US RAISES QUESTIONS ABOUT THE CAPACITY OF EFCC AND DSS TO INVESTIGATE FRAUD

The U.S. government also expressed worry about the SSS’ refusal to share intelligence with sister agencies to investigate financial improprieties.

“There are concerns about the Department of State Services’ capacity to investigate money laundering and that it does not share case information with other agencies that also conduct financial investigations,” the report states.

The assessment is contained in March 2017 edition of the International Narcotics Control Strategy Report (INCSR) authored by the US Department of State’s Bureau for International Narcotic and Law Enforcement Affairs.

The report, which highlights major steps taken by countries and jurisdictions considered major hubs for money launder have taken to improve their anti-money laundering (AML) regimes, also flays Nigeria’s Economic and Financial Crimes Commission for its over-reliance on investigation by confession and its failure to conduct investigations with the involvement of prosecutors.

It stated that the EFCC’s reliance on formal mutual legal assistance with the U.S. to collect admissible evidence in money laundering cases is a major challenge in its effort to curb financial crimes.

It however praised the EFCC for its “aggressive” probe of high-profile corruption but said that the conviction rate was regrettable.

“However, the EFCC’s conviction rates continue to be low due in part to gaps in the judicial system that cause cases to languish in the system for long periods of time without resolution,” the report said.

While praising Nigerian banks for their willingness to submit currency transactions reports, it observed that the high volume of the reports and the cash-based nature of the country’s economy makes it difficult to detect suspicious transactions.

The report, which describes Nigeria as “a major drug transshipment point and a significant center for financial crime”, slams Nigerian financial institutions for engaging in “currency transactions related to international narcotics trafficking that include significant amounts of US currency.”

The INCSR observed that criminal organisations, corrupt officials, businessmen, terrorist group and internet fraudsters take advantage of Nigeria’s weak law, poor enforcement, geographical location, porous borders and socioeconomic conditions to launder proceeds of crime.

“Criminal proceeds laundered in Nigeria derive partly from foreign drug trafficking and criminal activity including illegal oil bunkering, bribery and embezzlement, contraband smuggling, theft, and financial crimes. Public corruption is also a significant source of laundered criminal proceeds.

“International advance fee fraud, also known as “419 fraud” in reference to the fraud section in Nigeria’s criminal code, remains a lucrative financial crime,” it states.

It observes that Nigeria made limited progress in passing its anti-money laundering legislation. It particularly frowned at the failure of the government to sign the Nigerian Financial Intelligence Centre (NFIC) Bill, which would granted autonomy to the NFIU, and the Proceeds of Crime (POC) Bill passed by the National Assembly in 2014 and 2015, respectively.

“There has also been little movement on a draft mutual legal assistance bill, pending in the National Assembly since 2015,” the report says.

It, however, lavishes the government with praise over the implementation of the Treasury Single Account (TSA), saying it improves transparency and streamlines revenue collection and expenditure.

“In 2016 President Buhari implemented several transparency measures, such as requiring all government entities, including the Nigerian National Petroleum Corporation, to remit nearly all revenues to a Treasury Single Account (TSA). The recent implementation and enforcement of the TSA as well as the Government Integrated Financial Management Information System are intended to make Government government revenue collection and expenditures more streamlined and transparent.”

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