A REVIEW OF MONEY LAUNDERING ACT, 2022 BY J.S. OKUTEPA, SAN

 A REVIEW OF THE MONEY LAUNDERING (PREVENTION AND PROHIBITION) ACT, 2022: THE IMPLICATION FOR LEGAL PRACTICE IN NIGERIA, BEING A PAPER PRESENTED BY J.S. OKUTEPA SAN ON THE 23RD MAY 2023 AT NBA BWARI LAW WEEK

INTRODUCTION:

I thank the leadership of NBA Bwari Branch for the privilege to present this paper. I am to review the Money Laundering (Prevention and Prohibition) Act 2022 and then look at the implications for legal practice in Nigeria.

Money laundering is a global problem that affects countries around the world, including Nigeria. The practice of money laundering involves the conversion of illegally obtained funds into legitimate funds. This process is carried out to conceal the true source of the funds and to evade law enforcement. In Nigeria, the Money Laundering (Prohibition) Act of 2011 was enacted to address this problem. However, in 2022, the Money Laundering (Prevention and Prohibition) Act was passed into law, which updated and strengthened the already existing legal framework for combating money laundering in Nigeria.

This paper will provide a review of the Money Laundering (Prevention and Prohibition) Act, 2022 and its implications for legal practice in Nigeria.

OVERVIEW OF THE MONEY LAUNDERING (PREVENTION AND PROHIBITION) ACT, 2022

The Money Laundering (Prevention and prohibition) Act 2022 was passed into law on the 12th day of May 2022. The Act repealed the Money Laundering (Prohibition) Act, No. 11, 2011.The objective of the Act is stated in section 1 of the Money Laundering (Prevention and prohibition) Act 2022. The objectives of this Act are to— provide for an effective and comprehensive legal and institutional framework for the prevention, prohibition, detection, prosecution and punishment of money laundering and other related offences in Nigeria.

The Act strengthens the already existing system for combating money laundering and related offences, expands the scope of money laundering offences and provide appropriate penalties; and establish the Special Control Unit Against Money Laundering under the Economic and Financial Crimes Commission for effective implementation of the money laundering provisions of the Act in relation to the designated non-financial businesses and professions.

The Act stipulates the limitation of taking and accepting cash for both individuals and corporate body, it imposes a duty on the legal practitioners to verify the identity of their clients using reliable, independent source documents, data or information, preservation of records for at least five years following completion of transaction.

The Act provides a comprehensive framework for the prevention, prohibition, and control of money laundering activities in Nigeria. Its provisions apply to all financial institutions, designated non-financial businesses and professions, including legal practitioners, and other entities and individuals who engage in transactions with a value exceeding the threshold stipulated in the Act.

The primary objective of the Act is to prevent the use of the financial system in Nigeria for money laundering and terrorist financing activities. The Act also aims to promote transparency and accountability in financial transactions, protect the integrity of the financial system, and enhance the reputation of Nigeria in the international community.

Some of the key features of the Act include the establishment of the Financial Intelligence Unit (FIU) as the central agency responsible for receiving, analyzing, and disseminating financial intelligence reports to relevant agencies. The Act also provides for the registration, licensing, and regulation of all designated non-financial businesses and professions, including legal practitioners. 

IMPLICATIONS OF THE ACT FOR LEGAL PRACTICE IN NIGERIA

Legal practitioners are now mandated to disclose privileged  information and the invocation of client confidentiality shall not apply in connections to certain transactions. Legal practitioners are ministers in the temple of justice and owe their primary duty to the courts and the society by extension to combat the issue of money laundering by conducting due diligence, scrutinise transactions during the course of transactions, ensure that documents, data or information collected under the customer due diligence process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher risk categories of customers or business relationships.

Under the Act, legal practitioners are obligated to identify and verify the identity of their clients, maintain records of their transactions, and report any suspicious activities to the relevant authorities. Legal practitioners are also required to undergo regular training on money laundering prevention and detection to enhance their capacity in this regard.

Compliance with the Act may present some challenges for legal practitioners, including the need to implement new procedures, additional costs associated with compliance, and the risk of legal and reputational damage in case of non-compliance.

However, the importance of compliance with the Act cannot be overemphasized. Legal practitioners play a critical role in preventing and detecting money laundering activities, and non-compliance with the Act may have far-reaching implications for their clients, the legal profession, and the country as a whole.

THE ROLE OF LEGAL PRACTITIONERS IN COMBATING MONEY LAUNDERING IN NIGERIA

Legal practitioners play a crucial role in preventing and detecting money laundering activities in Nigeria. As gatekeepers of the legal profession, legal practitioners are uniquely positioned to identify and report suspicious activities by their clients. To ensure compliance with the Act, legal practitioners can take several measures, including conducting due diligence on their clients, implementing know-your-customer (KYC) procedures, and ensuring that their staff members are adequately trained on money laundering prevention and detection.

Legal practitioners can also collaborate with relevant agencies such as the FIU and other law enforcement agencies in sharing information and reporting suspicious activities. Such collaborations will enhance the effectiveness of efforts aimed at combating money laundering in Nigeria.

The role of legal practitioners in combating money laundering in Nigeria cannot be overstated. By ensuring compliance with the Act, legal practitioners can contribute to the prevention of money laundering activities, promote the integrity of the financial system, and enhance the reputation of the legal profession in Nigeria.

Let me say that as legal practitioners we have crucial roles to play for the growth and development of Nigerian society and its economy. We have the duties and responsibilities to be the light that shines in the darkness of corruption. We are ministers in the temple of justice. Our practice and our conduct must always be the mirror of righteousness. We are leaders of the society. The objectives of the money Laundering Act have been stated earlier. I need not set them here again. 

I know that many will expect me to look at the Act and speak about how this law will be in conflict with the duties of confidentiality of clients-lawyers relationship. Unfortunately, I will disappoint many. I have always maintained that as lawyers we are leaders. We must get it right as a nation. The purpose of Money Laundering Act is to stop corruption amongst others objectives. Many developed Countries of the world are developed based on sincere respect for the rule of law. Lawyers lead. Lawyers show examples of respect for law and orders. That is why we have code of conduct. But I ask when are we going to get it right as a nation. 

With May 29th 2023 handover date, to another civilian, many who have put us in democratic darkness in Nigeria are jostling for political rewards in appointments and positions. Those who have nothing to give other than truncating the democratic will of the people are being positioned for reward in strategic positions for continuous looting perhaps of our national treasury.

It is rewarding evils and not punishing wickedness that has enabled more evils in our land. The sores we keep tolerating as a nation are gradually getting the Nigerian nation to political and economic amputation. Many otherwise good and intelligent youths hardly get employment. Those who have responsibilities to do good chose to do evils. How do you sell employment to unemployed and expect loyalty to Nigerian state. Yet government pays deaf ears to these evils. Those with good results are not getting jobs. What you know matters not. It is who you know. 

That we in this state of insanity worries me and many right-thinking Nigerians. The provisions of Money Laundering Act are aimed at combating and fighting corruption and eradicating it for the good of all. In a paper I delivered on the 3rd of November 2016 at NBA Lokoja Branch law Week, where I discussed the THE ROLE OF THE BAR IN THE FIGHT AGAINST CORRUPTION IN NIGERIA, I was emphatic on this question of corruption. 

This is what I said: It is common knowledge that Corruption is a crime against humanity in whatever form it is practiced. It aims at profiting a person, a group or a unit irrespective of the greater danger posed to the society or those who should not be so endangered. It is realistically a poisonous cankerworm that has eaten deep into the fabric of our society. It cannot be overemphasized to say that corruption is as old as the society in itself. It is also common knowledge that in whatever form it is practiced, the effect of corruption is highly corrosive. Corruption drains the wealth and resources of any nation and its people in Favour of few or a faction of it. Former Chief Justice of Nigeria, Chief Justice Uwais has this to say of corruption. Corruption is not only a disease which afflicts public officers alone but society as a whole. If it is therefore to be eradicated effectively, the solution to it must be pervasive to cover every segment of the society. See the case of Attorney General of Ondo State vs. The Attorney General of the Federation (2002) 9 NWLR (Pt.772) 337. For me Corruption is a heavy weight in our society. Corruption has not only eaten deep into the fabrics of the Nigerian society, rather corruption has become the fabric of the Nigerian state. The vice president of the Federal Republic Nigeria Prof. Yemi Osibanjo SAN put it bluntly when he said:  corruption is not an ethnic thing, there is an equal representation in the stealing as no one operates with his or ethnic group alone, the culprits are in every case seen so far, united by greed to steal and not by ethnic or religious interest.

Until we resolved to do what is right nothing good will come out of Nigeria. We must be ready to pay the price for greatness. First, we must follow the rule of law. There must be rewards for good and punishment for evils. Light and darkness must not be made to cohabit. It can’t work. Permit me to say that it is not all that are educated that are civilised. There are many educated uncivilized persons in the corridors of power. They steal without qualms. They use some lawyers to lauder money for them. They use this laundered money to rig elections. And we defend them.

The manner in which some lawyers keep defending desecration of democratic processes with arid legalistic and legal jargon since 1979 and from 1999 till date is what is responsible for the deteriorating disrespect for sovereignty of the people. Time for us as lawyers to think twice on our actions is now. Apart from professional fees we charge, is it not time we begin to ask ourselves many probing questions. Is our conduct contributing to growth and developments of democracy negatively or positively in Nigeria. How many lives have been lost based on our legal contributions to democracy in Nigeria.

Few days ago, I wrote that: Exploiting legal technicalities to install and continue to install and encourage and perpetuate wicked people in power especially those who have nothing to show for being in power and who have no right to be in power is as satanic, wicked, evil and unconstitutional. Those who violate the constitution to be in power are evils and we must stop defending them or encouraging them to lord it over us. We cannot continue to celebrate wicked and evil on the primordial legal rights. 

As lawyers we owe far more duty to justice than to individuals’ clients. We are not and should not be slaves to money and our clients. Our allegiance is to the constitution and our society. Many many years ago Crampton, J, made this point in R. vs O’Connel (1844) 7 LR P. 261 at 312-313. This is what his lordship said as far back as 1844. Hear his lordship. I would say to the advocate upon the subject, let your zeal be as warm as your heart’s blood, but let it be tempered with discretion and with self respect, let your independence be firm, uncompromising, but let it be chastened by personal humility, let your like for liberty amount to a passion but let it not appear to be a cloak for maliciousness…the office of the advocate …is a high one ….He gives tohis client the benefit of his learning, his talents and his judgment, but....He will ever bear in mind that if he be an advocate of an individual, yet he has a prior and perpetual retainer on behalf of truth and justice and there is no crown or other licence, which in any case or for any party or purpose can discharge him from that primary and paramount retainer.”

Again Lord Denning, that erudite jurist of credit and repute made it very profound in Rondel vs. Worsley (1967) 1 Q B 441, when his lordship in the most admirable fashion of immutable words hit the nail of the head in these words: As an advocate, he is a minister of justice equally with the judge. He must do all he honourably can on behalf of his client. I say all he honourably can because his duty is not only to his client. He has a duty to the court, which is paramount. He owes allegiance to a higher cause. It is the cause of truth and justice. He must disregard the most specific instructions of his client if they conflict with his duty to the court. The code which requires a barrister to do all this is not a code of law. It is a code of honour.

And in the Preamble to the Code of Conduct for Lawyers in the European Community (the CCBE Code of Conduct, 1989) it is therein provided as follows: In a society founded on respect for the rule of law, the lawyer fulfils a special role. His duties do not begin and end with faithful performance of what he is instructed to do so far as the law permits. A lawyer must serve the interest of the just as well as those whose rights and liberties he is entrusted to assert and defend; it is his duty not only to plead the client’s cause but to be his adviser. A lawyer’s function therefore, lays on him a variety of legal and moral obligations (sometimes appearing to be in conflict with each other) towards the client, the courts and other authorities before whom the lawyer pleads his client’s cause or acts on his behalf, the legal profession in general and each fellow member of it. In particular, he owes a duty to the public for whom the existence of a free and independent profession, bound together by respect for rules made by the profession itself, as an essential means of safeguarding human rights in the face of the power of the state and other interests in society.

As Nigerian lawyers, we have our code of conduct fashioned after the manner of the views of their lordships quoted above and the Rules cited hereof. It is on this basis that as lawyers we have greater duties to give light in darkness to Nigerian society by the manner, we conduct our affairs than we do presently. For me, no honest and righteous lawyer should fear and get worried or lose sleep over the provisions of the Money Laundering Act 2022. It is a law that criminalizes certain acts. As lawyers’ client’s confidentiality does not extend to covering criminal acts or aid and abetting it.

 CONCLUSION

In conclusion, the Money Laundering (Prevention and Prohibition) Act, 2022 is a crucial legislation in Nigeria aimed at preventing and prohibiting money laundering activities. The Act has significant implications for legal practice in Nigeria, and legal practitioners must comply with its provisions. Legal practitioners play a critical role in combating money laundering in Nigeria, and they can take measures to ensure compliance with the Act. It is essential for legal practitioners to understand their obligations under the Act and take steps to prevent and detect money laundering activities. Failure to comply with the Act can result in severe penalties, and it is therefore in the best interest of legal practitioners to take the necessary steps to ensure compliance. For me no legal practitioner whether in practice or on the bench should be seen as conduit pipe for criminal conduct including money laundering. Our code of ethics forbids it. Thank you all.