The anti- money laundering bill which is going through a clause by clause consideration, since last week has again suffered a setback as the lawmakers stood down the report.

The senate called off further deliberations on the bill due to the absence of the chairman of the senate committee on drugs, narcotics, anti-money laundering and fraud Senator Sola Akinyede who authored the bill.

The lawmakers disagreed on section 16 of the bill which stipulates 25% forfeiture, should an individual be found wanting of non disclosure of financial transaction ,a section of the senators wanted the punishment to be total forfeiture while other noted that that will be high handedness.

Absence of the chairman of the committee to explain the Recommendation of the Committee on the clause led to Senator Nuhu Aliyu moving a motion that further consideration of the bill be suspended to another legislative day when the chairman will be available.

He argued that the bill was to complex and important to be discussed without the chairman being available.

It would be recalled that the lawmakers on the previous legislative day disagreed on a section of the bill which allowed the tapping of the phones and computers of individual as it would be an infringement on the rights of Nigerians.

When passed into law, the new anti-money laundering bill will replace the 2004 version which is said to lack the relevant provisions that will make it fully compliant with the recommendation of the financial action task force.

The Bill

The Senate, through its committee on drugs, narcotics, financial crimes and anti-corruption is on the verge of putting in place a new law which would make comprehensive provisions to prohibit the financing of terrorism as well as the laundering of proceeds of a crime, or an illegal act.

Suffice to say that the new bill would also provide appropriate penalties and expand the scope of supervisory and regulatory authorities so as to address the challenges faced in the implementation of anti-money laundering regime in Nigeria.

According to the report, a transfer to or from a foreign country of funds or securities by a person or body corporate including a money service business of a sum exceeding US$10,000 or its equivalent, shall be reported to the Central Bank of Nigeria and the Securities and Exchange Commission in writing within 7 days from the date of the transaction.

Another hurdle provided in the new bill that would also help the country in reducing the alarming rate of money laundering is the provision that transportation of cash or negotiable instruments in excess of US$500 by individuals in or out of the country shall be declared to the Nigeria Customs Service. While a body corporate shall be required to provide proof of its identity by presenting its certificate of incorporation and other valid official documents attesting to the existence of the body corporate.

Another provision is that a casual customer shall comply with the provisions of the sections of the bill for any number or manner of transactions including wire transfer involving a sum exceeding US$1,000 or its equivalent if the total amount is known at the commencement of the transaction or as soon as it is known to exceed the sum of US$1,000 or its equivalent.

However, the bill states that where a financial institution or designated non-financial institution suspects or has reasonable grounds to suspect that the amount involved in a transaction is the proceeds of a crime or an illegal act it shall require identification of the customer notwithstanding that the amount involved in the transaction is less than US$1,000 or its equivalent.

The committee however, raised objections on the provisions that a customer would likely not be acting on his own account, yet the financial institution or designated non-financial institution shall seek from the customer by all reasonable means, information as to the true identity of the principal and where the customer is a legal person, the financial institution or designated non-financial institution shall take reasonable measures to understand the ownership and control structure of the customer.

The objection of the committee was also raised where the non-financial institution would also determine the natural persons who ultimately own or control the customer.

The committee also queried the provision that in the case of the politically-exposed persons, the financial institution or designated non-financial institution shall in addition to the requirements of sub sections (1) and (2) of the Act, put in place appropriate risk management systems and obtain senior management approval before establishing any business relationship with the politically exposed person. According to the committee however, the phrase "politically exposed persons" should be substituted with 'public officers'.

It explained that politically exposed persons are defined as individuals who are or have been entrusted with prominent public functions both within and outside Nigeria and those associated with them.

According to the committee, "this definition disregards situations where for example a junior level 07 officer with say National Diploma in computer Science manipulates and diverts funds. He is not entrusted with prominent public function and therefore will not be liable under this section. Rather than the use of the phrase 'politically exposed persons' the phrase 'public officer' is suggested as politically exposed are also public officers".

The bill also seeks to provide stiffer penalties for financial institutions which fail to comply with the requirements of customer identification and the submission of returns on such transactions as specified in the Act within 7 days from the date of the transaction. Thus, the committee jacked up the N25,000 fine for each day during which the offence continues, to N250,000, and the suspension, revocation or withdrawal of licensing authority as the circumstances may demand.

The report also states that the directors, officers and employees of financial institutions and designated non-financial institutions carrying out their duties under the Act in good faith shall not be liable to any civil or criminal liability nor have any criminal or civil proceedings brought against them by their customers.

This presupposes that the directors of the financial institutions, particularly the banks where some of these transactions take place would no longer be afraid of any legal tussle with dubious customers whose actions or transactions have been reported to the anti-corruption agencies.

The bill also makes it mandatory that all financial institutions and designated non-financial institutions must develop programmes to combat crimes, and these ought to include the designation of compliance officers at management level at their headquarters and at every branch and local office. Also, there must be regular training programmes for their employees, the centralization of the information collected and the establishment of internal audit units to ensure compliance with and ensure the effectiveness of the measures taken to enforce the provision of the Act.

The bill also talks about mandatory disclosure by financial institutions to the commission in writing within 7 and 30 days respectively in any single transaction, lodgement or transfer of funds in excess of N5,000,000 or its equivalent, in the case of an individual or N10,000,000 or its equivalent, in the case of a corporate body.

It also states that any financial institution or designated non-financial institution that contravenes the provisions of the Act is guilty of an offence and shall be liable to a fine of not less than N100,000,000 and not more than N250,000,000 for each day the contravention continues.

The Bill also places surveillance of bank accounts on the commission, agency , the Central Bank of Nigeria or other regulatory authorities pursuant to an order of the Federal High Court obtained upon an ex- parte application supported by a sworn affidavit made by the chairman of the commission or an authorized officer of the Central Bank of Nigeria or other regulatory authorities justifying the request, may in order to identify and locate proceeds, properties , objects or other things related to the commission of an offence under the Economic and Financial Crimes Commission Act.

By this, the commission is empowered to place any bank account or any other account comparable to a bank account under surveillance, tap any telephone line or place it under surveillance, obtain access to any suspected computer system, obtain communication of any authentic instrument or private contract, together with all bank, financial and commercial records, when the account, telephone line or computer system is used by any person suspected of taking part in a transaction involving the proceeds of a financial or other crimes.

Suffice to say that the new bill if passed into law would go a long way in eliminating the rate of money laundering activities in the country and further empower operators of banks to report any suspected crime without fear of being dragged in a legal battle with dubious customers.