Nigerians may no longer be able to carry out international transactions as Egmont Group is considering expelling the Nigerian Financial Intelligence Unit (NFIU) because of governance issues.
A major consequence of the expulsion will be the blacklisting of Nigeria in international finance.
This could affect use of MasterCard and Visa credit and debit cards by Nigerians.
It could also affect the international rating of Nigerian financial institutions, restricting their access to some big-ticket international transactions.
Nigeria will also no longer be able to benefit from financial intelligence shared by the other member countries, including the US and the UK.
Also to be affected is the country’s ability to recover stolen funds abroad.
TheCable understands that the expulsion is part of the agenda of Egmont’ working group and heads of FIU meeting between March 2 and March 7, in Buenos Aires, Argentina.
The group, comprising 153 countries, mandates its members to establish a financial intelligence unit that serves as a national centre for the receipt and analysis of (1) suspicious transaction reports; and (2) other information relevant to money laundering, associated predicate offences and financing of terrorism, and for the dissemination of the results of that analysis.
All advanced countries are members of the group, which is an initiative of the American government.
In July, 2017, the Egmont Group, a global network of 152 Financial Intelligence Units (FIUs) suspended the Nigerian Financial Intelligence Unit (NFIU) at its 24th plenary of the Heads of the FIUs in Macao.
The group explained that the NFIU was suspended because the Economic and Financial Crimes Commission, EFCC, under which the NFIU was situated, was leaking sensitive information to the media.
The Egmont Group also accused the EFCC of blackmailing individuals with the confidential intelligence at its disposal.
“The Heads of FIU made a decision, by consensus, to suspend the membership status of the NFIU, Nigeria, following repeated failures on the part of the FIU to address concerns regarding the protection of confidential information, specifically related to the status of suspicious transaction report (STR) details and information derived from international exchanges, as well as concerns on the legal basis and clarity of the NFIU’s independence from the Economic and Financial Crimes Commission (EFCC). The measure will remain in force until immediate corrective actions are implemented,” the group said in a statement.
The implication of expelling Nigeria
While the status of committee’s recommendations remains in the dark, Premium Times has learned that a proposal to permanently expel Nigeria from the Egmont Group is on the agenda of the Egmont Working Group and Heads of FIU meeting to be held in Buenos Aires, Argentina between March 2 and 7.
If the group goes ahead with the proposed expulsion, transactions done with credit and debit cards issued in Nigeria could unnecessarily be flagged as suspicious. The liability of foreign transactions will also be shifted to Nigerian card users.
Tunde Ajileye, an employee of digital payment company, Interswitch, explains what a liability switch is:
“We would have liability shift. What that means is that, if there is an issue and they (banks, payment companies) want to adjudicate, normally they adjudicate before they move the money to any party but with a liability shift, what it means is that they will first move money from you to the other party and if they now decide that you are not at fault they will then move the money back to you. The risks becomes higher and the odd is staked against you if there is an issue with your transaction.”
Mr. Ajileye also said another implication of expelling Nigeria from the group will be that Nigerians will be more prone to be suspected of money laundering.
“Money that comes in from Nigeria will become more suspect. Normally if you do a suspicious transaction report to the NFIU and the NFIU shares that report to other international agencies to track but if we are expelled we really can’t share. We also do not have access to information, so we become more prone to money laundering.
“For instance, if someone has been flagged internationally because we don’t have access to that information, we won’t know, and the person(s) can continue to do their transactions unlike today where we can get such information,” he said.
The Egmont Group is said to be uncomfortable that the NFIU still operates under the control of the EFCC, which is accused of being meddlesome.
Last July, the Senate passed the Nigerian Financial Intelligence Agency Bill, which grants autonomy to the NFIU one week after it was presented to the upper legislative chamber.
The bill is, however, yet to be passed by the House of Representatives.
Credit: Premium Times and The Cable.