The Unending Battle for the Nigerian Financial Intelligence Unit

August 21, 2017 | By Umar Yakubu

The Nigerian Financial Intelligence Unit (NFIU) is a department that is legally and operationally under the Economic and Financial Crimes Commission. It was a member, until its recent suspension, of the Egmont Group of Financial Intelligence Units. The Egmont Group provides a platform for its over 130 members to improve cooperation against money laundering and the financing of terrorism.

However, a few years after the inception of the EFCC, till date, its staff have lost their jobs, people have been prosecuted and persecuted, friendships have been damaged, brutal alliances have been formed and all sorts of negative energies have been dispensed over its control. All this bickering is over a government office that simply collates data from financial institutions and designated non-financial institutions, analyses and disseminates to relevant law enforcement agencies. Nothing more!

Some agencies of government, which have not properly executed their current mandates effectively, are eagerly vying to have the NFIU domiciled in their ministry, department or agency. The question to ask as a layman is, what is the attraction of the NFIU that has caused so much squabbling and in-fighting between persons and agencies for over ten years?

In the United Kingdom, a country Nigerians love to mention when drawing favourable comparisons, the Financial Intelligence Unit (FIU) is headed by a assistant director in the National Crime Agency. This assistant director reports to the deputy director, Economic Crimes Command, who also has a director, and then there is the deputy director-general and also the director-general. Though a critical role, that’s how ‘lowly’ placed the office is on the National Crime Agency architecture of the UK.

Also in the United States, the Unit is placed somewhere down the organisational structure in the United States Department of Treasury, our equivalent of Federal Ministry of Finance. Same goes for South Africa, India, Canada, Slovenia and dozens of countries that are doing well in running FIUs.

Here in Nigeria, we have all sorts of chess moves by those who want to move the Unit out of the EFCC and possibly, head it. The pertinent question to ask is whether it is wrongly placed in the EFCC, technically. Some may make an argument over the recent suspension of the NFIU from the Egmont Group, which is a very influential committee with high standards that must be adhered to by all countries. Big economies like Germany have been suspended for a violation, so Nigeria is not too big to have undergone that. Alhough the media reported that NFIU was suspended because of a petition was written by a dismissed staff, that is not important in this context.

The current anti-corruption war must not only be sustained but improved upon. Over the years, the FIU has been playing a critical role in the prevention of corruption, money laundering and financing of terrorism. The paramount thing for the government to do now is to strengthen it and empower it to do more.

What is relevant is the matter of whether the Egmont Group is making an issue about its domiciliation? Or has the Financial Action Task Force (FATF), another global standard setter on AML/CFT matters, insisted on where an FIU should be domiciled? There are a variety of arrangements for FIUs under four general headings: the administrative-type FIU, the law-enforcement-type FIU, the judicial- or prosecutorial-type FIU, and the “mixed” or “hybrid” FIU. Each classification has its advantages and disadvantages. But whatever chart a country chooses to adopt, the FIU must be operationally independent to carry out its functions effectively. That is what the Egmont Group harps on.

The main issue is that when the government decides to move it out of EFCC, because a high-powered committee has been setup over a small matter that can be resolved through subtle means, where will it be placed that it would have the said ‘operational’ autonomy it requires to work? Is the government going to elevate it to the level where the Head would report straight to the president, or would it still go through a line minister? That means once the president or minister fires the director or any other staff, then it’s adjudged that it’s no more operationally autonomous?

The current law places the FIU under the EFCC via the EFCC Establishment Act 2004. The Senate recently passed the Nigeria Financial Intelligence Agency (NFIA) Bill, within record time, and placed it under the Federal Ministry of Justice (FMoJ) or some say the Central Bank of Nigeria (CBN). Wherever it’s domiciled, what would be the reporting line of the head that would be different from the current position under the EFCC? Nothing. It’s simply a swap!

There is no need to debate whether it would function under the rumoured FMoJ or CBN. FIUs have done well under administrative and judicial structures in other parts of the world. A number of factors enter into the definition of the autonomy and accountability of the FIU. The law should protect the independence of the FIU by defining the manner in which its head is appointed and replaced, as well as ensure adequate funding for it. That is important. But the government needs to assess our peculiarities when deciding on its domiciliation.

The core functions of a FIU call for professionalism and objectivity in decision making, the timely processing of information, dissemination to appropriate authorities and strict protection of confidential data. Have any or all of these roles been compromised in the Nigerian case in a manner that warrants the need to relocate it from the EFCC as being presently attempted? It to forestall the breach of its principle of professionalism that makes the Egmont group insist that FIUs be allowed operational autonomy to carry out their tasks without undue interference.

Umar Yakubu is with the Centre for Fiscal Transparency and Integrity Watch. Twitter @umaryakubu