CISLAC, TI, back EFCC’s directive to bankers on asset declaration

The Civil Society Legislative Advocacy Centre (CISLAC) and Transparency International – Nigeria have welcomed the decision by the Economic and Financial Crimes Commission (EFCC) for operators in the Nigerian financial system, particularly bankers to declare their assets as from June 1, 2021.

This was made known in a statement for the two bodies signed by Executive Director – CISLAC, Auwal Musa Rafsanjani who doubles as Country Head, transparency International.

The statement reads:

The Civil Society Legislative Advocacy Centre (CISLAC)/ Transparency International – Nigeria welcomes the decision by the Economic and Financial Crimes Commission (EFCC) for operators in the Nigerian financial system, particularly bankers to declare their assets as from June 1, 2021.

The directive issued by the Chairman, Mr Abdulrashed Bawa is rightly in line with Sections 1 and 7 of the Bank Employees, etc. (Declaration of Assets) Act 1986, which compel Bank employees to make full disclosure of assets within fourteen days and provide a 10-year imprisonment sentence on conviction for offenses of unjust enrichment, respectively.

It is imperative to note that the 1986 law was enacted to ensure adequate measures in sanitizing the nation’s financial system by helping to prevent money laundering and illicit financial flows (IFFs) through which terrorism is largely funded, to effectively tax bank executives, and to expose illegal financial transactions. To say the least, the banking sector has been largely implicated in money laundering where they have been instrumental in the Initial entry or placement phase that involves the initial movement of an amount of money earned from criminal activity into some legitimate financial network or institution. This illicit act embedded into a legal trade has pervaded both the national and international business and banking industry with unabated vigor. Money laundering holds the potential to undermine socio-economic growth and development, political stability, democratic structure of the country and good governance, with the resultant effect of instigating social and political unrest within the country such as the recent happenings in Nigeria. With respect to IFFs which include the movement of money across borders that is illegal from its source, transfer or use, the CBN has a duty to monitor and supervise the foreign exchange market in Nigeria and is empowered to issue regulations and guidelines to market participants and financial institutions, including the regulatory framework for the importation of capital.

Despite the powers of and the checks that have been put in place by the CBN and other relevant institutions regulating the sector, it appears that the system is being manipulated as Nigeria loses between $15 – 18 billion annually to IFFs. While this has well established roles in hindering economic development, Illicit financial flows are crucial to a variety of illegal activities that undermine global and national security, from organized crime to financing terrorism. We also use this medium to call out other institutions like National security agencies who have a duty to counter these flows and are related to this context, to throw their full support behind this move by the EFCC, by using available instruments, one of which is the Bank Employees, etc. (Declaration of Assets) Act 1986. With the ongoing security crisis in the nation, there couldn’t be a better time for the introduction of this initiative. As regards tax evasion, in 2017 only 214 people in populous Nigeria paid taxes above N20 million; the Vice President disclosed also in 2017 that only 914 Nigerians pay between N10m and N20m in tax yearly and while 912 reside in Lagos, the remaining two reside in Ogun state; and the Federal Inland Revenue Service disclosed in 2018 that over 6,772 billionaires in Nigeria do not pay tax. This only buttresses the need to shore up efforts to ensure high net-worth individuals including banking executives, comply with their tax obligations.

Only last year, a number of global financial institutions including Goldman Sachs, Wells Fargo, Citigroup and JPMorgan, were issued fines for malfeasance ranging from money laundering breaches and facilitation of tax evasion, to close relationships with unsavory characters, following investigations.

The EFCC directive holds true benefits for reducing corruption in the banking sector and should not be perceived as a move to usurp or preempt the regulatory role of the Central Bank (CBN) but to complement it. This complementarity of roles is reminiscent of 2009, when the then CBN governor, Sanusi Lamido Sanusi (Muhammadu Sanusi II) invited the EFCC to prosecute managing directors and their collaborating senior management of banks that were shown to represent significant systemic risk. The directive will more than anything else serve to strengthen and complement the regulatory role of the CBN, the assessment role of the Auditor-General of the Federation on all public account records and oversight role of the National Assembly, as well as numerous existing anti-corruption instruments, including but not limited to the Declaration of Assets Act (1986), the Treasury Single Account policy for reducing the proliferation of bank accounts operated by ministries, departments and agencies (MDAs) towards promoting financial accountability among governmental organs; the Financial Transparency policy (2019); the Banks and other Financial Institutions Act; the Money Laundering (Prohibition) Act, 2011 (MLPA), Terrorism (Prevention) Act, 2011, Central Bank of Nigeria Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) Regulation, 2009 (as amended) and other AML/CFT Guidelines.

As we face one of the worst financial situations in our country’s history and look to improve revenue generation, every right-thinking Nigerian must accept every effort by government agencies and citizens alike to actualize these expectations through legal and democratic measures. We thus urge:

• The CBN to back-up and support the efforts of the EFCC in complementing their shared responsibility of sanitizing the banking sector which is expected of institutions fighting one just course.
• The relevant National Assembly committees, particularly the Senate Committee on Banking, Finance, and other Financial Institutions and the House Committee on Banking and Currency, to discharge their oversight mandates effectively and efficiently;
• the EFCC to remain undeterred in its resolve to champion reforms that will be instrumental to driving the anti-corruption agenda of the current administration; and
• the Private sector players especially the financial sector to see themselves as partners in progress to foster good governance and development to the teeming population of Nigeria.

We believe that national growth and development requires collective effort and we remain committed in our resolve to lend our voice and support to positive strides that have the potential to promote transparency and accountability and hold the interests of the citizens and the country at heart as it pertains to security, socio-economic development and national prosperity.

Auwal Ibrahim Musa (Rafsanjani)

Executive Director – CISLAC

Head – Transparency International – Nigeria.