chapter written by Gary Kelechi Amadi and Uchechukwu Ngwaba focuses on “Anti-Money Laundering: Tools and Procedures for Recovering and Managing the Proceeds of Repatriated Funds in Nigeria” the writers observed that money laundering is a profit driven crime and is committed for gain , the idea of profiting from the crime encourages further commission of the crime and thus it is important to strengthen measures aimed at depriving them of the profits which is the basis for the crime. The writers also argued that it is important to harmonise laws relating to forfeiture in Nigeria to avoid misunderstanding in ascertaining the particular laws to prosecute particular offence, also this will block any loophole that maybe exploited by offenders. On the other hand, the writers emphasised that recovered funds be managed in a transparent way to ensure accountability in the system. In their view, this will not only help in combating money laundering,it will also aid in the development of the nation.

    Okechukwu Effoduh’s Chapter 11 advocates for special taxation in combating transnational money laundering. The chapter first of all identified the meaning of the dual concepts of taxation and transnational money laundering and proposed a special type of taxation to tackle the increasing danger of transnational money laundering. The writer argues that this special taxation for transnational money laundering would not only discourage the continuous commission and involvement in the crime but also would aid the government in realising asubstantial revenue.

    The last chapter on “Problems and Prospects of Anti-Money Laundering and Combating Financial Terrorism Capacity Building in Financial Institutions” is written by Adejoke Adediran. This chapter scrutinises the problems faced by financial institutions in carrying out the mandatory task of training their staff as well as the prospects of capacity building on AML/CFT measures in Nigeria. The chapter also examines the problems encountered by regulatory bodies in enhancing the capacity of financial institutions on the AML/CFT measures. The writer identified that money laundering plays a critical role in sustaining terrorist organisations, therefore interrupting the laundering process can cut off funding and resources of terrorist groups. Furthermore the writer argued that financial institutions remain the main channels for money laundering; therefore in combatting money laundering and terrorism financing in the country, the issue of capacity building becomes important because it furnishes financial institutions with the required knowledge needed to curb these crimes.

    Recommendation

    This book is designed to provide an authoritative piece on money laundering law and policy. Its content is well-researched and it proposes not only to enlighten advanced readers, but also persons at all levels, with interest in the subject matter. It is thus is recommended for studies and research, intellectual dialogue and practice in this area or related areas of law. The book does not boast to be exhaustive of all legal issues on money laundering; it leaves room however for further research in the areas covered and areas that were not covered. The book is recommended for academics, lawyers, judges, criminologists, legislators, staff of financial institutions, anti–money laundering regulatory bodies students and any person interested in learning

     

     

  • Money, power, patronage stoke tensions in Niger Delta

    Money, power, patronage stoke tensions in Niger Delta

    Rivers State has been on the boil for some time now. In this report, AFP examines the forces at play and concludes that it is all about money, power and patronage.

    it is a classic Nigerian dispute, combining powerful politicians, patronage, personal rivalries, wider claims of corruption and bickering over lucrative oil revenue.

    But rising tensions in the southern state of Rivers in the Niger Delta region are setting it up to be a key battleground as general elections approach next year.

    Where once it was the feared, heavily armed vigilantes patrolling the creeks who dominated headlines, now a stand-off between the state governor and the country’s president is grabbing attention.

    At the heart of the spat between Rotimi Amaechi and Goodluck Jonathan are claims Rivers has lost out on revenue from a disputed oil well as well as federal development and infrastructure schemes.

    “There are some things that the federal government is doing that are not in the interest of the people of Rivers State,” said Amaechi’s spokesman, David Iyofor.

    “These include the federal government ceding the Soku oil well, belonging to Rivers State, to Bayelsa (Jonathan’s neighbouring home state),” he told AFP.

    “The lack of federal presence in the state and failure to refund the state the 105 billion naira ($658 million, 482 million euros) it spent on federal roads in the state is another major nagging issue.”

    Vocal criticism

    The plain-speaking Amaechi, who is vaunting his own progress on driving up living standards, health and education in the state, has claimed Rivers has “nothing to show” for Jonathan’s time in power.

    But he is also a key figure in a national-level dispute that has plunged Jonathan’s ruling Peoples Democratic Party (PDP) into crisis and seen it lose its parliamentary majority.

    Amaechi, 48, was one of five influential state governors to quit the PDP for the main opposition in November last year, prompting 37 lawmakers in the lower chamber National Assembly to follow suit.

    They accuse Jonathan of ignoring an unwritten party rule to rotate the presidency between the largely Muslim north and the mainly Christian south and reneging on a claim only to serve one term.

    But Amaechi’s gripe also centres around the Soku oil well and the re-allocation of its three-billion-naira monthly revenue to Jonathan’s home state.

    Nigeria, Africa’s biggest oil producer, pumped out about two million barrels of crude oil per day in 2013, according to the Organisation of the Petroleum Exporting Countries (OPEC).

    Revenue is shared between states, although Amaechi has been vocal in claiming that tens of billions of dollars have been siphoned off by the federal government.

    Claims of unfair redistribution fuelled violence that gripped the Delta region until an amnesty, seeing installations attacked and oil workers kidnapped.

    Mounting tensions

    Jonathan has said little if anything on the Rivers situation but his wife, Patience, who hails from the state, has been accused of publicly criticising Amaechi over a state programme she disliked.

    The National Assembly is currently overseeing the divided state legislature, where last May a brawl broke out after five local lawmakers tried to impeach the house’s pro-Amaechi speaker.

    Armoured personnel carriers and armed police using tear gas have disrupted rallies by Amaechi’s supporters and his All Progressives Congress (APC) party in the state capital, Port Harcourt.

    Last weekend, the police admitted firing teargas cannisters to disperse a crowd at a pro-Amaechi rally, during which a staunch ally of the governor was allegedly shot and injured.

    Police denied the claim and there were conflicting reports of the extent of the injuries sustained by the supporter, a senator.

    Fears for 2015

    “This irrationality in Rivers State has gone too far and it is not in tandem with the rule of law,” said human rights lawyer Jiti Ogunye.

    “It appears that Jonathan has gone for broke. We are not going to have a peaceful transfer of power in 2015 the way we are going. They are endangering civil rule and it is dangerous and unfortunate.”

    State police boss Joseph Mbu has been caught up in the middle of the political infighting and faced calls to quit, with some suggesting he is loyal to the presidency.

    He denied that officers fired live bullets at Sunday’s crowd and maintained that teargas was used only because organisers did not have an official permit to demonstrate.

    “What’s happening… is an aberration, an abnormality founded on irrationality and the display of impunity on a large scale,” said Eze Onyekpere, director of the Centre for Social Justice in Abuja.

    “It is a negation of the rule of law and enthronement of impunity. This portends a very bad omen for 2015 elections. People are being shot, harassed and teargassed. This is frightening.”

    Economics of youth restiveness

    A new book, Economics of Youth Restiveness in the Niger Delta, has been released by DrM Christopher N. Ekong, Dr. Ettah B. Essien and Kenneth U. Onye. They were all born in the Niger Delta and gained part of their higher education in the region, and now teach at the University of Uyo there.

    A review of the book notes: “The text is certainly not boring! Youth Restiveness in the Niger Delta has led to kidnapping, hostage taking, and other crimes committed in the region that have resulted in terrible world press and a monumental loss of revenue for Nigeria.

    “The Niger Delta Region of Nigeria has been thrust into international prominence because of its rich natural resources, including oil and gas, which have played a large part in discussions about the region and its sustainable environment. The book explores the general background of Nigeria’s oil and gas resource infrastructure, as well as their effects on the Nigerian economy.

    “The book discusses in detail the resources of the region, including its renewable and non-renewable ones. The root causes of youth restiveness are also discussed, and the authors believe there are some benefits deriving from restiveness. These include closing the income inequality gap in the region and improvements in Nigeria’s socio-economics.”

     

     

  • IPOs hit $190b as investors hunt for returns

    Bloomberg data has showed that about $190 billion have been raised globally through initial public offerings (IPOS) in 2013. These included maiden issues by real estate investment trusts, special-purpose acquisition companies and closed-end funds.

    Companies will raise as much as $225 billion through IPOs globally next year, with about $75 billion in the United States of America (USA), according to estimates by Joe Castle, global head of equity syndicate at Barclays Plc in New York.

    According to data compiled by Bloomberg, companies raised about $22 billion in United States of America (USA)’s initial public offerings (IPOs) in the fourth quarter, bringing the total for the year to $56 billion, the most since 2007.

    Twitter Inc and Hilton Worldwide Holdings Inc helped lead the best year for US initial public offerings since the financial crisis, with strong trading debuts likely to stoke investor demand for new shares in 2014. Sales in Europe and Asia also rose sharply, with global deals tripling from the prior three months, Bloomberg data show.

    Stock-market gains that lifted US benchmarks to records pushed investors to seek new opportunities, fueling demand for IPOs, according to Sica Wealth Management LLC. The success of new listings — with stocks from New York to Tokyo jumping an average of 28 per cent in their trading debuts is luring investors and companies into the market for next year, said Deutsche Bank AG’s Mark Hantho.

    “We’ve had a renaissance of the IPO market,” Hantho, the global head of equity capital markets at the German bank, said by phone from New York. “Getting successful transactions more often than not has created a circular confidence for more companies looking to go public.”

    Companies raised $15.8 billion through IPOs in Europe, the Middle East and Africa over the past three months, up almost fivefold from $3.3 billion in the third quarter, the data show. Royal Mail Plc, Britain’s 360-year-old postal service, sold $3.2 billion worth of shares during its October IPO including an overallotment, the largest in Europe this year.

    In Asia, four companies had IPOs of more than $1 billion each, led by China Cinda Asset Management Co’s $2.5 billion offering this month.

    “It’s been a good period to do capital raising,” said Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management. “The environment in general has been improving, led by the US stock market, and this in turn has contributed to more risk appetite in developed Asia.”

    The Federal Reserve’s efforts to keep borrowing costs low and boost economic growth have sent the Standard & Poor’s 500 index up 27 percent this year, the biggest increase since 1997. This in turn increased investors’ willingness to take on the risk of investing in new — untested — shares, according to Jeff Sica, president of Sica Wealth Management.

    “Investors were so caught up in the broad equity market and desperate to take risks in order to seek massive returns,” Sica said. “They viewed IPOs as easy money and jumped on the bandwagon in an effort to make a quick dollar.”

    The clamoring for IPOs is evident in the early performance of newly listed shares: Companies raising more than $100 million jumped an average of 21 per cent on their first day of trading in the U.S. this year, according to data compiled by Bloomberg. That’s the highest pop since the dot-com bubble in 2000, when shares rose 65 per cent, on average, the data show.

    In Asia, first-day gains were more than 6 percent on average, while in Europe they were more than 7 percent, the data show. Still, continued success will depend upon how the global economic recovery continues, and whether that affects inflation, according to Samsung’s Richardson.

    “The biggest risk would be that as the global economy recovers, inflation may start to rise beyond central banks’ target levels, which could be detrimental to corporate earnings growth,” Richardson said. “If inflation expectations start accelerating, that would be detrimental to stock markets.”

    Some emerging markets didn’t fare as well in initial share sales this year. Brazil’s initial public offerings dried up after the best start of a year since 2007 as investors fled volatility in the world’s worst-performing major stock market. In India, the volume of IPOs hit a more than 10-year low as political gridlock fueled stock-market volatility.

    Emerging markets “may not fully benefit from the start of a global economic recovery because they have to face the headwinds of monetary tightening,” Samsung’s Richardson said. “Historically, rising real interest rates has been negative to the performance of emerging markets, which have been more dependent on easy liquidity.”

    Emerging-market stocks posted their longest weekly slump since June on Dec. 20 as a cut in U.S. stimulus spurred capital outflows. The Federal Reserve said Dec. 18 it will reduce a record bond buying program by $10 billion, while pledging to keep interest rates near zero. Its monetary stimulus program had been helping to prop up global growth by supporting inflows into emerging markets.

    Investor appetite for shares in developed markets fueled a jump in inflows for equities globally to about $252 billion this year, compared with $31 billion in 2012, said Richard Cormack, co-head of equity capital markets for Europe, the Middle East and Africa at Goldman Sachs Group Inc “The strong levels of demand we have seen for IPOs has led to deals getting covered early.”

    Hutchison Whampoa Ltd. picked bankers to manage an IPO of its retail arm AS Watson & Co in Asia with a possible secondary listing in London, people with knowledge of the matter said. General Electric Co plans to spin off its unit that makes store credit cards in a US IPO next year, and China’s Alibaba Group Holding Limited may approach public markets, though the company hasn’t detailed any plans for a listing.

    China’s decision to end a 15-month freeze on IPOs could unleash $11 billion in share sales through the middle of next year, as more than 760 mainland companies have been waiting to go public, according to data compiled by Bloomberg News.

    In Europe, there are already more than 30 IPOs slated for the first half of 2014, according to Martin Thorneycroft, head of equity syndicate for EMEA at Morgan Stanley in London.

    “We’ve seen a sturdy comeback of the IPO market and a remarkable resurgence of investor appetite,” Thorneycroft said. “There will continue to be a broad spread of activity, with a number of billion-dollar type transactions.”

     

  • Money ruins everything (2)

    Money ruins many men. It impairs the moral fibre thus making the average human inhumane but that is because man often fails money. The Nigerian man in particular, fails money and so doing loses his right to lord over it and own it.

    Money, like a wild mongrel needs to be tamed. It requires firmness, chariness, deliberate conservatism and modesty of a full man to tame it, own it and control it. But that is hardly the case; many a man is owned by his money. The Nigerian man, woman and society in particular, are owned by money; that is why contemporary Nigeria worships money.

    Like fire, money becomes a bad master due to our incapacities at taming its flare and controlling it; consequently it consumes us. Money corrupts the brightest amongst us and renders the most promising man and woman worthless; it consumes all who would do anything and everything to acquire it, whatever the consequence.

    Hence the domestication of yesterday’s ‘heroes’ and corruption of the shrewd – men and women by whose citizenship and wisdom we aspired to freedom and progress have being tamed, house-trained, like hunt dogs and pastoral cattle. Eventually, we suffer the transmutation of such established, self-acclaimed defenders of the people’s rights into despicable lapdogs, attack dogs and junkyard dogs of the ruling class.

    Little wonder Sunday of Isabo, Abeokuta, Ogun State, ditched his noble job as foremost columnist and chairman of a national newspaper’s editorial board to become the attack dog and junkyard dog for President Goodluck Jonathan’s administration. Many of his readers and fans bemoan his ‘betrayal’ but from Sunday’s perspective, it is unarguably selfish of anyone to expect him to cling to the drudgery and emptiness of his former job and scorn a-chance-in-a-lifetime opportunity to be part of Nigeria’s high-society, be it as errand boy or disposable ‘bingo.’

    Who would have thought that the unrepentant critic of inept and oppressive ruling class would dump his pen and cape of honour to become an attack dog for the ruling class that erstwhile incited his vitriol? Today, Sunday is speaking from every side of his mouth; he currently patrols Aso Rock corridors as the greyhound would the premises of its master. It must be lucrative being an errand dog.

    In Sunday’s descent subsists the irony of a contrived metaphor; the former columnist’s desertion of his sanctimonious high ground and renunciation of his self-touted activism and crusade for justice, government accountability and morality aptly illustrates contemporary Nigeria’s self-love and enslavement to mammon.

    An inordinate lust for money drives this generation to self-destruct. Having perverted the natural order that places man above money, the animate cowers to the inanimate; Nigeria submits to mammon, and science, technology, power, property and other bastions of materialism own and controls us. The consequences are rampant and discernible for all to see.

    Our lust for money has put paid to that staunch historic adherence to a cultural value system that supposedly distinguishes the Nigerian in the larger comity of nations and universal citizenship. Gone are our touted values; incontestable code of personal and societal ethics that supposedly humanizes the average Nigerian and moulds him into a fuller and better breed of mankind than any other in Africa and across continental divides.

    The current generation, the youth especially, manifests a dissonance with future bliss and progressive leadership anticipated of it. This generation is not only the most knavish but also the most effeminate of all generations; I will not bother over the shortcomings and atrocities we inherited from preceding generations lest I tow the oft beaten path and glamourize our claims to victimhood and base sentimentality. If the Nigeria we inherited is truly shorn of values and promises of a brighter tomorrow, must we aggravate the circumstances that foist upon us such hopelessness?

    One of the most curious kinks of this generation is its sustenance and obeisance to the cult of the ruling class. Take the incumbent administration of President Jonathan for instance; men and women that erstwhile professed to champion the people’s rights have united to defend Jonathan’s honour and justify defiantly, the unceasing ineptitude and mindlessness of his administration.

    They conveniently forget that the incumbent administration’s insensitivity, clumsiness and gluttony have cost Nigeria thousands of lives till date. Evidences of the government’s incompetence and tactlessness abound in its appointment of men and women unfit to run a roast corn kiosk to man the nation’s finance, aviation, health, defense, foreign affairs, education, works and housing ministries to mention a few. Inefficiency of such characters fosters corruption, violence and deaths across the country.

    This anomaly incites harsh criticisms and disillusionment among the citizenry, however, as had always been the case, the leading critics take no part in the pursuit and actualization of majority will beyond lip service; nonetheless they proceed with the most vulgar extravagances courting power and projecting it, irrespective of the nature of men and women that wield it.

    It is incontestable that many of such men, including Mr. President’s media attack dogs, attract to themselves much that lies on the threshold of psychosis and common crime. This minority parading themselves as Mr. President’s apologists riotously cackle like a coven of unbalanced enthusiasts, seeing every illicit and sentimental act of bestiality as cause for political theatrics and hysterical spinning.

    Renowned turncoats like Sunday of Isabo for instance, are very useful to the ruling class; wobbly in intellect and infinitely handicapped by greed, they repeatedly parade themselves as pirates amenable to crimes and accessible to venal enterprise. These purchasable characters eventually shed their pretensions to heroism and honour to unite with the ruling class in its savage war against the citizenry.

    We have fought many wars in Nigeria; wars for Biafra and Niger Delta, the ongoing war for and against the soul of the Northeast currently asphyxiating in the grip of terrorist sect, Boko Haram; these wars are ultimately triggered by our failures with money and its innumerable material vestiges. Yet these wars are never enough; every day, we embroil in fresh wars for self-actualization but the wars of the underdog, Nigeria’s impoverished lot, has a greater significance than all of the others.

    This daily battle for the soul and survival of the struggling working class and barely existent middle class is merely an episode of the universal war that constitutes the true nature of humanity and history of the world—the war of good against evil, ruling class against working class, the haves against the have-nots.

    These wars however, are lost on all fronts even before the masses march on to the battle field every day. This is a consequence of the knavery of men entrusted to serve as our moral sentinels, custodians of culture, value and hope for a brighter tomorrow. These men, contrary to their touted crusades in the interest of the citizenry, unconscionably mutate into more savage destroyers of hope and forms of life than the ruling class they were known to despise. But rather than call them out for the savages and murderers of hope that they have become, the Nigerian masses continually rationalize their betrayal arguing that they were only being smart. Hence perfidy and greed become noble enterprise, in the Nigeria of our dreams.

     

    • To be continued…

  • Sustainable living: The new face of banking

    The Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) are asking banks to look beyond profit and return on investment (RoI) in funding projects to sustainable banking practice. The proposal, which emphasises sustainability of the environment and corporate social responsibility (CSR), was the thrust of a workshop hosted by NDIC in Uyo, the Akwa Ibom State capital, report SIMEON EBULU and  COLLINS NWEZE.

    Should a bank lend money to a company that pollutes the environment or a borrower that funds terrorist activities? Should a bank base its lending plans on return on investment and profitability only, without recourse to the nature of business the borrower does? These and many more were the issues in focus in the forum that was designed to address the new phase of banking, tagged Sustainable Banking.

    But financial sector’s key regulators: the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) want banks to shift focus from profitability alone and consider also other issues around sustainability, before lending.

    The United Nations Environment Programme (UNEP), through its UNEP Financial Initiative on the Environment and Sustainable Development at the Earth Summit in 1992, placed it as pertinent concern for financial systems across the world.

    It said sustainable banking in Nigeria, therefore, is focused on energising the influence of the banking sector (being financier of economic and social activities) towards transforming the longer term interest of environmental preservation and societal balancing into key parameters for allocation of capital.

    It was, therefore, not surprising that the CBN and commercial banks are working out a framework that would restrict lending to companies that adopt and implement environmentally friendly policies. By this, International Oil Companies (IOCs) and other firms that engage in activities that cuase pollution of the ecosystem will be denied loans, going forward.

    The CBN Governor, Sanusi Lamido Sanusi said if the oil companies that degrade the environment and their cohorts in other sectors are starved of funds from both local and international banks, they will have no choice than to comply.

    He spoke during the Nigeria Sustainable Finance Week conference tagged: “Moving frontiers in sustainable finance”, which was meant to attract funding to agriculture, assist in global carbon trading and protect the environment from degradation.

    For him, there is urgent need for a policy ensuring that people do not carry on their businesses in environmentally unfriendly manner and get away with it. He said the agenda would be presented to the Bankers’ Committee to agree on the way it can be realised. The reason is that as an industry, banks cannot continue to take savings and deposits from Nigerians and then, lend to companies that are destroying the environment.

    “Why must Nigeria bring multinational oil companies to destroy our environment? How do we feel about it? They can get the funds and still use it in a responsible manner. I want to see more banks coming to identify with issues of sustainability and protection of the environment,” he said.

    He said banks should not just look at profitability of lending decisions, but should also consider contributions of the borrower to the environment.

    Sanusi, however, admitted that such might be an uphill task in a highly competitive banking sector ‘where dog eats dog’. “How can banks do that when they are competing for accounts? Banks should stop looking at size of balance sheet but on how to build sustainable finance,” he said.

    For him, competition in the sector has drastically risen, compared with what was obtainable in the 80s. He therefore admitted that the policy may be stalled by banks not wanting to lose businesses to competitors that care less about the environment, where a borrower has not adhered to set standards.

    Loan process

    The CBN boss explained that for firms to secure loans from banks, they have to meet certain standards that are applicable in other parts of the world like Brazil, Egypt, Saudi Arabia and Malaysia, among others. “Our environment has been taken for granted for too long. Look at what has happened to the Niger Delta. Imagine that people in the Niger Delta cannot put a net in the river and catch fish to eat and that is a fisherman who is not an employee of the oil company. So, he has to find money to buy imported fish. So, we are saying that even though these things may look simple, they are actually the foundation to the insecurity that we have in the country,” he said.

    NDIC’s role

    Also, the NDIC has called on banks and other financial institutions to improve their commitment to addressing environmental and social impacts of their services. The corporation made this known in a statement at the conference.

    It said more lenders have realised that ignoring social and environmental issues could increase their exposure to credit, compliance and reputational risks. It said to advance sustainability, banks must seek improved performance and results on ground in affected communities and environments.

    It explained that sustainable banking is a value system, which ensures that a bank’s commercial activities do not only benefit its staff and shareholders, but also its customers and wider economy.

    It said financing of the energy sector which is usually the villain on matters of environmental degradation across the world is a trite example. This sector is perhaps the most capital intensive sector and depends on the financial system to mobilise funds for its highly capital intensive operations.

    It said until recently the industry had not given much attention to sustainability beyond ticking off environmental impact assessment on checklist for credit risk assessment for evaluation of loan applications, other jurisdictions have for decades been engraving sustainability ethos in their financial system.

    It said since the 1980s, banks in the United States had been held (under CERCLA- Comprehensive Environmental Response, Compensation and Liability Act) for the negative impact the businesses they financed had on the environment and some of them became bankrupt thereafter.

    Banks’ funding of oil projects

    Eight banks, which include Ecobank, Zenith Bank, Diamond Bank,GT Bank, United Bank for Africa (UBA), Standard Chartered Bank, Access Bank and Fidelity Bank, provided funding for local contractors operating in the nation’s oil and gas sector.

    The banks signed Memorandum of Understanding (MoU) between Total E&P Nigeria Limited, Total Upstream Nigeria Limited and eight leading banks in the country, on a $7.5 billion Nigerian Contractors’ Initiative, in Port Harcourt, the Rivers State capital.

    The programme was put together by Total to manage its value chain, including suppliers and distributors. The essence is to empower local contractors to play more active role in the oil sector through sustainable funding.

    Managing Director/Chief Executive, Total, Mr. Guy Maurice, said the key objective of the MoU and launch of the fund, is to bridge the funding gap for the company’s local contractors which includes vendors and suppliers.

    He noted that the initiative provides for sustainable funding relationship between the selected banks and Total’s indigenous contractors, adding that the programme is in line with the local content laws.

    The Total boss lauded the eight banks for scaling through the rigorous selection process, expressing confidence that, the initiative will enhance local contractors’ participation in the company’s entire value chain business.

    CBN takes case to judges

    Sanusi, while speaking at the Banking and Allied Matters conference for Judges on the theme: ‘Sustainable banking practice in Nigeria: The journey so far and the way forward’, explained that global environmental impact of businesses, which are largely financed by the banking industry suggests that the sector has not given adequate attention to environmental impact of their funding activities.

    He said the tendency to view banking as an environment friendly business is commonplace as it seemed, on the surface, not to be harming the environment and society directly.

    “However, the banking sector has been profiting from financing of environmentally unfriendly sectors. Financing of the energy sector which is usually the villain on matters of environmental degradation across the world is a trite example. This sector is perhaps the most capital intensive sector and depends on the financial system to mobilise funds for its highly capital intensive operations,” he said.

    Template for violators

    The CBN has also developed a reporting template for banks in filling their reports on loans to firms whose operations have negative impact on the environment. This is in line with the Sustainable Banking Practice being promoted by the banking watchdog.

    The CBN said sustainable banking is aimed at minimising or mitigating the negative impacts of financial institutions’ operations on the environment and local communities in which they operate especially on agric, power and the oil and gas sectors.

    According to the regulator, for the successful implementation of the principles, the institutions would be required to develop a management approach that balances the environments and social (E&S) risks identified with the opportunities to be exploited through their business activities.

     

  • How AMCON saved banks in 2010, by Sanusi

    How AMCON saved banks in 2010, by Sanusi

    The Asset Management Corporation of Nigeria (AMCOM) acquired N5.7 trillion bank debts when it was established three years ago, Central Bank of Nigeria (CBN) Governor Lamido Sanusi has said.

    The debts came from long years of insider abuses, bad loans and declaration of false profits by some banks, Sanusi said at the 50th anniversary at the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.

    He said AMCON bonds held by banks would be retired in 2015, adding that N1 trillion of the bonds will be retired by December 31, this year.

    Another N1.1 trillion would be retired next year, he said, adding that none of the banks will hold the corporation’s bonds beyond 2015. CBN, he said, held N3.6 billion of the bonds.

    According to him, the CBN has so far achieved its monetary policy objectives, based on the level of stability in the economy and financial services sector.

    The bank under his leadership, he said, had achieved exchange rate stability, banking sector stability and achieve single digit inflation target.

    He said the CBN ensured that throughout the resolution of the banking crises, no depositor lost money. Corporate governance and risk management issues that threatened the financial system, he said, had been addressed, adding that banks now understand and are aware that there are consequences in crossing certain lines.

    On November 19, investors wrote to AMCON, seeking to know how the N1 trillion bonds will be retired.

    AMCON’s Chief Executive Officer, Mustafa Chike-Obi said such decision would guide CBN’s liquidity management plans in the coming months.

    Meanwhile, a report by Renaissance Capital (RenCap), an investment and research firm, titled: Nigerian Banks: Killing Me Softly” said most lenders that invested in the bonds would face challenging earnings this year.

    “We believe this will remain a challenging year for Access given the nature of its balance sheet (large exposure to illiquid AMCON bonds). We think 2014 should be a year of stronger growth for Access, as most of the AMCON debt matures at the end of this year and will be redeemed for either cash or t-bills – giving Access the opportunity to earn better returns on its assets,” the report said.

    The report also said tougher regulation by the CBN would make it difficult for banks to deliver improved earnings.

    “We think it will become harder for some of the banks to deliver returns in excess of their cost of equity – especially some of the smaller banks,” it said.

     

  • ‘I killed my mother to make money’

    Detectives attached to the Obosi Police Division in Anambra State have arrested a man, Tonna Enedo from the Umuezeshime royal family in Obosi, Idemili North Local Government Area, for allegedly killing his mother.

    Enedo spoke yesterday on why he killed his mother.

    He blamed the incident on his quest to make money at all cost, adding that he was lured into a fraternity.

    He said he has slept in the mortuary for seven hours as part of the money-making rituals.

    Tonna said: “I was asked by the chief priest of the society that if I wanted to be rich, I should go and have fun with a mad woman. I should also go and sleep with a body for seven hours; I should fast for seven days dry; I was told that I would first kill my father and the last stage is that I will go mad and after I might have completed all the condition, I will become the richest man in Africa, if not in the whole world.”

    He said he met all other conditions and was planning to kill his father when he mistakenly killed his mother.

    He said it was after he hit a metal on her head that he realised he had killed the woman he loved most.

    Tonna is a first-born from a divorced home. The parents divorced in 1984. He behaved like a mentally-challenged person in and around Obosi before the incident.

  • IVF: Nordica centre offers ‘money back’ scheme

    IVF: Nordica centre offers ‘money back’ scheme

    An In-vitro Fertilisation (IVF) clinic, Nordica Fertility Centre, has introduced a money back guarantee scheme.

    According to its Medical Director, Dr Abayomi Ajayi, the centre initiated the scheme as a result of interaction with clients who had undergone one form of assisted reproductive conception (ART) or the other, especially IVF.

    “Their concern has to do with the (perceived) high cost of the last resort (IVF) and its failure. So, they prefer to stay away.

    “As professionals, the scheme will also put us on our toes and bring the best of our skill to the core. We simply call it- ‘money back guarantee scheme,” he said.

    Ajayi explained how the scheme will work. He said: “The Nordica Money-Back Guarantee Scheme is a multiple cycle strategy that greatly increases the possibility of conception due to the sustained treatment of challenged couples over time. The product is the first of its kind in this market. It serves as an alternative to the pay-per cycle and, most importantly, comes with a money back guarantee, like the name suggests. The Guaranteed Cycle is a reflection of the confidence we have in the result that a multiple cycle strategy would deliver.

    “ The scheme gives you an option of three cycles and at least one Frozen Embryo Transfer (FET) treatment for N3.5 million for own egg patients and N4 million for recipients. Should the patient not get pregnant after this, there would be a refund of N500,000 technical fee (for both own egg and recipient). The scheme comes to an end anytime pregnancy is achieved even if after the first cycle. There will be no other refund, apart from the technical fee of N500,000, which is only due, after three cycles and at least one FET. There will also be no refund if the couple decides to pull out of the scheme after commencement,” he added.

    Speaking on the benefits, the Clinic Manager, Mrs Ranti Ajayi, said: “It gives realistic expectation on a clear cut path to success with multiple cycle offer. Client undergoes three cycles and at least one FET treatment plan, gets pregnant or gets a refund (money – back) of N500,000 technical fee; gets better personalised treatment at a discounted rate. The scheme ensures cost effectiveness for the multiple cycles as against single attempt.

    “Also, participants in the scheme are protected from price increase during the 18 months period. Patients with complications arising within the first 12 weeks of pregnancy (Ectopic or miscarriage) won’t be precluded from the scheme as long as treatment for the above has been taken care of (pregnancy is defined as a conception that goes beyond 12 weeks),” she said.

  • ABCON seeks compliance with money laundering law

    The Association of Bureaux De Change Operators of Nigeria (ABCON) has said bureau de change (BDC) operators should comply with the anti-money laundering policy being implemented by the Central Bank of Nigeria (CBN).

    Recently, the CBN announced some measures to check money laundering tendencies observed in the foreign exchange market. These include the ban on importation of foreign currencies, and suspension of 20 BDCs for not rendering returns and non-compliance with anti-money laundering regulations.

    ABCON Acting President, Aminu Gwadabe, said the measures of the CBN were in line with the group’s position on compliance with regulatory requirements.

    “When it comes to the issue of non-compliance with regulatory requirements, especially rendering returns as well as compliance with approved limits for foreign exchange transactions, the association has a zero-tolerance position.

    “We have made it known to our members that we would not hesitate to impose sanctions or report to the CBN, any member found guilty of not complying with these requirements. So we are fully in support of the actions of the CBN,” he said.

    He said such action is necessary to ensure sanity in the foreign exchange market, and most importantly the stability of the naira, which is critical to our economy.

  • Challenges of implementing money laundering against lawyers

    Challenges of implementing money laundering against lawyers

    The contract with company DC was executed by way of a deed of assignment made on February 14, 2007 between company DC and V Limited. Funds for the purchase of the £11 million high-priced asset were paid to the manufacturer of the asset through different shell companies around the globe. First, the sum of £2.5 million was transferred to company DC from a company based in country MY through the lawyer’s firm. The money from the company originated from an account opened and maintained by the public officer in the name of company S. Further funds were transferred to the lawyer’s firm from company AV.

    From the foregoing, it may be said that the lawyer played a very significant role in the near success of the money laundering scheme. This is a typical case of direct involvement of a lawyer in such a scheme. Some lawyers may be lured into money laundering schemes if they are not vigilant in their dealings with their clients.

     

    Central Bank Nigeria comes into the fray

    How did Central Bank of Nigeria come into the matter, one may ask? What is the connection of CBN with SCUML and FMIT&I? Let me attempt to answer these questions. Prior to the MLPA 2011, SCUML, through the National Advisory Council Against Money Laundering, applied persuasion towards implementation of the law on DNFIs. In February 2010, Nigeria made a high-level political commitment to work with FATF and GIABA to address its AML/CFT deficiencies in order to exit the list of countries that pose a high risk to the global financial system. As a result Nigeria set up the Presidential Committee on FATF which championed the enactment of and amendment to the MPLA of 2011. Section 7 of MPLA 2011 requires lawyers to keep their client’s record of identification for at least five years including the record of transaction and any report on suspicious transaction.

    Section 8 MLPA 2011 makes it mandatory for the records referred to in section 7 to be forwarded to CBN or NDLEA on demand or to any other regulatory agency as EFCC may, by gazette, specify. Section 9 MLPA 2011 actually gave the CBN a fundamental role by specifying that CBN may impose a penalty of not less than N1 million or the suspension of any licence issued to the lawyer for failure:

    (a) to designate compliance officers at management level at his head office and branch offices (if any);

    (b) to organize regular training programmes for his employees;

    (c) to decentralise information collected; and

    (d) to establish an internal audit mechanism to ensure compliance and ensure the effectiveness of the measures taken to enforce the provisions of the Act.

    Section 10 MLPA in the same spirit makes it binding and compulsory for a lawyer involved in a transaction as an individual to report every transaction in excess of N5 million, or N10 million or its equivalent in the case of the lawyer operating as a body corporate. Any contravention of this provision amounts to an offence liable on conviction to not less than N250,000 and not more than N1 million for each day the contravention continues.

    Pursuant to these and some other provisions, CBN, on August 2, 2012, issued a circular requiring all such account holders classified as DNFBPs (i.e. Designated Non-Financial Businesses and Professions), a euphemism for DNFIs, to update, within 6 months, their account information with their respective banks. The deadline was extended by another three months through another circular dated February 25, this year. On June 18, this year, the CBN conceded yet another extension to December 31 for ultimate compliance. The CBN claims that the circulars are in line with global best practice and consistent with the laws of the Federal Republic of Nigeria. Furthermore, the CBN has threatened to invoke the FATF rules to freeze accounts of all DNFBPs that fail to register with SCUML and forward evidence of such registration to the account holding bank on or before December 31.

     

    Changes imposed on lawyers under the Money Laundering (Prohibition) (Aamendment) Act, 2012

    Following pressure from FATF, GIABA, EFCC and CBN, presumably, the National Assembly amended the MLPA 2011 by enacting the Money Laundering (Prohibition) (Amendment) Act, 2012 (“MLPAA”), which became operative on December 21, last year.

    Section 3 of MLPAA 2012, which amended section 3 of the Principal Act, has virtually turned every lawyer to an investigator. It will be the responsibility of a lawyer to:

    (a) identify a customer, whether permanent or occasional, natural or legal person, or any other form of legal arrangements, using identification documents such as international passport, driving licence, national identity card or any other form of identification prescribed in any relevant regulation;

    (b) verify the identity of the customer using reliable, independent source documents, data or information; and

    (c) identify the beneficial owner and take reasonable measures to identity the beneficial owner using reliable information to the satisfaction of the lawyer.

    It is also the responsibility of the lawyer to undertake customer due diligence (CDD) measures when:

    – establishing business relationships;

    – carrying out occasional transactions above the applicable designated threshold;

    – carrying out occasional transaction that are wire transfers.

    A lawyer shall scrutinise transactions undertaken during the course of a business relationship to test consistency of information with his knowledge of the client, his client’s business and risk profile. A legal practitioner is further required to take measures to mitigate the risk he may encounter in his course of dealings with a client.

    Section 4 of the MLPAA 2012 amended section 6 of the Principal Act by asserting EFCC in the Amendment Act wherever “the Commission” appeared in the Principal Act.

    Section 5 MLPAA 2012 which amended section 9 of the Principal Act makes conjunctive compliance with the provisions of subsections (1) and (2). While Section 9 (2) of the Principal Act made payment of penalty disjunctive with withdrawal or suspension of licence of the lawyer, section 5 of the MLPAA 2012 makes both punitive actions conjunctive.

    Section 6 MLPAA amended section 10 (1) MLPA 2011 by just changing the word, “Commission” to “Economic and Financial Crimes Commission”, a meaning already ascribed to “the Commission” in section 25 MLPA 2011.

    Section 9 MLPAA 2012 amended section 15 of the MLPA by introducing a new section 15, which provides that:

    “15 (1) Money Laundering is prohibited in Nigeria.

    (2) Any person or body corporate, in or outside Nigeria, who directly or indirectly (a) conceals or disguises the origin of;

    (b) converts or transfers; .

    (c) removes from the jurisdiction ; or

    (d) acquires, uses, retains or takes possession or control of; any fund or property, knowingly or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act; commits an offence of money laundering under this Act.

    (3) A person who contravenes the provisions of subsection (2) of this section is liable on conviction to a term of not less than seven years but not more than 14 years imprisonment.

    (4) A body corporate who contravenes the provisions of subsection (2) of this section is liable on conviction to-

    (a)a fine of not less than 100 per cent of the funds and properties acquired as a result of the offence committed; and

    (b)withdrawal of licence.”

    From the foregoing, upon breach of any of the provisions of these money laundering laws, a lawyer operating as an individual risks serving a jail term of between 7 and 14 years or 100 pert cent of funds or properties acquired plus withdrawal of licence if he operates as a corporate entity.

    The import of the Amendment Act, therefore, is to broaden the scope of responsibility and tighten the nooze on defaulters by increasing the punishment prescribed by the Principal Act or stipulating new punitive measures. These money laundering laws are therefore booby traps which no lawyer can escape in the long run.

     

    Conclusion

    In view of the onerous provisions of the MLPA 2011 as amended in 2012, the Registered Trustees of the Nigeria Bar Association (NBA) instituted an action against CBN, EFCC and AGF at the Federal High Court, Abuja in Suit No. FHC/ABJ/CS/173/2013 probably to restrain the CBN and EFCC from invoking their assumed powers under the MLPA and MLPAA.

    One can now understand why lawyers are resisting the contents of the CBN circulars and the EFCC (or SCUML) prescriptions. A combined reading of sections 37 (1), 45 (1) and 1 (3) of the 1999 Constitution (as amended); sections 102,103 and 192 of the Evidence Act, 2011; and Rule 19 of the Rules of Professional Conduct for Legal Practitioners, all lend credence to the reason why lawyers are resisting the operation of the money laundering legal regime notwithstanding this safety verve provided by Section 6 (10) of the MPLA 2011:

    “The directors, officers and employees of financial institutions and Designated Non-financial institutions who carry out their duties under this Act in good faith shall not be liable to any civil or criminal liability or (sic) have any criminal or civil proceedings brought against them by their customers.”

    There are legal maxims that support that the provisions of the laws granting privilege to communication between a lawyer and his client supersedes those provisions of the MLPA and MLPAA, and relevant FAFT Recommendations that are in conflict. I refer readers to the age-long rule of interpretation of statutes as expressed in the maxim, generalia specialibus non derogant, which means that general things do not derogate from special things. This maxim, and the converse maxim of specialia generalibus derogant (meaning special words derogate from general ones), has been applied by the courts in a number of cases.

    In Kraus Thompson Org. v. N.I.P.S.S. [2004] 17 NWLR (Pt. 901) 44 at pp. 59, para. G-H and 65, para. A-E, the Supreme Court held that where an issue in a statute is governed by a general provision and a specific provision, the later will be invoked in the interpretation of the issue before the court. This is because the specific provision will be deemed to have anticipated the issue against the general provision.

    In the earlier case of Schroeder v. Major [1989] 2 NWLR (Pt. 101) 1 at pp. 18-19, para. H-G, Oputa, J.S.C. (as he then was) discussed some legal maxims that applies in this kind of situation, and these include:

    (i) General dictum generaliter est interpretandum: generalia verba sunt generaliter interlligenda, meaning “A general saying is to be interpreted generally: general words are to be understood generally.” In reference to this maxim, Oputa JSC held that Order 6 rule 15 of the High Court of Lagos State (Civil Procedure) Rules of 1972, which deal generally with service of process or documents by using general words as “any process,” “any document” did not envisage a particular process.

    (ii) Oputa further reinforced the above maxim with another one, Generale nihil certi implicat, meaning, “A general expression implies nothing certain.”

    If these maxims are anything to go by, one can safely conclude that special provisions of the law declaring the communication between a lawyer and his client privileged are superior to the general provisions of the anti-money laundering laws which require lawyers to expose this communication. In any case, we must await the verdict of the court.