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Public account withdrawal is money laundering

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By Abraham Adekunle

The NFIU will treat such as money laundering offence from March.

The Nigerian Financial Intelligence Unit (NFIU) has announced on January 5, 2023, that cash withdrawals from public accounts will be treated as money laundering offence from March 2023. The unit also added that payment of estacode and oversea allowances to civil and public servants in cash has been outlawed. The new guidelines on this were released with the aim of mitigating money laundering, terrorist financing, and the proliferation of weapons. This is a drive to complement the efforts of the Central Bank of Nigeria (CBN) in tackling terrorism-related financing and promoting a cashless economy.

Mr. Modibbo Hamman Tukur, the director of NFIU, signed the guidelines entitled “The Enforcement, Guidelines, and Policies for Mitigation of Money Laundering, Terrorist Financing, Proliferation of Weapons and Prevention of Predicate Crimes” and the unit made it available to the press. The agency also announced that the full enforcement and/or implementation of the guideline by all public authorities, institutions and organisations in the financial sector, financial institutions, and designated non-financial institutions will commence on March 1, 2023.

Tukur says CBN’s circular on cash withdrawals in harmony with the law.

The director said that the unit supports the CBN’s circular on cash withdrawal limits, which is in harmony with the law. The law is provided in Section 2 of the Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA, 2022). The agency head added that the new guidelines will support the efforts of the CBN. According to him, the discontinuation of cash withdrawal in naira and foreign denominations from federal, state and local government public accounts are in compliance with its statutory responsibilities under Section 3(1) a-s and Section 23(2) of the NFIU Act 2018 as well as other provisions under the MLPPA 2022.

These guidelines became necessary because of the relevant laws. He also said that the agency noticed for it’s financial transactions analysis that civil servants were more susceptible to money laundering and its predicate offences due to their exposure to cash withdrawals from public accounts. The agency’s analysis shows that the federal government, states and local governments withdrew about N225 billion, N700 billion and N150 billion respectively. These transactions were all in cash.

Results from this analysis contravenes the law.

Tukur said that the cash withdrawals directly contravene the provisions of the MLPPA 2022 and the Proceeds of Crime (Recovery and Management) Act2022, both of which provide the legal framework for the limitations on cash transactions and sanctions for the infringement of the provisions. He reiterated that Section 2 of the MLPPA 2022 restricts cash payment of more than N5 million (or its equivalent) for individuals and N10 million (or its equivalent) for corporate bodies.

According to the MLPPA 2022, the punishment for breaking these laws in Section 19 is a fine of at least N10 million or imprisonment for a term of at least three years (or both) in the case of individuals. For corporate bodies, it is a fine of at least N25 million. Section 26 of Proceeds of Crime Act 2022 also makes provisions for the seizure and detention of cash over the prescribed amount under the law. Tukur revealed that most cash withdrawals from public accounts were in excess of N5 million and N10 million respectively which was prohibited and liable to imprisonment or fines upon conviction.

Inflation is also a factor in these withdrawals.

His statement continued,  “the breach of this particular provision became so rampant because there are heavy withdrawals of cash from public accounts necessitated by inflation and changes in the economy, and also due to payment for overseas travels in terms of estacode and other overseas allowances.” He added that in the meantime, it is not only indicting chief accounting officers of Ministries, Departments and Agencies (MDAs) but, in the context of Nigeria’s democracy, also gives room for adversaries, political opponents and antagonists to exploit the law against their competitors, or to their individual political advantage.


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Ask Nigeria
Admin
1 year ago

Public account withdrawal is money laundering – The NFIU will treat such as money laundering offence from March. – Express your point of view.

Abusi
Abusi
Member
1 year ago

If it is made at checking corruption practices in the public sector, then it is fine. There is need to check the accounts from money withdrawals. So far it’s a Public agency account.

Kazeem1
Kazeem1
Member
1 year ago

Beginning in March of 2023, the removal of funds from public accounts will be considered an illegal form of money laundering.

Chibuzor
Chibuzor
Member
1 year ago

This initiative is meant to supplement the work done by the Central Bank of Nigeria to combat financing for terrorists and to promote the use of electronic payment systems in the economy.

Adesanyaj72
Adesanyaj72
Member
1 year ago

The circular on cash withdrawal limitations issued by the CBN, which is in accordance with the law, has the backing of the unit.

Haykaylyon26
Member
1 year ago

This is a good way to check on corruption in public sector any action people can try to laundering money that will cause corruption should be monitor well and checked regularly

Ultra0711
Ultra0711
Member
1 year ago

This is undoubtedly a fantastic step in the fight against public account corruption. I’m starting to worry that the federal government won’t impose any regulations on them as well. But it’s encouraging to see that the law now applies to everyone.

Nwachukwu Kingsley
Nwachukwu Kingsley
Member
1 year ago

Since of their access to cash withdrawals from public accounts, government employees were found to be at a higher risk of being involved in money laundering and the crimes that lay at its foundation, according to the agency’s analysis of financial activities.

Iyanu12345ogg
Iyanu12345ogg
Member
1 year ago

If it is made at checking corruption practices in the public sector, then it is fine. There is need to check the accounts from money withdrawals. So far it’s a Public agency account.

Taiwoo
Taiwoo
Member
1 year ago

The violation of this particular clause has become so widespread as a direct result of the large cash withdrawals that have been forced from public accounts as a direct result of inflation and other shifts in the economy.

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
1 year ago

The majority of cash withdrawals from public accounts were in excess of N5 million or N10 million, both of which were illegal and may result in imprisonment or fines upon conviction.

Tonerol10
Tonerol10
Member
1 year ago

Public account withdrawal is money laundering. Government just need to do the needful before things go bad

Hassan Isa
Hassan Isa
Member
1 year ago

it is good The unit agrees with the Central Bank of Nigeria’s circular on cash withdrawal limitations, which is in accordance with the law.

SarahDiv
Member
1 year ago

If the CBN policy on public account withdrawal is now money laundering the and will be of the interest of the country then I am in support of it

Tolaniiii
Tolaniiii
Member
1 year ago

This is a useful technique to check public sector corruption. Any attempt to launder money and cause corruption should be monitored and reviewed constantly.

Christiana
Christiana
Member
1 year ago

This is a great public account corruption fight. I’m worried the feds won’t regulate them either. However, the law’s universality is encouraging.

Bola12
Bola12
Member
1 year ago

Inflation and other economic changes have prompted massive cash withdrawals from public accounts, resulting in widespread violation of this condition.

theApr
theApr
Member
1 year ago

This campaign is intended to support the Central Bank of Nigeria’s (CBN) initiatives to combat terrorism financing and advance a cashless society.

Remi1
Remi1
Member
1 year ago

The objective of the recently announced rules on this is to reduce money laundering, financing of terrorism, and the spread of weapons.