Nigeria is
making significant inroads into the fight against corruption. Charges are being
brought against people in Nigeria for corruption and fraud allowing
significant amounts of cash to be recovered. And the country has achieved some
success in recovering the proceeds of corruption laundered offshore, notably
the return of US$700 million by Switzerland.
But not every country
is cooperating. As an Australian Federal Police officer, I have experienced the
frustration of attempting to recover the proceeds of crime earned
in Australia and laundered overseas. Recovering the proceeds of crime
in other countries involves a minefield of legal, logistical and financial
issues. However, the chances of success can be increased by undertaking a
thorough criminal investigation in country, having local money laundering laws
that are robust and which have extra territorial reach, and by the appropriate
use of informal and formal asset recovery arrangements.
If Nigeria is seeking to rely on
international legal arrangements alone to recover the proceeds of corruption
offshore, for example the UN Convention Against Corruption, then in many cases
it could be sadly disappointed. Or it should be prepared to wait a long time
for its money. Many countries and institutions are reluctant to cooperate as
they do not want to give up any money easily, even if it is illegally obtained.
They make a living out of the shadow or dark economy. Nigeria therefore needs to take
the gloves off and get tough on the international scene with asset recovery.
Otherwise, countries and organisations will continue to brush off Nigeria using any legal loophole
possible.
To enhance its asset
recovery options, Nigeria should develop its own asset recovery
framework that not only works with current international asset recovery
arrangements but extends beyond them when those arrangements do not work.
Enhancements the Nigerian Government should consider include:
Upgrading domestic criminal money laundering laws by increasing the penalties up to 25 years imprisonment.
Upgrading domestic criminal money laundering laws by increasing the penalties up to 25 years imprisonment.
Expand the physical
act of money laundering to include receiving, possessing, concealing, disposing
off, engaging in a transaction or exporting or importing the proceeds of crime
from Nigeria. Having a very wide framework that captures every conceivable act
of money laundering, expands the chances of prosecuting those involved and
recovering illegal assets.
Include recklessness
and negligence as mental elements in money laundering offences, as is the case
in Australia or reverse onus provisions as with Hong Kong.
Changing the mental element of money laundering as recommended will make it
easier for Nigeria to prosecute professionals in that country and
abroad who handle the proceeds of crime including corruption. For too long
professionals who have advised and assisted criminals to launder money have
evaded prosecution, as they have argued that they did not know the money was
the proceeds of a crime. Changing the mental element to recklessness or
negligence, means that professionals including bankers should have known the
origin of the funds, and should have taken steps to find out the source.
Introduce
non-conviction based civil forfeiture laws in Nigeria for all serious
offences including illicit enrichment provisions (also known as unexplained
wealth).
Introduce a criminal
offence for all politicians and public servants who have unexplained wealth
that they cannot explain, as is the case in Hong Kong.
Extend Nigeria’s
money laundering laws to include all Nigerian citizens (with no exemptions for
politicians); and all Nigerian residents wherever they live; all Nigerian
registered companies wherever they operate and to all persons and companies who
“cause a money laundering harm to Nigeria”. The latter provision would
apply to any person or company that promotes a scheme or who provides a service
that is used to launder money from or to Nigeria. It would apply to
offshore promotors, bankers, property developers and managers etc who earn huge
amounts of money by handling the proceeds of crime, including funds derived from
corruption or who provide advice on how to conceal or move illegal funds. Any
person or company who receives, possesses, conceals or transfers etc, money
derived from corruption or other serious offence would commit an offence
against Nigerian law, regardless of where they live or their nationality.
Develop multi-agency
task forces in Nigeria combining the resources and powers of all
agencies including the NFIU, EFCC, NDLEA, Nigeria Customs and Federal and State
taxation departments. The function of the task forces would be to pursue money
laundering relating to all crime, and to recover the proceeds of crime. With
illegally earned cash and assets it is very difficult to proof that they are
tainted. A multi-jurisdictional and agency approach, increases the changes of
establishing that funds were derived from crime.
Ban any international
bank that refuses to cooperate with the Nigerian Government from operating
in Nigeria.
Prevent any Nigerian Bank from having a corresponding bank arrangement with any international bank, that refuses to cooperate when it holds the proceeds of crime laundered from Nigeria.
If implemented the
above changes will strengthen Nigeria’s arsenal in combating corruption
and major crimes domestically, bringing to task those professionals who profit
from laundering the proceeds of corruption and serious crimes and recovering
the proceeds of crime offshore. In a practical sense, the above measures would
operate as follows:
A request for mutual
legal assistance in criminal matters to a country to gather evidence of a
criminal offence and to recover the proceeds of crime should be drafted in the
widest possible terms. Many countries make the mistake of only seeking evidence
in relation to one crime type or one offence. From experience, a request should
seek evidence relating to as many major offences as possible including tax
evasion and money laundering. Money laundering should always be included where
funds are involved. As an act of money laundering would have been committed to
get illegal funds out of Nigeria. And as all illegally earned income is
taxable, tax evasion should be included. This is reinforced by changes to
international money laundering standards making tax evasion a criminal offence
of money laundering. Forming multi-agency teams enables wide reaching multiple
offence mutual assistance requests to be submitted to a foreign country.
Any criminal
investigation should in addition to targeting the main offenders, also focus on
those persons offshore who have received the proceeds of crime or continue to
possess or control the proceeds of crime or who have assisted in the movement
of proceeds of crime. Warrants for their arrest should be grounded
in Nigeria and alerts raised with Interpol. Any request for
assistance should include the extradition of those people
to Nigeria as well. If the country in which those advisors reside,
does not hand them up for extradition, thenNigeria needs to be patient and
monitor them until they can be arrested when they visit a country that is prepared
to assist.
Once Governments,
organisations particularly international banks, and professional firms realise
that the Nigerian Government is targeting the facilitators of corruption and
money laundering, there will be a significant change in attitude towards
cooperating withNigeria.
By Chris Douglas
*Douglas is a Director, Malkara Consulting
(Australiaand Singapore)
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