A MEMORANDA AND POSITION OF CISLAC/TI NIGERIA AND BUDGIT SUBMITTED TO THE AD-HOC COMMITTEE ON “THE ASSESSMENT AND STATUS OF ALL RECOVERED LOOTS, MOVABLE ASSETS FROM 2002-2020 BY AGENCIES OF THE FEDERAL GOVERNMENT OF NIGERIA FOR EFFECTIVE/EFFICIENT MANAGEMENT AND UTILIZATION” ON THE 23RD OF JULY 2020.
The Civil Society Legislative Advocacy Centre (CISLAC), the National Chapter of Transparency International, is a non- governmental, non-profit legislative advocacy, information sharing, capacity building and research organization with focus on institutional integrity, accountability and transparency.
BudgIT is a Nigerian civic organisation that applies technology for citizen engagement with institutional improvement to facilitate societal change. BudgIT uses an array of tech tools to simplify the budget and matters of public spending for citizens, with the primary aim of raising the standard of transparency and accountability in government.
Mr. Chairman, over the years, corruption has been, and remains, an unrelenting phenomenon in Nigeria. It is not uncommon for public officials to siphon money meant for public use for personal gains. As a result, and based on best available data, almost 30% of Nigeria’s GDP might be lost to corruption annually. In addition, around USD 17 billion is lost abroad every year to tax evasion, laundering of money and other stashing of illegal proceeds out of Nigeria.
We commend Nigerian authorities and other stakeholders in advocating internationally for speedy return of recovered assets to the countries of origin. I, along with other partners, took part in numerous negotiations in New York, Washington, Brussels and London, to name a few international centres where we advocated unconditional return of our stolen assets. However, this has to correspond with domestic frameworks to convince our partners that we are sincere in preventing re-looting of looted assets.
Domestic and Foreign Returns
Major foreign returns in recent years include: $311 million Sani Abacha loot from Isle of Jersey though USA returned in 2020; $322 million of Abacha loot from Switzerland returned in 2018; $233 million Abacha loot from Lichtenstein returned in 2013-2014; $227 million between 2011–2015 and $2 billion between 1999-2007. Foreign assets recovered by the Nigerian government do not compare to the amount looted and recovered assets make up a very small percentage of illicit financial outflows from Nigeria. Domestically seized and confiscated assets, which include seized buildings, vehicles and others, have proven to be of substantial value in the past and are almost certainly substantially surpassing the internationally recovered assets.
It is however, difficult to ascertain the level of success in Nigeria’s asset recovery due to lack of transparency. No public audit has been done in respect of recovered funds; there is no central register or database for all recovered assets; Nigeria lacks a proper legislative framework for monitoring, managing and utilizing recovered assets from proceeds of crime.
Lack of Coordination on Asset Recovery
CISLAC/TI Nigeria and BudgIT express disappointment over the current existing process where different institutions like the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practice and Other Related Offences Commission (ICPC), Code of Conduct Bureau, Nigeria Custom Service, National Drug Law Enforcement Agency (NDLEA), the Nigerian Police and other agencies recover assets without any synergy.
This lack of transparency in respect of recovered assets in Nigeria creates room for re-looting and mismanagement. The importance of a legislative and institutional framework for the coordination of asset recovery and the management of recovered assets cannot be overemphasized. The failure to enact the Proceeds of Crime Act (POCA), which would serve as a crucial legislative framework for management of recovered assets, creates further complications. The unclear or non-existent oversight in domestically recovered assets especially is a clear setback for our anti-corruption effort.
This memo examines the current process and challenges of asset recovery in Nigeria. It looks at the current legislative and institutional framework on the subject and makes an argument for the passing into law of the Proceeds of Crime Act and the Proceeds of Crime Management Agency (POCMA) Bill. If passed, these laws would not only tackle current challenges of re-looting and mismanagement of repatriated funds, but would also ensure transparency and accountability in respect of recovered assets.
The major recommendation which this policy brief advocates for is the passing of POCA and POCMA Bills. This paper also recommends the establishment of a database for all recovered assets that would be accessible to the general public.
Global Forum for Asset Recovery Principles and Civil Society Principles for Accountable Asset Return
It is pertinent that the effort to pursue asset recovery transparency is guided by the Global Forum for Asset Recovery (GFAR) principles agreed and signed by the Government of Nigeria in Washington, D.C. in December, 2017. Furthermore, civil societies in Nigeria, together with our partners, have been tireless in advocating for speedy return of Nigerian assets from abroad under clear conditions. We have been working with our partners to promote principles of i) Transparency and participation, ii) Integrity, iii) Accountability and iv) Victim restitution and other beneficiaries.
In the Nigerian context, the principle of preclusion of benefit to offenders, which prevents those who looted the assets to benefit from the recoveries of assets, is paramount.
Looting of public assets by corrupt politicians is an unfortunate, but not uncommon occurrence in Nigeria. Nigeria is politically active in her efforts to recover looted funds. In regards to asset recovery, the Nigerian government made specific commitments during the anti-corruption summit in London in 2016. They include:
- Strengthening of the asset recovery legislation through the passing of the Proceeds of Crime Bill to provide for transparent management of returned assets and non-conviction based approach to asset recovery.
- Developing internationally endorsed guidelines for the transparent and accountable management of returned stolen assets.
These commitments were applauded by the domestic and international community as powerful tools to combat corruption and ensure transparent management of returned assets. However, the current reality is that the management of recovered assets in Nigeria is anything but transparent. Information available to the public on recovered assets is patchy at best and the lack of accountability makes recovered assets prone to re-looting and improper management.
Presently, the Economic and Financial Crimes Commission (EFCC) is the foremost institution that deals with recovery of assets in Nigeria. The EFCC disclosed that between January and December 2019, it made monetary recoveries on behalf of both the federal government and third parties in the following sums: N64,721,161,510.01 (Sixty Four Billion, Seven Hundred and Twenty One Million, One Hundred and Sixty One Thousand, Five Hundred and Ten Naira, One Kobo), $14,030,512.32 (Fourteen Million, Thirty Thousand, Five Hundred and Twelve Dollars, Thirty Two Cents), £4,644,493.00 (Four Million, Six Hundred and Forty Four Thousand, Four Hundred and Ninety Three Pounds), €53,325.00 (Fifty Three Thousand, Three Hundred and Twenty Five Euros).
While these figures are released to the public as ‘recovered sums,’ details about how the funds are managed are not released. Whatever happens to the recovered assets is largely unknown to the public. Therefore, it is important for a proper legal framework to be put in place.
This memo holds its argument on the fact that there is currently no proper legal framework to ensure accountability and transparency in respect of recovered assets. This lack of legislative framework has led to the problems stated above. Nonetheless, this section of this paper examines the current legislative framework on asset recovery, points out the gaps thereof and places emphasis on the need for the enactment of the POCA and POCMA bills in order to fill such gaps.
The Asset Tracing, Recovery and Management Regulation, issued in 2019 is the most recent regulation on the subject. The Attorney General and Minister of Justice, Abubakar Malami SAN, stated that the Asset Tracing, Recovery and Management Regulation was issued to tackle the lack of coordination and proper management of seized, forfeited or confiscated assets as well as to ensure transparency in the process of disposal of forfeited assets. The 2019 regulation gives oversight powers to the Attorney-General over non-conviction based forfeiture. The regulation also retains all the powers of law enforcement and anti-corruption agencies in their extant laws as it relates to asset recovery. In addition, the 2019 regulation recognized the need for details of all seized and forfeited assets to be provided by anti-corruption agencies.
Though the 2019 regulation recognizes the lapses in the legislative framework in respect of asset recovery, it is still not enough to fill the gaps. Challenges faced before its issuance are still being faced today. This emphasizes the need for the enactment of an Act such as the Proceeds of Crime Act to properly deal with the issue.
Other laws which can be relied upon in recovery of assets include the EFCC Act 2004, ICPC Act 2000, the Money Laundering (Prohibition) Act 2011, the Nigerian Financial Intelligence Agency Act 2018, and the Mutual Assistance in Criminal Matters Act 2019. Policies which are being applied include Whistleblowing policy, Voluntary Offshore Assets Regularization Scheme (VOARS), Treasury Single Account (TSA), Voluntary Assets and Income Declaration Scheme (VAIDS). None of these legislations and policies have been successful in achieving transparency, accountability and proper management of recovered assets.
It is important to note that the PoC bill was not assented to by Mr. President despite all the work put in by the 8th Assembly. However, the 9th Assembly have picked up the POCMA bill, a bill which is sponsored by Hon. Benson Babajimi Adegoke and yet to get the committee’s report at the House of Representatives, while the Senate received the Proceeds of Crime Bill that was transmitted from the House of Representatives which is at first reading.
The executive and judiciary have prioritized non-conviction approaches to asset recovery. Despite having extensive training on the use of non-conviction based approaches to assets confiscation, judges still complain about the persistent lack of training and gaps in existing legal frameworks.
Existing legal framework on asset recovery management is clearly insufficient to resolve the issue of lack of transparency and accountability. What is needed at this point is a law that would serve as a comprehensive legal framework for the management and utilization of recovered assets as well as the provision for consistent information on the subject to be made available to the public.
- Enacting the proceeds of crime management act
CISLAC/TI Nigeria and BudgIT call for the enactment of the Proceeds of Crime legislation. The delay in passing this legislation which the Nigerian government committed to in 2016 greatly undermines asset recovery in Nigeria.
- Establishment of a proceeds of crime management agency
This paper recommends the enactment of the Proceeds of Crime Management Agency Bill. This mandate of the agency would be the management of domestically, and whenever possible, internationally recovered assets. The mandate of other agencies to recover assets must be reviewed to avoid duplication.
- Establishment of a central database for all recovered assets
In order to ensure transparency and accountability, this paper suggests the establishment of a database that would contain details of recovered assets including details of persons from whom they were recovered and how the recovered assets are utilized. This database should be publicly accessible, and containing all interim and final forfeitures of different types of movable and immovable assets seized by different agencies.
- Inclusion of Civil Society in recovered asset return and management
It is important that independent civil society organisations, including victims’ groups/representatives, be able and enabled to participate in the asset recovery process. This includes: identifying the mechanisms and processes that allow for initial harm to occur; identifying how the harm can be remedied, including providing information on how the harm was committed, as well as proposals to prevent recurrence and a timeline for achieving this; contributing to decisions on the return and disposition of assets, including social programmes dedicated to victims of corruption and identifying needs; fostering transparency, accountability and due diligence in the transfer, administration, disposition, monitoring and reporting of recovered assets; and, as far as permitted by confidentiality rules, fostering transparency and accountability in the investigation.
Mr. Chairman, there is a need for an asset recovery framework that will help in not just the management or utilization, but the evaluation and monitoring of these assets to prevent corruption.
There has to be a clear mandate for institutions recovering and managing stolen assets. CSOs and the media should also be allowed to verify the authenticity of the data. If we have full transparency as regards recovered assets, nobody can accuse anybody of mismanagement or re-looting of looted assets. Above all, there has to be very little or no room in our new legal and policy framework for political interference in the domestic and international asset recovery cases.
The Civil Society Legislative Advocacy Centre (CISLAC)/Transparency (TI) International Nigeria