Why we rejected new Money Laundering Bill – EFCC

Anti-Money Laundering
Anti-Money Laundering

The Economic and Financial Crimes Commission (EFCC) yesterday rejected the new Money Laundering (Prevention and Prohibition) Bill 2016 because it may prejudice President Muhammadu Buhari’s anti-corruption agenda.

It said passing the bill into law now will affect Nigeria’s application for the membership of the Financial Action Task Force (FATF).

To the agency, the bill seeks to divest EFCC of powers to probe offences bordering on economic and financial crimes. Besides, said the agency, it will, if passed into law, give the Attorney-General of the Federation (AGF) some discretion which may be abused.

It also faulted plans to establish a Bureau for Money Laundering Control (BMLC) for a service which is already being rendered efficiently by the Special Control Unit against Money Laundering (SCUML).

The EFCC, which made its stand known in a position paper presented to the National Assembly, spotted 12 gaps which it believes could impede the government’s anti-corruption.

A copy of the report was yesterday presented to the House Committee on Economic and Financial Crimes in Abuja at a closed-door review session.

The paper said in part: “The bill appears complex and difficult to decipher as it is riddled with complex web of cross references.

“Clause 15(4) (c) is unconstitutional as it is retroactive because it is designed to subject persons to prosecution under this bill for offences committed before its enactment into law.

“Clauses 18(5), (6) and (7) are in conflict with Section 7(2) of the EFCC Act as they seek to divest EFCC of its powers to cause investigation into economic and financial crimes offences and, by extension, attempt to transfer the statutory powers of the EFCC to an unknown and non-existent agency—Proceeds of Crimes Recovery and Management Agency.

“Clause 14(2) of the bill provides that Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) are competent but not compellable to give evidence in criminal proceedings arising from the report which they make under the bill.

“The effect is that there will be challenges in the successful prosecution of money laundering related offences.

“Moreover, this clause is contrary to the provisions of the Evidence Act as the issue of competency and compellability of witnesses are settled principles of a law under the Evidence Act and judicial authorities.”

The EFCC also faulted discretionary powers given to the Attorney-General of the Federation on reporting of money laundering cases and the amounts payable by offenders.

It said such powers may be abused if any AGF is not well-intentioned.

The paper added: “Considering the importance of reporting in an Anti-Money Laundering (AML) regime, it will be counter-productive to leave reporting obligations to the wide discretion of the Attorney-General.

“This is liable to abuse if the person occupying the office of the Attorney-General at any material time is not well-intentioned. He may adjust the regulations at will to serve or protect some interests. The same applies to making of cash payments under Clause 16 of the bill.

“Moreover, Clause 19 of the bill provides that: ‘The Attorney-General shall, by regulations made on the recommendations of the supervisory authorities set out the prescribed amounts and the specified particulars referred to in sections 16(2) and 17(1) and 18(1) of this Act’

“This will likely create uncertainties and challenges in the enforcement and compliance processes. It is also burdensome for the prosecution who will have to look at two or more documents in order to frame charges for money laundering.”

On the plan to establish Bureau for Money Laundering Control (BMLC), the EFCC said it is unnecessary because the same service is being rendered efficiently by the Special Control Unit against Money Laundering (SCUML).

Clauses 35 to 49 of the bill seek to establish an agency known as the Bureau for Money Laundering Control which will be a body corporate, with its own staff and advisory board that will be responsible for the supervision of designated non-financial businesses and professions in their compliance with the provisions of the bill and relevant regulations.

“The work that the agency is to do is already being done by SCUML (which the bill dissolves in Section 49). It has not been shown that SCUML has been ineffective to warrant it being dissolved and another agency set up to carry out its functions.

“Furthermore, making the BMLC a body corporate will expose it to unnecessary litigations by persons who do not want to comply with applicable regulations under the AML. By the nature of its operations, it should enjoy a substantial measure of anonymity under another body.

“In addition, setting up an agency as stated above will further proliferate government institutions when the government’s policy is to streamline or merge existing ones in order to cut cost.”

The EFCC told the National Assembly that the nation does not need the proposed Money Laundering (Prevention and Prohibition) Bill 2016.

The commission added: “It is against this backdrop that the commission is of the opinion that the proposed Money Laundering (Prevention and Prohibition) Bill 2016 is unnecessary; posits that whatever perceived gaps in the existing legislation(as amended) are not such that cannot be addressed by an amendment.

“In the light of our highlighted observations, it is apparent that the entire bill as constituted will likely prejudice the President’s fight against corruption as it will allow money laundering to thrive in Nigeria.

“In view of the above observed deficiencies inherent in the bill, we recommend as follows:

It is not advisable to pass the bill into law
The existing AML has no deficiencies that cannot conveniently be cured by an amendment.
In view of Nigeria’s current standing in the international community on the robustness of its AML/CFT regime, it will be counter-productive to pass this bill into law.
The bill is not timely as its passage will affect Nigeria’s standing in the next round of Mutual Evaluation
Passing of the bill into law at this time will affect Nigeria’s application for FATF membership since Nigeria’s acceptance is based on the current Anti-Money Laundering Law (AML).
Passage of the bill may subject Nigeria to an FATF International Cooperation Review Group process to determine if the law meets the FATF Standards, and if not Nigeria may be subjected to a complex ICRG compliance process

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