The pledge by President Muhammadu Buhari to recover allegedly looted funds from the previous administration is one of the commitments arising from his recent visit to the United States. The President was quoted to have said that he would arrest and prosecute past ministers and other officials who, allegedly, stole Nigeria’s oil and diverted government’s money into personal accounts. It may be too early and premature to summarily pronounce anyone guilty of looting without pronouncement of guilt by court of competent jurisdiction; nevertheless, it is useful to interrogate the strategies and legal framework available to the authorities in the quest for loot recovery within and outside the shores of Nigeria. This is the purport of this intervention.
Undoubtedly the scourge of corruption coupled with astronomical rate of embezzlement of public funds constitutes serious impediments to the developmental process of any country, including Nigeria. It is okay to strive at dispatching the perpetrators of these heinous crimes to prison after a detailed and fair trial proceedings but it is also useful to recover for the benefit of the state the proceeds of such criminal activities. This is technically referred to as loot recovery or the forfeiture of proceeds of crime. The latter objective is the essence of this article, the rationale being that other than penal measures of imprisonment of guilty persons, recovery of the financial benefit which is the motivation for the crime will greatly discourage potential perpetrators.
Given the fact that we operate a democracy with adherence for constitutionalism, rule of law, due process, including transparency and accountability, it is important to deploy strategies and identify legal framework for loot recovery that would not run foul of the prescriptions of the democratic traditions including the rights of citizens in line with best practices and international standards.
Clearly, recovery of looted funds particularly by way of forfeiture is an effective weapon of weakening and tackling the scourge of organised crimes in that such weapons if successfully implemented reduce the efficacy of carrying out such crimes as perpetrators are unable to access funds to carry and sustain such crimes apart from also providing a platform for restitution for victims of such crimes including serving as veritable sources of funding for developmental purposes of which law enforcement remains a critical component.
The question is given the challenges of loot recovery and the determination of this administration to recover looted funds, how can this be achieved and with what instruments and legal framework if achievable?
In my article published in one of the journals of the Nigerian Institute of Advanced Legal Studies I had observed as follows on the phenomenon of dirty money otherwise called illicit funds the subject of recovery or forfeiture.
‘Money laundering is one example of trans-national organised crime, and in the context of Nigeria it is regarded as one of the dangerous economic and Financial Crimes assuming such notoriety as to compel the draftsman to put in place a special legislative framework to address the scourge.
As a preliminary point there is a need to address the misconception of equating money laundering with currency trafficking as well as the era of perceiving money laundering as basically cross-border crime or trans-national crime. It is clear that there is pervasive incidence of money laundering within national frontiers and the salient feature of the crime would appear to be deploying proceeds derived from criminal activities such as illegal drug trafficking, corruption, dealings in narcotic drugs, any other crime or illegal act to lawful outlets and endeavours with the object of concealing the illicit origin of such funds with a view to avoiding the legal consequences thereof. The focus of money laundering therefore will appear to be against any form of ‘dirty money’ or funds derived from illegal activities technically referred to as money laundering’.
I had concluded in the said write-up by making the following recommendations:
‘It is clear from the foregoing that African countries must design a regulatory and policy framework that will strengthen international partnerships and sustain strong ties amongst themselves and other countries of the world to effectively address the crime of money laundering. This would require the ratification by countries of the United Nations convention and the passage of more effective money laundering and forfeiture laws. It is also important to investigate the points where the money is most vulnerable and identify what can be done to separate criminals from having access to their ill-gotten wealth.
There is also the need to strengthen international co-operation on information exchange and law enforcement; ensuring proper mechanism for handling suspicious reports and effective compliance culture among financial institutions that will ensure that proper systems and procedures are put in place. There is also the imperative of increased public awareness of the threat of money laundering as well as effective synergy that will lead to increased cooperation between multiple agencies (national and international). These agencies must ensure that their personnel are well trained in investigation and intelligence sharing.
It is also necessary to deploy more personnel and focus on new technologies and counter-measures of investigating suspected violations. Multiple law enforcement agencies must share information on forfeited proceeds among themselves as well as introduce measures that will make it difficult to conceal funds derived from illegitimate and unlawful sources.
The foregoing analysis may have revealed the harmful effects of money laundering within and across national borders with disastrous consequences on the financial communities and the economic development process. Clearly, the crime undermines legitimate businesses and competition, including impacting negatively on government tax revenue as well as reducing legitimate opportunities for genuine business operators.
It has also been shown that the increased sophistication of money laundering as well as its diverse mechanism and process pose grave challenges of investigation and prosecution within and across borders.
Finally, we have shown the need for countries to strengthen international cooperation, vigilance, legal and institutional frameworks to tackle the menace of money laundering’.
The above suggestions remain useful for addressing funds looted and starched abroad for Nigeria and any other African country faced with such dilemma.
With respect to funds sought to be recovered within the shores of Nigeria, what is to be done? Prof Adedeji Adekunle, the Director-General of the Nigerian Institute of Advanced Legal Studies has done extensive work in this area and his expertise will certainly be useful to the authorities in charting the way forward in our quest to recover looted funds. In his inaugural lecture titled: Proceeds of Crime in Nigeria: Getting our Act Right delivered in 2011, the erudite scholar addressed the issue comprehensively covering such areas as: ‘What kind of crimes/offences are proceeds important; Why should we be concerned with proceeds of crime; Basis and Forms of Forfeiture; Legal Framework for Forfeiture in Nigeria; Addressing Weaknesses and Gaps in the Law; Strengthening anti Money Laundering Measures; Asset Recovery and Management Agency; The forfeiture Regime should include Civil Forfeiture; Forfeited property and the criminal justice system’, and other far-reaching recommendations and suggestions. The erudite Professor had also written extensively on related areas in his article titled ‘Fair hearing and Law Enforcement: some recent developments; Seizure of proceeds of criminal activity: Trends in recent financial crimes; status and independence of Prosecutors in National systems: Nigerian Legal System in perspectives and the corporateorganisation and Business Crimes in Nigeria amongst others’. I recommend these works in dealing with the problem of loot recovery in Nigeria.
Without prejudice to the foregoing, what is clear from the research findings on the subject of loot recovery is that the drive must be pursued within the framework of constitutionalism and legality; meaning that we must first of all try to trace the assets representing proceeds of crime. Secondly, we must be able to restrain by judicial order dealings on such assets and lastly, we must set machinery in motion to obtain a final forfeiture order in respect of assets that have been restrained.
It is necessary to follow the law and the steps itemised above because it is difficult to trace proceeds of crime or looted funds given the fact that perpetrators of such crimes have also devised ingenious mechanisms and measures for concealing their illicit loot away from prying eyes. Justice Obaseki JSC in Igbinovia v State (1981) NSCC 63 at pp 68-69 acknowledged this fact when His Lordship observed as follows:
“In this area of the world where crimes of violence are on the increase and means of investigation are in their rudimentary stage of development coupled with the secrecy with which these crimes are committed and the abiding faith in the concealment of facts by whatever means by the perpetrators of these crimes, the responsibility of ensuring security for the lives and property of our citizens demands the detection of the perpetrators of these crimes by all means allowed by law. Detection of crimes is a never ending task the Police is called upon to perform and in the performance of this task they ought to be able to beat the suspects in their game of hide and seek…”
It is necessary to distinguish two forms of forfeiture. Again, Prof Adekunle posits:
‘There are two broad methods by assets of criminals can be forfeited to the state. The more common form – conviction based penal forfeiture and the lesser known (at least in these climes), civil forfeiture process that has been popularised in countries like the United States. The main distinction between the two forms is that in the latter, forfeiture is not contingent on a finding of guilt or proof of any offence, it being essentially proceedings against property as distinct from persons’.
Research findings in Nigeria show clearly that the legal framework for forfeiture in Nigeria is not contained in one piece of legislation, rather several legislations embody the law and practice of forfeiture with varieties depending on the nature of the crime and the legislation sought to be enforced.
Consequently, statutes, such as the EFCC Act; the National Drug Law Enforcement Act etc. the forfeiture regime could be targeted at the property which is the evidence of the commission of the offence, property forfeited to compensate the victim of the fraud or in circumstances where the instrumentalities of the crimes are confiscated and lastly where all the property traced to a convicted person are seized for forfeited to the state.
The other type relates to the forfeiture of the proceeds of a crime, meaning property derived directly or indirectly from the crime for which the accused was convicted or under trial.
There are provisions under the EFCC Act for example for interim forfeiture of assets during trial proceedings pending the determination of guilt of the accused person, the rationale being to prevent such assets traceable to the accused person from being tampered with or utilised to fight the system during the pendency of proceedings. Generally, the law provides for the power of confiscation for forfeiture of such assets that are successfully traced to the accused person arising from the criminal activity for which such accused person is standing trial.
There are also provisions under the Anti-Money Laundering Laws. Financial institutions are also under obligation under the 2011 Money Laundering Prohibition Act to put in place measures aimed at preventing the laundering of illicit funds and may be compelled to disclose to relevant agencies whether accused persons have beneficial interests particularly in bank accounts or any other source of investments with the bank in respect of suspects under investigation for offences bordering on corruption, drug trafficking, financial crimes or human trafficking.
Consequently, a useful strategy would be for the authorities to work closely with the banks and other financial institutions and enforce Anti-Money Laundering provisions on disclosures and other penal sanctions. Banks and other financial institutions who fail to cooperate or are in default of anti-money laundering legislation to be identified and prosecuted.
One effective strategy for the authorities on loot recovery is to enforce existing Money Laundering and other legislations impacting on illicit funds in Nigeria.This will require diligent investigation within and outside the country.
The other strategy is to identify the challenges of recovery of looted funds abroad. The challengesposed by national and cross-border investigation and prosecution of money laundering crimes, herculean as they may appear would seem not to exist without remedies and in reality it can be said that countries across borders may call in aid the guidance offered by the recommendations of the Financial Action Task Force (FATF) as well as the perspective offered by the United Nations model Legislation on money laundering and financing terrorism.
In addressing the scourge, the Financial Action Task Force (FATF) may have set a template for countries to follow in curbing the menace of money laundering. The Financial Action Task Force which was established by the government of the major industrial countries recommended that Anti-money Laundering Measures should be seen as an international responsibility and must be given priority by nations. This task force made forty recommendations on how to achieve eradication of money laundering with most of the recommendations embodied in the United Nations model law. These recommendations have since been increased to forty eight. Basically the recommendations highlighted a standardised international approach to the counter measures against money laundering.
In achieving these objectives, the recommendations highlighted the following main issues amongst others.
- Legislation
Member nations of the United Nations are requested to put in place a legislative framework against money laundering. This legislation is designed to universally criminalise money laundering in all countries of the world.Given the peculiarities in different countries every sovereign state is encouraged to identity the financial crimes they consider to be of serious nature within their frontiers and list such crimes in their money laundering law.
- Content of the Law
The recommendations also require states to put in place such preventive measures that will require banks and financial institutions to:
- Establish the identity of their customers before entering into business relationship with them;
- Keep record of the customers transactions;
iii. Report every lodgement and; or withdrawal by the customer which falls within the reportable threshold.
The recommendations also require that secret or coded account system be abolished and that bank secrecy acts should not be allowed to operate against investigation of money laundering.
- Assets for forfeitures
There are also far reaching recommendations designed to take away the gains of crime from the money launderers. In this respect, legislation is required to contain forfeiture clauses, apart from terms of imprisonment. This will allow the assets of the launderers to be confiscated by government upon conviction for such crimes.
- International Co-operations
There are also far reaching recommendations requiring cooperation between nations and international organisations on the issues of money laundering.This cooperation requires free flow of information and mutual assistance in the area of interdiction, investigation and extradition. Nations are also encouraged to ensure that they are not only signatories to, but would live up to the obligations of international initiatives against money laundering and other financial crimes.
- Institutional Framework
The body equally recommended an institution which would be charged with the responsibility of enforcing, monitoring the law as well as regulating the institutions on whomthe law has imposed obligations.
The recommendations also contain provisions on ‘the role of legal systems in combating money laundering’; ‘provisional measures and confiscation’, role of financial system in combating money laundering, measures to cope with the problem of countries with no or insufficient ant-money laundering measures as well as ‘other measures to avoid money laundering’. The recommendations also specify for the ‘implementation and role of regulatory and other administrative authorities’ including measures for ‘strengthening of international cooperation’.
It can be said that these recommendations constitute good theory on paper but the implementation of same in domestic legal systems in Africa, including Nigeria (may depend on other variables including political and economic indices on ground). The political will and determination by the Buhari administration is important. It is also critical to put in place policies that would facilitate the blockage of leakages in the system and allow return of looted funds this will include thorough investigation to ensure looted funds are successfully traced.
Secondly, once such assets of suspects under investigation are identified, agencies concerned must initiate restraint/seizure proceedings to obtain interim forfeiture orders.
Thirdly, the judicial mechanism to obtain final seizure orders of property of convicted persons must be effective and efficient.
The scenario whereby there is no single piece of legislation on forfeiture of assets in Nigeria is unhealthy. Therefore, I agree with Prof AdedejiAdekunle’s suggestion that ‘Nigeria is in dire need of a comprehensive law on proceeds of crime’. The authorities might want to take the hint by initiating an executive bill for an Act providing for a comprehensive provision on proceeds of crime in Nigeria. There is also the need to strengthen existing Anti-Money Laundering Measures in line with best practices and international standards.
The other issue is how to address the looted funds recovered in view of several allegations and counter allegations that such recovered funds are not properly accounted for making the suggestion of an Asset Recovery and Management Agency imperative. Experts should work on this immediately.
Finally, if the drive for the recovery of the looted funds is to be successful, we need to strengthen national systems in a manner that would encourage diligent investigation to trace looted funds, strengthen the adjudicatory process to ensure that recovery of looted funds follow due process and are dealt with dispatch, we need to strengthen anti-money laundering measures and seek collaboration with national and international agencies including sub-regional, regional and international community and agencies in facilitating the recovery of looted funds. Where necessary, memorandum of understanding bilateral and multilateral treaty obligations may have to be worked out to achieve this objective.
Looted funds are specie of corruption. It is salutary that the US, the world major power has offered to assist us. We should leverage on this and also seek the cooperation of the international community as a whole in helping Nigeria to recover looted funds.
