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AN EXAMINATION OF LEGISLATIVE FRAMEWORK FOR COMBATING MONEY LAUNDERING IN NIGERIA

Project topic for Law department.

CHAPTER ONE

INTRODUCTION

  •   Background of the Study

The inspiration of this topic is initiated by our social and political appraisal of Money Laundering activities in Nigeria especially under the recent past political dispensations. It is not unusual to find where all legislative frameworks at combating money laundering have been exhaustively discussed, but efforts are made in this research work to bring about such enormous contributions, if not exhaustive one to the theme.

Recent discoveries in communication science and information technology have spawned significant changes all over the world, particularly during the last quarter of the 20th century. These changes have the potential of transforming the world into what is metaphorically referred to as “a global village”. Deregulation, liberalization and globalization, which have become the ‘buzz words’ in inter-state relations hold the ace in eliminating many forms of restrictions, including those on free movements across international borders, that are embedded in economic policies and found in the markets, thus, making the world truly one entity. This process of societal transformation provides a quantum of opportunities for growth and development. This is the good news about the so-called technology revolution and globalization. The bad news, however, is that the process also provides opportunities for criminal activities. Financial crime is one of the negative or dark sides of these developments. The Economic and Financial Crimes Commission Act 2002 of Nigeria defines economic and financial crimes as “non-violent criminal and illicit activity committed with the objective of earning wealth illegally either individually or in a group or organized manner…these include any form of fraud, narcotic drug trafficking, money laundering, embezzlement, bribery, looting and any form of corrupt practices,  illegal arms deal, smuggling, human trafficking and child labour, oil bunkering and illegal mining, tax evasion, foreign exchange malpractice, including counterfeiting of currency, theft of intellectual property and piracy, open market abuse, dumping of toxic wastes, and prohibited goods, etc”. In this connection, financial crime encompasses almost all forms of organized transnational crime [1].

With technology, organized crime has become adaptable, more sophisticated, more daring and with global reach. Criminals have realized that there is more profit and less risk in white-collar crime that in violent or conventional crimes. Exposing the harm in financial crime is the very basis of white collar criminology. White-collar offences like advance fee fraud, corruption, drugs and human trafficking and related money laundering and their negative impacts on society have been well documented. However, significant differences in forms, extent and manifestation exist, thus, calling for more specific studies to unravel their characteristics, impacts and effects on different societies [2].

The power of the Commission to investigate all financial crimes including advance fee fraud, money laundering, counterfeiting, illegal charge transfers, future market of negotiable instruments, computer credit card fraud, contract scam etc has been subjected to judicial contest and some pronouncements. The end result is that the trials of Politically Exposed Persons (PEPS) are unnecessarily delayed and thus no appreciable progress has been achieved over the years [3]. In most of these cases, the trial hardly go beyond the initial stage of arraignment before being stalled owing to multiple preliminary objections ranging from challenges of territorial jurisdiction of the trial courts, the propriety of the indictments/charges and to a larger extent, the authority of the prosecuting authorities to try the accused persons, often citing the federal system envisaged in the Nigerian Constitution as an excuse. [4] In Federal Republic of Nigeria v. Peter Mba and Others, [5] the accused inter alia challenged the propriety of their indictment and the authority to prosecute them on offences against laws made or deemed to have been made by the State House of Assembly alluding to the Federal system of government of Nigeria, with autonomous tiers. The accused persons contended that the National Assembly was in error in the establishment of the EFCC (Establishment) Act, 2004 in so far as it invested upon it the power to try corruption and money laundering cases in respect of funds belonging to the state government. The appeal succeeds in the Court of Appeal. However, this matter was laid to rest at the Supreme Court in Attorney General of Ondo State v. Attorney General of the Federation. [6] The court held that the National Assembly have the power to enact the EFCC (Establishment) Act, 2004, the Money laundering Act etc. The EFCC Act, 2004 criminalizes participation of financing of terrorism by any means whatsoever and provides punishment for life imprisonment. Section 15 provides:

  • A person who wilfully provides or collects by any means, directly or indirectly, any money from any person with intent that the money shall be used for any act of terrorism, commits an offence and is liable on conviction to life imprisonment for life.

(2) Any person who commits or attempts to commit a terrorist act or participates in or facilitates the commission of terrorist act, commits an offence under the Act and is liable on conviction to life imprisonment;

(3) Any person who, makes funds, financial assets or economic resources or financial or other assets or relates services available for use of any other person to commit or attempt to commit, facilitate or participate in the Commission of a terrorist act is liable on conviction to imprisonment for life.

  •     Statement of the Problem

Like many other developing countries, Nigeria government has been grappling with the problems of under development and effective implementation of good policies to enhance socio-economic development. Lack of effective measures by the Nigeria government to block leakages and bring sanity to the proper management of both government andprivate businesses led to among others the establishment of Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and Other related offences Commission (ICPC) etc, yet the desired outcomes have not been achieved due to obvious reasons. The government has continued to lose money through cyber and Economic and Financial Crimes, and this scenario has created high level of public sector deficits financed mostly through external borrowing. The end product of this tendency if not drastically checked is that government policy is likely to be always distorted and healthy economic development will be difficult to achieve.

  •   Aims and Objectives of the Study

The aims and objectives of this research are the following:

To examine nature of money laundering as financial crimes

To examine the nature of Economic crimes

To examine the legislative framework within which money laundering as financial crimes can be combated.

To analyze whether or not the Nigerian government can provide efficient machineries against financial crimes.

To make recommendations aimed at directing the government on how to successfully initiate and implement policies aimed at eradicating money laundering crimes in Nigeria.

  •   Research Methodology

This research work is based on primary and secondary sourced materials. The primary sources include the Nigerian Constitution, E.F.C.C. Act, I.C.P.C. Act, Nigeria Financial Intelligence Unit (NFIU) and other statute books.

The secondary sources include Textbooks written by Nigerian and foreign authors, information on publications of the Bureau of Public Enterprises. Articles on Nigerian

Newspapers, dictionaries and internet sources, giving the global nature of the research topic.

1.5       Research Questions

This dissertation would be based on the assertion that successive Nigerian governments especially the administration of President Olusegun Obasanjo have adopted various policies and legal framework aimed at fighting money laundering.

Therefore this dissertation is concerned with answering the following questions:

What is the nature of Economic and financial crimes in Nigeria?

What is the extent of Economic and financial crimes, especially money Laundering in Nigeria

How is the legislative and other legal frame works aimed at combating money laundering in Nigeria

How can greater reliance be put on the public sector based on the fight against

            Money laundering and financial crimes in Nigeria?.

      What is the way forward?

  •    Significance of the Study

This research is intended to examine legislative framework for combating money laundering in Nigeria and general. It will also make possible suggestions for the sustainability of the reforms aimed at fighting Economic and Financial Crimes in Nigeria.

It intends to concentrate on E.F.C.C. as a case study but with comparative references to other government bodies established by law to fight financial crimes. It will give a general overview of financial crimes within Nigerian jurisdiction in comparison to other jurisdictions with possible novel suggestions at curbing this menace.

  •   Synopsis of Chapters

This work carefully assessed an examination of legislative framework for combating money laundering in Nigeria. The work is divided into five chapters; Chapter One:

Background of the study, Statement of Problem, Aims and Objectives, Research Methods,

Significance of the Study, Scope and Limitation and Synopsis of Chapters.

Chapter Two: Definition, Sources and Causes of Money Laundering as Financial Crime,

Review of Corrupt Practices , Nature, Types, and Patterns of Corruption, Embezzlement, Theft and Fraud , Financial and Economic Crimes in Nigeria.

Chapter Three: Nature of Money laundering as financial crimes and corrupt practices, money laundering and financial crimes as corruption, examination of legislative framework for combating money laundering in Nigeria, review of institutional framework for control of money laundering as financial crime in Nigeria, the legislature, the executive, the judiciary, the bench, the bar, the mass media, educational institutions, the police and the politics of money laundering as financial crimes in Nigeria.

Chapter Four: examination of the E.F.C.C, establishment of economic and financial crimes commission, overview of E.F.C.C Act, extent of economic and financial crimes in Nigeria, efforts of the EFCC in combating money laundering as financial crime in Nigeria and some other notable convictions secured by the E.F.C.C.

Chapter Five: Summary, Conclusion, recommendations and Bibliography.

1.8   Scope and Limitation

The scope of this research project is examination of legislative framework for combating money laundering in Nigeria but the vast nature of the country and the scarce resources at our disposal has in no doubt limited writer’s effort to sample the opinion of each citizen in all the states in Nigeria. It is because of this reason that some states were selected for the research work.

1.9   Definitions / Literature Review/ Conceptualization of Terms

This study is based on the views which have evolved over the years in respect of the nature and extent of Economic and Financial crimes particularly in Nigeria. Many published Articles contributed immensely towards the fulfillment of this work and they include the following; A.U KALU, ‘legislative and institutional efforts at combating money laundering, advance fee fraud and other illicit transaction’-Lawyers Bi annual journal of Nigerian and Comparative Law, Vol.3 No2, October,1999. A.A ADEYEMI, ‘Corporate Fraud in Nigeria the Criminological Perspective’ Lawyer’s Bi annual, Vol 2. No 2,October 1995. Also, the texts by Bortner, Mark R. (1996): “Annonymous Digital Money laundering”, Doig Alan (1998) “Dealing with Corruption”, Elliot (1997) “Corruption and global economy”, Tony Oladoyin (2000) “Tackling the Corruption Epidemic in Nigeria”, Odekunle and Lame (2001) “Fighting Corruption and organized crime: The challenges of the New Millennium” Mohammed, A.A. (1996) “Drugs and Crimes”, Abdullahi Y. Shehu (2006) “Economic and Financial Crimes in Nigeria: Policy issues and options” Frank Asogwah and Pontian Okoli (2008) “Economic Crimes and National Development” and many more text books all provided the required legal materials, tools and source in which this research was actualized.


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