Friday, October 30, 2020

Nigeria: Financial Intelligence Unit to tackle state governors in money laundering fight

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The Nigerian Financial Intelligence Unit has said it will soon put in place instruments to “tamper with” financial transactions and withdrawals by states and the federal governments as part of its mandate to curb money laundering.

The unit insisted that the ongoing legal action taken by the state governors against the guidelines on local government funds would not prevent it from carrying out its statutory responsibility, noting that it would also monitor financial transactions by local governments.

The NFIU Director, Mr Modibbo Hamman-Tukur, who disclosed this in a telephone interview with our correspondent on Monday, explained that the case of diversion of local government fund by a state government had been addressed, adding that tighter fiscal control had been put in place to prevent a recurrence.

Hamman-Tukur, however, said stronger action would be taken against the state if it again breached the NFIU guidelines.

Related: Nigeria: Weak governance leads to money laundering — NFIU director
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He stated, “We have spoken to the banks and they confirmed that the case of violation happened at the state capital level and they took immediate action to rectify it and from what we see, it cannot happen again, but if it happens (again), we have to take a stronger action.”

When asked what specific action the unit would take against the state, the director said, “The action we will take is in the guidelines; we will just take it to the next level. Our action with regard to money laundering and prevention of it extends up to functions, irrespective of what other people say.”

Unit planning to stop forex cash transactions

The Financial Intelligence Unit boss further said the agency planned to also take action against shell companies, noting that foreign exchange cash transactions in the country would soon be stopped.

The anti-graft agency explained that it had been working mainly with financial institutions to prevent diversion of public funds and money laundering, noting that the mandate of the state governments was different from its own.

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While defining the states’ mandate which it said included control, application and use of funds, the NFIU explained that its own responsibility was to address the vulnerabilities, risks and trends associated with stealing of the funds.

Related: Nigeria: NFIU Commences Financial Intelligence on 1st April

He stated that NFIU would take action if there was vulnerability, regardless of the opposition to its decision.

The unit argued that the state governments could not stop its work, pointing out that it was working with banks which were the institutions that could sabotage its operations.

Hamman-Tukur stated, “We work with the banks, so unless the banks sabotage it, there is no way they can stop us and you know the control of banks is vested in the Federal Government. They (governors) have their own issues and complaints, but our mandate is different from that of the state government.”

He added, “If there is vulnerability, whatever they say, we have to take action and local government fund is not the only area (we are focusing on). We are also coming on shell companies; we would also tamper with cash withdrawals by the federal and state governments later.

“There are other measures, including transactions in foreign exchange which is predominantly cash now, which we would have to stop because our currency is now denominated in the almighty US dollar.”

Speaking on the resistance to the guidelines preventing states from taking local government funds, the NFIU boss hinted that he had observed almost 90 per cent compliance.

Some LGs voluntarily remitting funds to states

He, however, revealed that some LGs were sending money back to the state governments after receiving their statutory allocations, adding that this was not easy for the NFIU to curb.

Hamman-Tukur expressed concern over the development, insisting that the NFIU would not condone the situation except in cases of mandatory deductions like remittances to the State Universal Basic Education Commission.

Related: Nigeria no longer high risk for money laundering, says NFIU

He explained, “Almost all of them (LGs) are returning money voluntarily. Like money for the Local Education Authority, after receiving the money, the local governments are returning the share that belongs to SUBEB.

“The local governments are obliging to mandatory deductions, but whatever that is left to them is their money and they are using it and many of them, most especially in the North, are using it to fight little problems.

“You will agree with me that in the last two months, there is macro-stability we are experiencing though not on a high scale, the environment is settling down.

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“We are just putting instruments to start monitoring directly, both the withdrawal and transactions. We understand that the state governors are willing to continue with the court cases because they feel that we are interfering with their mandate but our mandate is different from their own. Their mandate is control of the funds while our mandate is (stopping) money laundering; our work is completely different from their own.”

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