Jun.04, 2010, 17:02

Following the judgment in a London court on Tuesday, in which Christine Ibie-Ibori, the sister of former Delta State Governor, James Ibori, was found guilty of all charges of money laundering and mortgage fraud, ADEBAYO KAREEM, A senior prosecutor with the UK Crown Prosecution Service, examines the defects in Nigeria’s Money Laundering Act in this article.

In the 1980’s when many of the world’s laws on money laundering were enacted, money laundering was then synonymous with drug trafficking as a result of which the wordings of the laws were generally couched in the languages that reflected drug trafficking as the main demons that needed to be tamed. However as the world has become truly a global village in terms of the seamlessness in which huge financial transactions could be conducted electronically from one part of the globe to another, the international community has equally come to realise the collateral side effects of this new age of borderless commerce: the ease with which proceeds of crimes could easily be sanitised by criminal elements taking advantage of the advances in information and communication technology.

The world has now taken note of the fact that drug trafficking has become just a part of the global money laundering menace and in the last decade many responsive governments have made efforts to redress this frontally by promulgating new laws or amending/updating existing ones with a view to tackling and combating the new multifarious dimensions this old problem has mutated into. These new laws now contain comprehensive proceeds of crimes provisions with drug trafficking as just a sub-set of the laws.

For example in England there is the Proceeds of Crimes Act {POCA} 2002; in the USA there is the Patriot Act 2001 and nearer home in South Africa, there is the Prevention of Organised Crimes Act {POCA} 1998. All these Acts extend the purviews of the existing laws and make comprehensive provisions for combating the menace of organised crimes by amongst others, creating agencies with enormous powers to tackle organised crimes and seize unlawfully acquired properties. The relevant Act in Nigeria is the Money Laundering {Prohibition} Act 2004, {MLPA 2004}. Unfortunately this Act is ill-equipped to tackle the menace of proceeds of crimes in Nigeria and there is an urgent need to rectify this. The recent money laundering cases against the former governor of Delta state, James Onanefe Ibori and his associates, one in Nigeria and the other in the United Kingdom sharply brought into the fore the relative ineffectiveness of the Nigerian Act.

James Ibori, together with Udoamaka Okoronkwo, Chiedu Ebie, Mer Engineering Limited, Bainenox Nigeria Limited and Sagicon Nigeria Limited were, on the 12 March 2008, arraigned before the Federal High Court, Asaba Division of Delta state Nigeria with 170-count charges of money laundering under section 14{1} of the MLPA 2004 {the matters were commenced at the Kaduna division of the court before being transferred to Asaba}. The allegations generally relate to unlawful transfer of monies belonging to the Delta state government into private accounts of James Ibori and his associates and companies. On the 28 July 2009, the defence counsel, via a Motion on Notice urged the court to strike out all the charges against the defendants as the case for the Prosecution, even taken at its highest, did not disclose a prima facie case against the defendants. The presiding judge, Mr Justice Marcel Awokulehin, after careful consideration of all the evidence against the defendants, agreed with the accused and the charges against the defendants were discharged.

Meanwhile in the UK James Ibori’s associates and family members, namely C. Ebie, Adebimpe Pogoson, Udoamaka Okoronkwo, Theresa Ibori, and Bhadresh Gohil all face several charges bordering on money laundering and proceeds of crimes at the Southwark Crown Court in London. James Ibori himself could not be charged as he was not in the UK at the commencement of the trial of his associates. The UK charges to a large extent mirror the charges in Nigeria with Ibori being accused of using his incumbency as the governor of Delta state between 1999 and 2007 to amass astonishing wealth.

It is perhaps pertinent to outline the specific charges under which Ibori and his associates were charged both in Nigeria and the UK. In Nigeria, Ibori and his associates were charged mainly under 14 -17 of the MLPA 2004 which provide that:

(1) Any person who-- (a) converts or transfers resources or property derived directly or indirectly from illicit traffic in narcotic drugs or psychotropic substances or any illegal act,. with the aim of either concealing or disguising the illicit origin of the resources or property, or aiding any person involved in the illicit traffic in narcotic drugs: psychotropic substances or any other crime or illegal act to evade the legal consequences of his action; or Liability of directors, etc. of financial institution. Surveillance of bank;

(b)collaborates in concealing or disquising the genuine nature, origin, location, disposition, movement or ownership of the resources, property or rights thereto derived directly or indirectly from illicit traffic in narcotic drugs or psychotropic substances or any other crime or illegal act, Commits an offence under this section and is liable on conviction/to imprisonment for a term of not less than 2 years or more than 3 years.

(2) A person who commits an offence under subsection (1) of this section shall be subject to the penalty specified in that subsection notwithstanding that the various acts constituting the offence were committed in different countries or places. 15. (1) Without prejudice to the penalties provided for illicit traffic in narcotic drugs or psychotropic substances, the laundering of drug money or the proceeds of a crime or illegal act, any person who- (a) being a director or employee of a financial institution warns or in any other way intimates the owner of the funds involved in the transaction referred to in section 10 of this Act about the report he is required to make or the action taken on it or who refrains from making the report as required under that section; or

(b) destroys or removes a register or record required to be kept under this act; or (c) carries out or attempt under a false identity to carry out any of the transactions specified in sections 1 to 5 of this Act; or (d) make or accepts cash payments exceeding the amount authorized under to be reported under this Act; or (e) fails to report an international transfer of funds or securities required to be reported under this Act; or

(f) being a director or an employee of a bureau de change, casino or other financial institution, contravenes the provisions of section 2, 3, 4, 5 or 10 of this Act; or commits an offence under this section. (2) A person who commits an offence under subsection (1) of this section is liable on conviction- (a) in the case of an offence under paragraphs (a) to (c) of subsection (1) to imprisonment for a term of not less than 2 years or more than 3 y;

(b) in the case of an offence under paragraphs (d) to (f), where the offender- (i) is an individual to a fine of not less than N250,000 or more than 1 million Naira or term of imprisonment of not less than 2 years or more than 3 years or to both fine and imprisonment; or (ii) is a financial institution or any other body corporate to a fine of not less than N250,000 or more than N1,000,000.00 (1 million Naira)

(3) A person found guilty of an offence under this section may also be banned indefinitely or for a period of 5 years from exercising the profession, which provided the opportunity for the offence to be committed...’ 16. Any person who-

(a) whether by concealment, removal from jurisdiction, transfer to nominees or otherwise retains the proceeds of crime or an illegal act on behalf of another person knowing or suspecting other person to be engaged in a criminal conduct, or has benefited from a criminal conduct; or (b) knowing that any property either in whole or in part directly or indirectly represents another person’s proceeds of a criminal conduct, acquires or uses that property or has possession of it, commits an offence under this Act and is liable on conviction to imprisonment from a term of not less than 5 years or to a fine equivalent to 5 times the value of the proceeds of the criminal conducts or to both such imprisonment and fine.

17. A person who- (a) conspires with, aids, or abets counsels any other person to commit an offence; or (b) attempts to commit or is an accessory to an actor offence, or (c) incites, procures or induces any other person by any mean whatsoever to commit an offence, under this Act, commits an offence and is liable on conviction to the same punishment as is prescribed for that offence under this Act. ‘ {The underlined words for emphasis is mine}

In the UK a number of charges are brought against the defendants under the Criminal Attempts Act of 1977, whilst the relevant money laundering charges were brought under sections 327, 328 and 329 of the Proceeds of Crime Act 2002. Sections 327, 328 and 239 are reproduced below: ‘Concealing etc (1) A person commits an offence if he— (a) conceals criminal property;

(b) disguises criminal property; (c) converts criminal property; (d) transfers criminal property; (e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.

(2) But a person does not commit such an offence if— (a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent; (b) he intended to make such a disclosure but had a reasonable excuse for not doing so; (c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct. (3) Concealing or disguising criminal property includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it.

328 Arrangements (1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person. (2) But a person does not commit such an offence if— (a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;

(b) he intended to make such a disclosure but had a reasonable excuse for not doing so; (c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.

329 Acquisition, use and possession (1) A person commits an offence if he— (a) acquires criminal property; (b) uses criminal property; (c) has possession of criminal property.

(2) But a person does not commit such an offence if— (a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent; (b) he intended to make such a disclosure but had a reasonable excuse for not doing so; (c) he acquired or used or had possession of the property for adequate consideration; (d) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.

(3) For the purposes of this section— (a) a person acquires property for inadequate consideration if the value of the consideration is significantly less than the value of the property; (b) a person uses or has possession of property for inadequate consideration if the value of the consideration is significantly less than the value of the use or possession; (c) the provision by a person of goods or services which he knows or suspects may help another to carry out criminal conduct is not consideration.’

It is crucial to note that in the Interpretation section of the Act, under section 340{3}, “criminal property” is defined as ‘property which constitutes a person’s benefit from HYPERLINK “http://www.wikicrimeline.co.uk/index.php?title=Criminal_conduct” \o “Criminal conduct” criminal conduct or which, directly or indirectly, in whole or in part, represents such a benefit, and the alleged offender knows or suspects that it does so.’ And under section 340{4} ‘it is immaterial {a} who carried out the conduct; {b} who benefited from it; and {c} whether the conduct occurred before or after the passing of this Act’ The Act proceeds to assert that: (9) Property is all property wherever situated and includes— (a) money; (b) all forms of property, real or personal, heritable or moveable;

(c) things in action and other intangible or incorporeal property (10) The following rules apply in relation to property— (a) property is obtained by a person if he obtains an interest in it; (b) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power;

(c) references to an interest, in relation to land in Scotland, are to any estate, interest, servitude or other heritable right in or over land, including a heritable security; (d) references to an interest, in relation to property other than land, include references to a right (including a right to possession).’ Criminal conduct is defined under section 340{2} (2) as ‘conduct which constitutes an offence in any part of the United Kingdom or would constitute an offence in any part of the United Kingdom if it occurred there’

The language of the MLPA 2004 and the Ejusdem Generis Rule It is submitted that there are broadly speaking, two main shortcomings with the MLPA 2004. The first is the very limited scope of the Act. It will be submitted later in this article that the country needs a very comprehensive Act capable of tackling the multi dimensional issues that necessarily arise in proceeds of crimes cases. The second main, and perhaps fatal shortcoming of the Act in so far as the trial in Asaba is concerned is the very restrictive language of the Act which by necessary implication meant that the Act’s purview will be limited to crimes arising from drug dealings and related offences.

This is unhelpfully restrictive. At the Asaba hearing, it was argued successfully by the defence advocate that given the provisions of section 14{1}{a} and {b} of the MLPA 2004 the ‘any other crime or illegal act’ referred to in the section {underlined above} must, per the Ejusdem Generis rule of Statutory interpretation, refer to monies or any pecuniary benefits derivable from offences traceable to narcotic drugs and psychotropic substance. It was argued that given that the evidence against the defendants did not contain any reference to obtainment of funds or monies accruable from narcotic drugs or psychotropic substance, the charges were out of the scope of the Act.

The court agreed with the defence argument. The Ejusdem Generis rule of statutory interpretation simply asserts that where specialist or restrictive terms or words are followed in a statute by more general terms or words, if the listed terms or words are sufficiently restrictive as to constitute a class or genus, in interpreting the general words that follow them, the court will presume that they are intended to apply to things of the same class as the restrictive terms listed. For example if an insurance contract contains an exclusion clause to the effect that liability will be excluded by damage caused by ‘acts of god, flood, earthquake or otherwise’, the word ‘otherwise’ will be restricted to damage of the same genus as the preceding words. Thus if a damage was caused by arson for example the company will not be able allowed to exclude liability.

In the Asaba trial, given the nature of the evidence before the court which did not contain any indication of the defendants’ involvement in narcotic drugs or psychotropic substance, it was not difficult for the court to come to the decision it did. As His Honour, Justice Awokulehin held: ‘It is my view that if Section 14{1} was all encompassing as learned senior counsel for the respondent has argued, the special words relating to narcotic drugs and psychotropic substances would not have been mentioned before the words ‘any other crime or illegal act’. Perhaps the drafters of the Act would have criminalized all movement of money derived from ‘crime or illegal acts’ in the said section’’ {Emphasis mine}

It is submitted that indeed what the country needs is an Act that will criminalise all movement of money derived from crimes or illegal acts. Indeed that the MPLA 2004 fails to do so is a fatal failing of the Act that needs to be rectified as soon as possible. The need for a comprehensive Nigeria POCA

The question that should concern our lawmakers is why the UK court convicted some of Ibori’s associates whilst the trial in Nigeria failed even before a single witness had been called? The answer to this question is not difficult to fathom: the UK has a more robust, proactive and effective proceeds of crimes laws. Even a cursory comparison of the provisions of the Nigeria’s MPLA 2004 and the UK own POCA 2002 as outlined above clearly shows that the UK law is designed to ensure that the UK criminal investigators, the prosecutors and the courts have sufficiently broad powers to deal with issues arising from prosecution of offenders accused of acquiring criminal properties. Unlike the Nigeria’s MPLA 2004, the UK‘s POCA 2002, is not restrictive, it is comprehensive and have fairly elastic definitions of its key provisions.

There are a number of useful provisions in the UK POCA 2002 which a new and comprehensive Nigeria MLPA can borrow from. Part 1 of the POCA 2002 created the Assets Recovery Agency, {ARA}. As the name implies, this agency was statutorily empowered to commence restraints and confiscation proceedings, especially as it related to civil forfeiture of assets illegally acquired through criminal activities. Although the Serious Crime Act 2007 has now amended part 1 of POCA 2002 and a new agency, the Serious and Organised Crime Agency {SOCA} has been created to take up most of ARA’s functions, there remains in the UK an agency statutorily and specifically put in place to recover illegally acquired assets. In South Africa, the Prevention of Organised Crime Act {POCA} 1998 also contains many comprehensive provisions designed to tackle proceeds of crimes. Chapter 5 of the South Africa’s POCA contains detailed provisions for assets confiscation. It contains procedures for both criminal and civil recovery of unlawfully acquired assets.

Interestingly, as in the UK’s POCA, criminal confiscation proceedings could be commenced subsequent to criminal conviction of an offence that gave rise to criminal benefits whilst no conviction is required of any person before tainted property can stand to be forfeited. To make recovery of ill-gotten wealth easier, the UK Act contains reference to ‘criminal lifestyle’ assumption, the concept of which is based on the assumption that when and where there is reasonable ground to suspect that an offender is living off crime, the reverse burden of proof applies, i.e. the suspect should be saddled with the burden of proving that is properties are not proceeds of crime within the meaning of the Act, otherwise such properties are liable to be forfeited. Under section 75 of UK POCA 2002, if an offender is convicted of certain specified offences, he is deemed to have criminal lifestyle; secondly if an offender is convicted of an offence of any description in the previous six months and he benefitted not less than £5000.00 from that offence, he could be deemed to live a criminal lifestyle and finally if an offender is convicted of a combination of offences amounting to ‘a course of criminal activity’, he could be deemed to have criminal lifestyle. The ‘specified offences’ listed by the UK POCA 2002 includes:

.Drug trafficking; .Money laundering offence; .Directing terrorism; .People trafficking; .Arms trafficking; .Counterfeiting; .Intellectual property; .Pimps and brothels; .Blackmail; an offence of attempting, conspiring, inciting, aiding, abetting, counselling or procuring an offence specified in Schedule 2.’

The essence of the above is that anyone convicted of any of the above offences in the UK is deemed to live a criminal lifestyle with the reverse burden on him to prove otherwise, on a balance of probability basis; otherwise these properties are susceptible to be forfeited. This is clearly invaluable power available to the UK prosecuting authorities and was no doubt helpful to the court when dealing with the Ibori’s associates’ Southwark trial. Clearly if Ibori et al had been charged with identical laws in Nigeria, the outcome of the Asaba trial may well have been different. As it is, other than provisions made in certain individual legislations with regards to forfeiture of properties in individual cases, there is no law specifically enacted in Nigeria to tackle the menace of illegally acquired assets. It is therefore imperative that the National Assembly pass without any undue delay the Forfeiture Bill which is presently before them. The Preamble to the proposed Act speaks for itself: An Act ‘to make provisions for the restraint and civil forfeiture of property derived from unlawful activity and any instrumentalities used or intended to be used in the commission of unlawful and to make provision for the investigation of benefit derived from corruption, money laundering and instrumentalities,”.

In a country where all are agreed that corruption has been the cog in the wheel of national progress, the Forfeiture Bill is an invaluable tool in the hands of the EFCC prosecutors to recover illegally acquired wealth. This writer earnestly hopes that the Forfeiture Bill will become law sooner rather than later.

In general terms any improved/amended MLPA must contain all of the following elements: .the establishment of a specialist agency or a branch of the EFCC to target recovery of the proceeds of crime; .Increase the power of prosecuting agencies to commence criminal confiscation proceedings ;Introduction of a civil recovery regime; Introduction of the concepts of criminal activity, criminal property and criminal lifestyle, amongst others and increasing the powers of financial investigators to have access, in appropriate occasions to financial and bank accounts of accused individuals.

Anything short of the above might indicate to the whole world that the country is not really taking the war against corruption and money laundering seriously. Adebayo Kareem Solicitor-Advocate, London.