Hurdles before illicit funds repatriation

Hurdles before illicit funds repatriation

By Collins Olayinka, Abuja on June 3, 2015


THERE have been arguments that the monies that are looted from African countries are enough to end hunger and put the continent on the path of irreversible development.

While there have been continental and inter-continental agreements reached between developing countries where these monies are looted and developed countries where they are kept, there have been formidable hurdles on the path of recovery.

Most celebrated case of looted funds is that of former military Head of State, the late General Sani Abacha, which has been stuck in high-wired international diplomacy.

The Nigerian civil society organizations led by the Africa Network for Environment and Economic Justice (ANEEJ) and its international civil society allies, said the proposed repatriation of over $480 million of the General Sani Abacha loot from the United States of America to the Nigerian government has so far been shrouded in secrecy in spite of efforts by the network of civil society groups.

The group has continually drawn the attention of concerned parties and stakeholders to alleged anomalies that undermine international instruments and Nigerian laws as the Nigerian parliament and CSOs are completely sidelined in all transactions, undertakings and agreements relating to this arrangement.

Civil society shadow report of the Nigeria Network on Stolen Assets (NNSA) published by ANEEJ on the Public Expenditure Management and Financial Accountability Review (PEMFAR) (2005) on the $500million repatriated from Switzerland, showed that the agreement and use of repatriated loot did not meet standards required by, nor reflect the spirit envisaged by Article 5 of the United Nations Convention Against Corruption (UNCAC), which states that ‘each State Party shall, in accordance with the fundamental principles of its legal system, develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability’.

The Nigeria Public Expenditure Management and Financial Accountability Review (PEMFAR) was initiated by the World Bank to execute reform in the budget spending of the Nigerian Government by analysing the use of the repatriated Abacha loot in implementing the National Economic Empowerment Development Strategy (NEEDS) in support of the realization of the objectives of the Millennium Development Goals’ (MDGs) priorities on education, health, and basic infrastructure (power, roads, and water) for poverty eradication.

The background for the PEMFAR is the February 2005 agreement by the Nigerian and Swiss Governments to repatriate the Abacha family’s bank deposits in Switzerland in the amount of US$458 million.

To secure release of these funds, the Nigerian and Swiss governments, in cooperation with the World Bank, agreed that an analysis of the additional budget expenditures funded in 2004 from the repatriated funds must be undertaken by Nigeria and the Bank to ensure the repatriated funds’ contribution to Nigeria’s poverty reduction strategy in alignment with (MDGs). Civil society participation in the process was also a part of the condition for the repatriation.
The group stated that the process of repatriation and utilization of the repatriated funds fell short of all expectations, even though the Nigerian Government and the World Bank went celebrating what they considered a ‘successful agreement’. The group posited that a civil society shadow report proved that the entire process was flawed and fell far short of international best practices.

Against this backdrop, and to forestall the same pitfall, the civil society coalition seek to put local, national and the international community and interested parties on notice for action against the obnoxious agreement already brokered in July, 2014, between the representatives of Nigeria and the Abacha family and the impending repercussions that that agreement portends for the fight against corruption, the future of Nigeria, and the devastating effect it unleashes on the global effort to rid the international financial system of illicit funds.

The coalition stressed that there were irregularities in the said agreement between the Federal Government of Nigeria and the Abacha Family, saying it breaches globally accepted standards and templates in the fight against corruption as contained in Article 5 of the United Nations Convention Against Corruption, UNCAC.

It added that it also contravenes Civil UNCAC Society Coalition resolutions at the 6th session of the UNCAC Conference of States Parties and of the Implementation Review Group and Working Groups, and grants recipients of stolen monies stashed abroad tacit immunity from giving up the proceeds of their crimes and criminal prosecution in a court of competent jurisdiction.

A statement signed by the Coordinator, Nigeria Network on Stolen Assets (NNSA), David Ugolor said: “Specifically, we find the following areas of the Agreement unacceptable, misleading and generally inimical to the fight against corruption and the interest of the people of the Federal Republic of Nigeria .

“The Parties – Most of the diction, such as ‘resolved matters’, ‘parties’ and all items under Article 2 couched under RESOLUTION OF DISPUTES, as contained in the agreement appear ambiguous and lax, and would appear that great effort was not expended to properly identify parties to be bound by the terms of the Agreement as ‘affiliates’ to the Abachas could be anywhere from 100 – 1000 individuals or corporate entities.”

Ugolor posited that the total effect of the agreement and the liabilities and obligations of parties rest heavily on the term conveniently couched ‘Resolved Matters’ – the definition of which is open ended and leaves a very wide margin for ambiguities to be imputed into the Agreement to the advantage of the settling parties.

He added that it appears that the agreement was deliberately skewed in favour of the settling parties in order to escape criminal liability, now and in future.

The group submitted that in the light of flaws and principally because the parties and framers of the Agreement deliberately operated on a code of secrecy without carrying the Nigerian public along with a view to shortchange and frustrate the people and government of the Federal Republic of Nigeria, it recommends that the incoming administration of General Muhammadu Buhari should repudiate this agreement on the grounds that it is a strong precedence for more corruption; endangers Nigeria’s fledgling democracy; will engender a climate for setting up “harmful role models”; erodes the rights of citizens to hold government accountable and speak truth to it; and gives room for the cultivation of impunity and a possibility for re-looting the loot.

The group added: “The out-going administration should provide a comprehensive independent audit on how other recovered and repatriated Abacha loot were expended, so as to give insight into the management of public finance in Nigeria.

“In line with the avowed anti-corruption stance of the incoming administration, the President-elect should move quickly to set up machinery to fast track the signing into law of the Proceeds of Crime Bill, POCA. We believe that the absence of a domestic framework on how stolen wealth is used creates room for mismanagement of recovered assets.”

Indeed, only recently, the report of the high level panel on Illicit Financial Flows (IFFs) from Africa commissioned by the African Union/Economic Commission for Africa (ECA) said transparency of ownership and control of companies, partnerships, trusts and other legal entities that can hold assets and open bank accounts is critical to the ability to determine where illicit funds are moving and who is moving them.

The report to the continental body also stressed the need for African countries to prioritize availability of information on beneficial ownership when companies are incorporated or trusts registered.

Most worrisome for Nigeria is the fact that the oil and gas sector, which provide the largest financial flow of the country is home to where most of the IFFs take place.

To reduce IFFs in the extractive industriy, which has been demonstrated by the encouraging impacts of the Nigeria Extractive Industry Transparency Initiative (NEITI) in Nigeria, the report called on other African countries and companies operating in sector on the continent to join voluntary initiatives like the Extractive Industries Transparency Initiative. It added that Africa should also push for mandatory country-by- country and project-by-project reporting requirements immediately in the extractive sectors and in the near term across all sectors.

In the same vein, the report urged African states to establish or strengthen the independent institutions and agencies of government responsible for preventing IFFs.

It named financial intelligence units, anti-fraud agencies, customs and border agencies, revenue agencies, anti-corruption agencies and financial crime agencies as bodies that must be strengthened and ensure they render regular reports on their activities and findings to national legislatures.

Apparently pushing for Nigerian government to inaugurate a board for the Bureau of Public Procurement (BPP), which will be in charge of award of contracts, the report indict the practice where the National Executive Council (NEC) award contacts without a recourse to any standard procedure.

It added: “Non-transparent government procurement and supply chains can provide opportunities for corruption-related IFFs. African governments should adopt best practices in open contracting to reduce IFFs through government procurement processes. Global standards in anti-corruption and anti–money laundering require financial institutions to subject accounts held by certain persons to greater scrutiny and monitoring, including senior government officials, leaders of political parties, executives at state-owned enterprises and others with access to large amounts of state assets and the power to direct them (often called politically exposed persons, or PEPs). African governments can greatly help financial institutions in this task by publishing lists of PEPs, as well as any asset declarations filed by PEPs and information about whether the country’s laws prohibit or restrict the ability of their PEPs to hold financial accounts abroad.”