EFCC and Fight Against Money Laundering in Nigeria Between 2013 and 2016

EFCC and Fight Against Money Laundering in Nigeria Between 2013 and 2016

ABSTRACT

The research topic on EFCC and the fight against money laundering in Nigeria between 2013 and 2014 aimed at determining the effect of EFCC participation on the alleviation of money laundering in Nigeria. the study looked at the concept of money laundering and some theories to back it up, the primary data was used for the research work, and chi-square was used for the analysis; the p-value of 0.00 which is less than 0.05 level of significance we concluded that there is a significant effect of EFCC participation in the alleviation of money laundering on the economic development of Nigeria.

Major recommendations were made on the level of crises in Nigeria since it was discovered that most of the terrorist attacks on Nigeria were masterminded by money looters in Nigeria.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

Money laundering in Nigeria has become something else in recent times; there has been an endless war against corruption and money laundering. Money laundering is usually found mostly in the federal government parastatals. A fight against money laundering has always been a lost battle but the EFCC is doing its best to bring it to a minimum if not resolve it.

Money laundering is an act of taking money that is not duly assigned to you. The money might be for the budget. There was a memo as of November 20, 2014, submitted by the Chief of Air Staff, A.N. Amosu, that revealed that Mr. Eze had on November 4, 2014, submitted a proposal to the office of the National Security Adviser proposing to supply the upgraded helicopters to the NAF. The tone of Mr. Eze’s letter, obtained by us, indicated that he was deeply involved in sourcing and supplying hardware to the Nigerian military as it is embroiled in a fight against Boko Haram militants. For instance, on August 18, 2014, alone, the sum of N26.68m in eight transactions; N178.54m in 43 transactions on August 19, 2014; N17.38m on September 3, 2014; N90.53m on November 11, 2014; N30.70m on November 11, 2014; N13.54m on November 26, 2014; N67m on December 5, 2014; and N10.80m on December 16, 2014, what are all these money for? There is money laundering all over Nigeria in recent times.

In the year 2013, the governor of Benue state Dr. Susuam was interrogated by the EFCC concerning some amount of money he is taking out of the country; the question was asked concerning the money, the governor told the EFCC of Nigeria that he was going to get foreign pigs for agriculture in Benue state up till today there is nothing of such like agriculture in Benue State.

In July 2015, it was reported by the Sahara Reporters that an investigative report revealed connections between Mrs. Alison-Madueke, Nigerian Petroleum Development Company (NPDC), and Atlantic Energy. This website reported, “on July 19, 2010, Atlantic Energy Drilling Concept Limited (AEDCNL) was incorporated as a portfolio company,” adding that this was barely three months after Mrs. Alison-Madueke assumed office as the Minister of Petroleum Resources. The report continued: “Atlantic Energy, even without prior record of successful experience in the oil and gas sector, announced that it had entered into a Strategic Alliance Agreement (SAA) with the Nigerian Petroleum Development Company (NPDC) in April 2011. That was exactly six months before AEDCNL was legally born.”

One oil industry expert told Sahara Reporters that there was widespread shock when Mrs. Alison-Madueke awarded an unknown company like Atlantic Energy a strategic agreement with the NPDC “without following any process as stipulated in the government procurement laws and policy.” They stated that oil industry operators knew that the deal between Atlantic Energy and the NPDC “was an unholy arrangement” between the former minister, top NPDC officials, Kola Aluko and Jide Omokore. He identified Mr. Omokore as a “controversial business mogul” and political financier.

In the 2016 regime, the president of Nigeria Muhammadu Buhari has once again shown commitment to fighting corruption in all sectors of Nigeria; he sent the “Money laundering (Prevention and Prohibition) bill, 2016” to the National Assembly.

The bill, among others, was all in demand for the establishment of a Bureau for Money Laundering Control (BMLC) to tackle money laundering-related cases in the country.

When established, the BMLC would ensure that all designated businesses and professions comply with the provisions of the money laundering act and exercise supervision.

The bill also seeks to grant full autonomy to the BMLC in the discharge of its functions and responsibilities, if established.

The bureau would be run through an advisory board to be headed by a chairman, who will be appointed by the president on the advice of the minister of Justice and Attorney-General of the federation, Daily Trust reports.

Defining money laundering, the bill says; “a person who knows, ought reasonably to have known or suspects that property has a criminal origin, commits an offense if he conceals, disguises, converts, transfers or removes the property from Nigeria”.

“To conceal or disguise criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights concerning it”, it stated.

It added that a person commits an offense if he enters into or becomes concerned in an arrangement which he knows, ought reasonably to have known, or suspects, facilitates by whatever means, the acquisition, retention, use, or control of property that has a criminal origin by or on behalf of another person.

The bill further prescribed a stiff penalty for anybody found culpable of money laundering and upon conviction, the person shall be liable imprisonment for a term of not less than seven years without the option of a fine.

Also, under the new law, any bank that is found guilty of a money laundering offense would be liable to a fine of not less than N25m and a designated non-financial business and profession would get a fine of not less than N10m, if found guilty of a similar offense.

It also prescribed three years imprisonment or above for anybody that fails to report persons involved in money laundering.

It was learned that the bill would be considered when the lawmakers resume plenary on Feb. 16. All these are aimed at reducing the rate of corruption and money laundering in Nigeria.

According to Steel (2006), money laundering is said to be what it is because it shows how “illegal” and “dirty” monies are put through a cycle of transactions and washed, so it could come out as clean/legal money. This means that the source of this fund (illegal money) is obscured through succession transfers and deals that those same funds can eventually be made to appear as good money. In the Dictionary of Finance and Banking (2008), this term “money laundering” was referred to as a process where money is acquired illegally either through theft, drug dealing, etc, is cleaned so that it will appear to have come from a legitimate source. The origin of this “devil” (money laundering) could not be ascertained by anyone, but there are several opinions that it started several thousand years ago with Chinese merchants. In the words of silkscreen (1994) and Steel (2006), they claimed that it all started from Mafia Ownership of Laundromats, in the United States where they needed to prove the genuine source for their monies, as they earned their cash from extortion, prostitution, gambling, and bootleg liquor. Also according to silkscreen (1994), the development of money laundering was for trade, and Nigeria as a country is the center of money laundering in Africa. Nigeria’s historical record of exploitation goes as far back as when her people were used as slaves under the British colony and as an independent and sovereign country experiencing a transition from a military dictatorship to a democratic form of government after over 16years of military rule. Now, with the democratic form of government, money laundering is still on the increase. With this rate of scans in Nigeria’s financial sector, the law enforcement decided to come up with a legislative act called the money laundering (prohibition) Act 2004, this was followed by the Central Bank of Nigeria (CBN) Anti-money laundering compliance manual guidelines from Economic and Financial Crimes Commission (EFCC, 2003), Independent Corrupt Practices Commission ICPC, 2000). All agencies were changed with the responsibility of fighting against money laundering and enforcement of all laws dealing with economic and financial crimes in Nigeria.

1.2 STATEMENT OF PROBLEM

EFCC has been trying to bring down money laundering in Nigeria but it is difficult to fight against the parastatal that created the EFCC, the issue of money laundering is on the increase in Nigeria. ranging, money laundering through drugs, cheating, and stealing. Every administration that is coming in always promises to fight corruption but at the end of the day, they became corrupt or they make it worse. People have been crying; who could make it right. The federal government of Nigeria and the EFCC are fighting to bring down corruption in Nigeria.

1.3 RESEARCH QUESTIONS

1. Will the EFCC’s participation in other activities makes them effective in preventing money laundering?

2. What are the roles of the federal government of Nigeria in fighting corruption?

3. Does corruption have any significant effect on the growth and development of Nigeria?

4. What are the importance of money of laundering?

5. What are the best ways of stopping money laundering?

6. Does money laundering have a significant effect on future leaders?

1.4 RESEARCH HYPOTHESIS

H0: There is no significant effect of EFCC participation in the alleviation of money laundering on the economic development of Nigeria.

H1: There is a significant effect of EFCC participation in the alleviation of money laundering on the economic development of Nigeria.

1.5 AIMS AND OBJECTIVES OF STUDY

The research work aims to determine the following:

1. The effectiveness of the EFCC in the alleviation of money laundering in Nigeria.

2. The roles of the federal government of Nigeria in fighting corruption.

3. The effect of money laundering on the economic growth and development of Nigeria.

4. The disadvantages of money of laundering.

5. The best way of stoping money laundering in Nigeria.

6. The effect of money laundering on the performance of the future leaders of Nigeria.

1.6 SIGNIFICANCE OF STUDY

The research work is a very interesting one as it reveals the significant effect of EFCC participation in the alleviation of money laundering on the economic development of Nigeria. the study also shows the best possible ways to prevent corruption in Nigeria. The study discussed the role of the federal government of Nigeria in fighting corruption and money laundering in Nigeria stating the significant effect of money laundering on the economic development of Nigeria. the study also explained the concepts of money laundering and the history of money laundering in Nigeria. it also shows the journey so far on the alleviation of corruption and money laundering in Nigeria.

1.7 SCOPE OF STUDY

The study is limited to the history of money laundering in Nigeria, the effect of money laundering on the economic development of Nigeria. the study discussed the areas of the high rate of money laundering in Nigeria. the study covers the role of EFCC in the development of Nigeria. the research work made use of research questionnaires to gather the responses of the respondents on the role of EFCC on the alleviation of money laundering in Nigeria and a method of chi-square was used for the analysis.

1.8 LIMITATION OF STUDY

FINANCIAL CONSTRAINTS:

The researcher was not with sufficient funds to travel to various agencies that are responsible for the alleviation of money laundering in Nigeria. but was able to get good information from the responses for the research work.

CONSTRAINTS:

Due to limited time, the research could not do more research concerning the topic to be able to meet up with time given to him or her to present the research work. But he or she was able to get meaningful information within the short time for the research work.

1.9 DEFINITION OF TERMS

MONEY LAUNDERING: This is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.

EFCC: The Economic and Financial Crimes Commission (EFCC) is a Nigerian law enforcement agency that investigates financial crimes such as advance fee fraud (419 fraud) and money laundering.

REFERENCES

1. Advance Fee Fraud and Other Fraud Related Offences Decree No.13 of 1995 Act Cap. A 6 L.F.N. 2004 repealed by Advance Fee Fraud and Other Fraud Related Offences Act 2006.

2. Becker Kristina. F. (2004), Fact-Finding Study: The Informal Economy. Accessed at. International Journal of Academic Research in Accounting, Finance and Management Sciences Vol. 3 (4), pp. 170–184, © 2013 HRMARS 183

3. Brent L.B (2002), “The Negative Effects of Money Laundering on Economic Development” International Economics Group Dewey Ballantine LLP for the Asian Development Bank Regional Technical Assistance Project No.5967 Countering Money Laundering in the Asian and Pacific Region.

4. Celarier, M. (1997), Privatization: A Case Study in Corruption, Journal of International Affairs. Volume 50, No 2.

5. Central Bank of Nigeria (2002) Money Laundering, Its meaning, Process, and Impact. Banking Supervision Department, Lagos.

6. Dictionary of finance and banking (2008), Oxford University Press, UK.

7. Dunia Amos (2011), Senate passes money laundering bill. The Sun (Nigeria) online news magazine.

8. Economic and Financial Crimes Commission (Establishment) Act, No. 5 2002.Act Cap. E1 L.F.N. 2004 repealed by Economic and Financial Crimes Commission (Establishment) Act, No. 1 2004. 9. Efeyunmi Peter-Mario (2013),