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Approaches to
Institutionalising the war against assets tracing
corruption: new approaches to and recovery

assets tracing and recovery

Ehi Eric Esoimeme 217
Department of Legal, DSC Publications Ltd, Lagos, Nigeria

Abstract
Purpose – This paper aims to critically analyse the existing framework on assets tracing and recovery in
Nigeria. It will thereafter provide analysis of the asset and recovery measures of advanced countries such as
the USA and the UK. The results from the analysis will yield maximum insight and help the Nigerian
Government to make better policies and laws on assets tracing and recovery.
Design/methodology/approach – This paper will rely on primary and secondary data drawn from the
public domain. It will also rely on documentary research.
Findings – This paper determined that the Nigeria asset recovery scheme is likely to be more effective if
Nigeria adopts the approach of the UK and the USA.
Research limitations/implications – This paper will suggest new ways for assets tracing and
recovery. The suggested approaches/methods are being used in advanced countries such as the UK and the
USA.
Originality/value – Previous research papers have extensively discussed the problems faced with assets
tracing and recovery from a prohibitive and investigative standpoint. This paper will discuss the topic from a
preventive standpoint with little focus on investigative mechanisms.
Keywords Corruption, Asset tracing, Asset recovery
Paper type Research paper

1. Introduction
In today’s environment sophisticated “criminals” are deploying (and ever more so) complex
financial vehicles to conceal the location and source of misappropriated assets. Resultantly,
it is difficult to identify assets located within and across multiple jurisdictions and moreover
it is problematic to obtain a favourable court order and enforce the recovery claim in these
local/international jurisdictions (Deloitte Forensic, 2015).
President Muhammadu Buhari’s administration has introduced a number of policy
measures for the tracing and recovery of stolen assets. For instance, on the 21 December 2016,
the Federal Executive Council approved the Ministry of Finance whistleblowing programme
that may see individuals, who voluntarily volunteers credible information on stolen or
concealed funds, smiling home with between 2.5 and 5 per cent of the funds when recovered.
The primary purpose of the policy is to support the fight against financial crimes and
corruption, promote accountability and enhance transparency in the management of public
finances (The Punch, 2017). Other policies introduced by the Federal Executive Council of
Nigeria include: treasury single account policy, plea bargaining and federal government’s
surveillance programme. While many of the policies have achieved great success, a lot still Journal of Financial Crime
needs to be done. The United Nations Secretary-General Antonio Guterres recently appealed to Vol. 27 No. 1, 2020
pp. 217-230
the international community to take action against the flow of illegal funds, money-laundering © Emerald Publishing Limited
1359-0790
and tax evasion, which cost Africa $50bn every year (The Punch, 2018). It is believed that some DOI 10.1108/JFC-12-2018-0125
JFC of these funds are in Nigeria while others are overseas or in offshore jurisdictions like Panama.
27,1 Finding and returning assets held in secret corporate structures in multiple jurisdictions is a
lengthy and arduous process that is fraught with legal complications. The Stolen Asset
Recovery Initiative (StAR) in Washington estimates up to $40bn is lost each year to developing
countries through corruption and only $5bn was returned in the 15 years till 2011. Most are
never found (Financial Times, 2014). This revelation calls for an entirely new approach/
218 direction to be taken for the identification and recovery of assets. The approach should be one
that can curtail the flow of illegal funds, money-laundering and tax evasion.
This paper starts by briefly defining corruption, money laundering and asset tracing/
recovery for readers to appreciate the topic. Then, it will discuss the existing framework for
assets tracing and recovery and suggest new ways to improve the asset tracing/recovery
scheme in Nigeria.

1.1 What is corruption and money laundering?

Corruption is defined by the World Bank and transparency international as “the misuse of
public office for private gain”. As such, it involves the improper and unlawful behaviour of
public-service officials, both politicians and civil servants, whose positions create
opportunities for the diversion of money and assets from the government to themselves and
their accomplices (Langseth, 1999).
Money laundering is the process that transforms illegal inputs into supposedly
legitimate outputs. Proceeds gained by crimes such as fraud, theft and drug trafficking are
made to look as if they were the fruits of honest hard labour – transformed, for instance, into
legitimate-looking bank accounts, real estate or luxury goods (Esoimeme, 2015).

1.2 What does asset tracing and recovery mean?

Asset tracing is the process by which investigators “follow the money”. Investigators trace
assets by conducting financial investigations, during which they determine a subject’s
assets, examine the revenue generated by criminal activity and follow its trail (Center
Advancement Public Integrity, 2016).
Asset tracing provides many benefits in white-collar cases, including in public
corruption cases. First, these investigations help to prove the crime by providing valuable
evidence. Such evidence can corroborate informants and undercover officers, identify new
witnesses for trial and corroborate witness testimony. Second, asset tracing helps to
generate new leads for the investigation, potentially leading to additional targets and/or
charges. Third, tracing results in the identification of assets subject to forfeiture in
connection with the crime. Asset forfeiture can have a huge impact on criminal cases,
particularly when it is used to seize significant assets from criminal organisations. In effect,
asset forfeiture takes the profit out of crime. A financial investigation can also turn up
evidence that is useful at sentencing. Finally, financial investigations can help in the process
of restitution, returning money and property to victims of crimes (Center Advancement
Public Integrity, 2016).
Asset recovery is a promising strategy against graft, embezzlement of public funds and
corruption. It involves freezing, confiscation, mutual legal assistance and repatriation of
assets. The United Nations Convention against Corruption and, in particular, the joint
initiative by the World Bank and the United Nations Office on Drugs and Crime termed
StAR, have pushed the issue up the political agenda (Basel Institute on Governance, 2009).
1.3 Steps of asset tracing/recovery Approaches to
Successful asset tracing and recovery will involve the following steps: tracing and assets tracing
identifying; freezing or seizure; confiscating, civil recovery, management of frozen, seized
and confiscated property; and repatriating the proceeds of corruption.
and recovery
1.3.1 Tracing and identifying. Asset tracing, as the opening salvo of what can end up
being a long, boring and frustrating process, is where the greatest skills are most likely to be
needed because of the cascading and labyrinthine processes of money laundering and asset
219
concealment. Law enforcement agents in Nigeria usually use suspicious activity reports
filed by financial institutions to trace and identify illicit assets. Little emphasis is placed on
reports filed by designated non-financial institutions.
1.3.2 Freezing or seizure. If the first step shows positive results, and assets and funds
can be traced, step two will consist of appropriate legal actions required to be taken to freeze
them. “Freezing” or “seizure” means temporarily prohibiting the transfer, conversion,
disposition or movement of property or temporarily assuming custody or control of the
property on the basis of an order issued by a court or other competent authority[1].
Seizure measures are provided for in Sections 26, 29 and 30 of the Economic and
Financial Crimes Commission (Establishment) Act, 2004. While Section 34 with its schedule
B specifies the procedure for freezing suspects’ accounts in a bank or other financial
institution, Section 26 deals with seizure of property pursuant to arrest, search or
confiscation.
1.3.3 Confiscation. Confiscation is an essential tool in the prosecutor’s toolkit to deprive
offenders of the proceeds of their criminal conduct; to deter the commission of further
offences; and to reduce the profits available to fund further criminal enterprises (See R v
Rezvi [2002] UKHL 1 and R v Waya [2012] UKSC 51).
The specific provisions on confiscation are found in Sections 20-25 of the Economic and
Financial Crimes Commission (Establishment) Act, 2004.
The delay being experienced in corruption cases is hindering the federal government
from accessing and using monies seized from corrupt persons standing trials. Court cases on
corruption have been lasting for years. Some have lasted for 10 years and for eight years
(Adetayo, 2016).
1.3.4 Civil recovery, cash recovery proceedings and taxation. If confiscation proceedings
are not appropriate it may be that other forms of asset recovery may be relevant. Those
include civil recovery, cash recovery proceedings and taxation.
Nigeria is yet to enact legislation that sets out a system for confiscating the proceeds of
crime in the absence of a criminal conviction through the civil courts. What is being used
presently to recover assets is the Advance Fee Fraud and other Fraud Related Offences Act
2006, and this legislation is limited to cases involving fraud and other related offences.
There is also no legal framework that sets out powers to seize and forfeit cash, through a
civil process, where there are reasonable grounds to suspect that it is the proceeds of crime.
1.3.5 Management of frozen, seized and confiscated property. To enhance the
effectiveness of confiscation regimes, countries need to implement a program for efficiently
managing frozen, seized and confiscated property and, where necessary, disposing of such
property (Financial Action Task Force, 2012). In Nigeria, there is currently no
comprehensive legal and institutional framework for the recovery and management of
proceeds of crime or benefits derived from unlawful activities. What we have now creates a
very consuming system that have left both the victim, the state as losers as the values
recovered by agencies of government end up decrepit and decaying with little or no
accountability or ultimate responsibility.
JFC 1.3.6 Repatriating the proceeds of corruption. Repatriation involves a country making a
27,1 request to another country to repatriate to the requester assets held in that country. They are
most commonly used in relation to funds held in overseas bank accounts, which are
vulnerable to dissipation before a letter of request can be issued and actioned to secure them.
With a final and locally enforceable order, the requester of preliminary measures will be able
to take possession of the frozen or seized assets (Knoetzl and Marsch, 2012).
220 Repatriation of proceeds of corruption may be handled through the United Nations
Convention against corruption and some bilateral mutual legal assistance treaties.
The law governing mutual assistance in criminal matters in Nigeria is the Mutual
Assistance in Criminal Matters within the Commonwealth (Enactment and Enforcement)
Act, 2004. “Assistance” means the request for any of the various forms of assistance
available under the provisions of the Commonwealth (Enactment and Enforcement) Act.
This Act applies to every separate country within the Commonwealth. It does not apply
to countries outside the Commonwealth[2]. What this means is that a bilateral agreement
will have to be drawn up where the “requested country” is not a Commonwealth country but
the “requesting country” is a Commonwealth country. This may create extreme difficulty for
the requesting country.

2. New approaches to assets tracing and recovery

This section suggests new ways for tracing and recovering illicit assets in Nigeria. The
suggested approaches/methods are being used in advanced countries such as the UK and
the USA.

2.1 Using investigative orders to trace and identify illicit assets

Under the UK’s Proceeds of Crime Act, 2002, a financial investigator can obtain the
following orders with the authority of the court:

Production orders requiring someone in possession or control of information about a
suspect’s financial affairs to produce it to the financial investigator or give him
access to it.

Customer information orders requiring a financial institution to provide customer
information e.g. account details, addresses, dates of birth of account holder, etc.

Account monitoring orders allowing the financial investigator to monitor
transactions in an account for up to 90 days at a time.

The prosecution may also issue disclosure notices requiring the person to whom it is
given to answer questions, provide information and produce documents relevant to
the investigation.

The prosecution may also seek financial reporting orders requiring an offender to
make reports about their financial affairs on a regular basis for up to 15 years after
conviction.

On 27 April 2017, the UK parliament passed an important provision of the Criminal
Finances Bill that introduces a powerful new weapon into the anti-corruption
arsenal: unexplained wealth orders[3] (UWO). This follows action already taken
in Australia and Ireland. This provision is not seen present in the Nigerian laws on
civil recovery. The provision specifically targets red flag situations where a person
buying expensive items, like property or jewels, does not appear to be wealthy
enough to make the purchase. It could be a politician in Russia or a small business
owner in Brussels who buys a multi-million-pound property in central London. If
 the person has links to serious crime or access to public money, then the authorities Approaches to
can act. UWO will mean an individual or company will have to explain the origin of assets tracing
assets that appear to be disproportionate to their known income and if they are
suspected of involvement in or association with serious criminality. The power can
and recovery
also be applied to foreign politicians or officials, their family members or close
associates, as such people can pose a particularly high corruption risk. The National
Crime Agency, Crown Prosecution Service, Financial Conduct Authority, Serious
Fraud Office and HM Revenue and Customs will all be able to apply for a UWO. If 221
content with the application, the court would issue a UWO. If the individual or
company were not able to provide a response to the UWO it would mean law
enforcement agencies could try and recover the property through existing civil
recovery powers. This power, along with the existing civil recovery powers, will be
subject to safeguards, for example, the decision will be made by a High Court judge.

Investigative orders would fill a key gap in Nigeria’s anti-corruption legislation, and make
sure that Nigeria is no longer seen as a safe haven for corrupt wealth. Law enforcement
agents who are unable to prosecute matters because of limited or insufficient evidence will
be able to use Investigative Orders.

2.2 Using communications data to trace and identify illicit assets

Communications data is information about communications: the “who”, “where”, “when”,
“how” and “with whom” of a communication but not what was written or said. It includes
information such as the subscriber to telephone service or an itemised bill. Law enforcement
and the security and intelligence agencies may acquire this data from communications
service providers (CSPs) who may be required to retain it. Accessing the communications
data of an individual does not disclose what that person wrote or said, rather when they
communicated, where, how and with whom.
A kind of communications data, an internet connection record (ICR) is a record of the
internet services a specific device has connected to, such as a website or instant messaging
application. It is captured by the company providing access to the internet. Where available,
this data may be acquired from CSPs by law enforcement and the security and intelligence
agencies (Home Office, 2015). An ICR is not a person’s full internet browsing history. It is a
record of the services that they have connected to, which can provide vital investigative
leads. It would not reveal every web page that they visit or anything that they do on that
web page.
Communications data is indeed a vital tool that can be used to investigate crime and trace
assets. It is used in 95 per cent of serious and organised crime prosecution cases handled by
the UK’s Crown Prosecution Service Organised Crime Division and has been used in every
major security service counter-terrorism investigation over the past decade (Home Office,
2016a).
There are robust safeguards that apply to any application for the acquisition of
communications data in the UK. Then, those safeguards are set out expressly in the
Investigatory Powers Act 2016. However, in Nigeria, there is no specific legislation
providing for robust safeguards for the acquisition of communications data.
It is axiomatic that for any interference with the fundamental right to privacy to be in
accordance with the law there must be a lawful domestic basis for it, this law must be
adequately accessible to the public, and its operation must be sufficiently foreseeable so that
people who are subject to it can regulate their conduct accordingly[4].
In S and Marper v. UK, the European Court of Human Rights set out that:
JFC [. . .] it is essential [. . .] [in the context of] secret surveillance and covert intelligence-gathering, to
have clear, detailed rules governing the scope and application of measures, as well as minimum
27,1 safeguards concerning, inter alia, duration, storage, usage, access of third parties, procedures for
preserving the integrity and confidentiality of data and procedures for its destruction [. . .] (Home
Office, 2016b).
2.3 Using interception and equipment interference warrant to trace and identify illicit assets
222 Information obtained by interception or equipment interference can reveal the content of a
communication and make clear what is being said or written. The data obtained can assist
in the tracing/identification of illicit assets.
Interception is the making available of the content of a communication – such as a
telephone call, email or social media message – in the course of its transmission or while
stored on a telecommunications system.
Equipment interference allows the security and intelligence agencies, law enforcement
and the armed forces to interfere with electronic equipment such as computers and
smartphones to obtain data, such as communications from a device. Equipment interference
encompasses a wide range of activities from remote access to computers to downloading
covertly the contents of a mobile phone during a search (Home Office, 2015).
There are robust safeguards that apply to any application for interception and
equipment interference warrant in the UK. Then, those safeguards are set out expressly in
the Investigatory Powers Act 2016. However, in Nigeria, there is no specific legislation
providing for robust safeguards for interception and equipment interference warrant.

2.4 Using the blockchain technology to trace and identify illicit assets
Financial institutions in Nigeria should start to adopt blockchain technology for know your
customer purposes. In 2014, it was estimated that global spending on anti-money laundering
(AML) compliance alone amounted to $10bn. Banks are also under pressure from investors
and analysts to reduce cost but many expect the compliance budgets to increase in the
coming years rather than to decrease. Furthermore, banks are penalised through regulatory
fines for failing to follow know your customer guidelines (Intellect Design Arena Limited,
2017). A blockchain is essentially a database that records transactions of companies/
institutions. For example, all transactions made by Company A are grouped together into a
“block” and these are ordered chronologically to form a blockchain. This allows blockchains
to be used like a ledger, which can be shared and corroborated by anyone with the
appropriate permissions. The certainty this creates is hugely beneficial to regulators, banks
or law enforcement agencies because they can instantaneously verify the credentials of
parties involved in a transaction and identify any discrepancies in the information. Not only
is this cost-effective but also it enables regulators to quickly target criminal activity
(Phillips, 2017). On 31 August 2017, six of the world’s largest banks, Barclays, CIBC, Credit
Suisse, HSBC, MUFG and State Street, announced backing of the UBS and Clearmatics-
spearheaded utility settlement coin, joining other industry heavyweights who have already
pledged their support for the project, including BNY Mellon, Deutsche Bank and Santander
(Arnold, 2017). The project is designed to help prepare the way for central bank
cryptocurrencies by making it easier for global banks to conduct a wide variety of
transactions with each other using collateralised assets on a custom-built blockchain
(Coindesk, 2017).

2.5 Using beneficial ownership information to trace and identify illicit assets
The use of shell companies to hide assets and avoid taxes is in the spotlight following a
massive leak of data from the Panama-based law firm Mossack Fonseca, which
embarrassed several world leaders and sparked government investigations around the Approaches to
globe into possible financial wrongdoing by the wealthy elite (Reuters, 2016). A shell assets tracing
company is a legal entity that has been registered with a state but has no physical
operations or assets. Shell companies can serve legitimate purposes such as holding
and recovery
financial assets or other property, but can also be used to conceal the source, ownership or
control of illegal proceeds (Financial Crimes Enforcement Network, 2016).
On 11 May 2016, the United States Financial Crimes Enforcement Network (FINCEN)
issued final rules under the Bank Secrecy Act to clarify and strengthen customer due 223
diligence (CDD) requirements for: banks; brokers or dealers in securities; mutual funds; and
futures commission merchants and introducing brokers in commodities. The rules contain
explicit CDD requirements and include a new requirement to identify and verify the identity
of beneficial owners of legal entity customers, subject to certain exclusions and exemptions.
The regulation was effective July 2016, but only applicable to accounts opened on or after 11
May 2018. On 11 May 2018, the effective date, FINCEN issued more guidance to the
industry.
Covered financial institutions are not presently required to know the identity of the
individuals who own or control their legal entity customers (also known as beneficial owners).
This enables criminals, kleptocrats and others looking to hide ill-gotten proceeds to access the
financial system anonymously. The beneficial ownership requirement will address this
weakness and provide information that will assist law enforcement in financial investigations,
help prevent evasion of targeted financial sanctions, improve the ability of financial institutions
to assess risk, facilitate tax compliance and advance US compliance with international
standards and commitments (Financial Crimes Enforcement Network, 2016).
The final CDD rule will require banks, brokers, mutual funds and other financial
institutions to collect and verify the identities of the real people or “beneficial owners”, who
own and control companies when those companies open accounts.
Financial institutions will have to verify the identity of any person or company who owns
more than 25 per cent of the company, and one live person who controls the company even if
that person owns less than 25 per cent (Financial Crimes Enforcement Network, 2016).
The Central Bank of Nigeria is yet to issue a rule requiring the financial industry to
identify the real owners of companies and proposing a bill that would require companies to
report the identities of their owners to the federal government.

2.6 Using suspicious activity reports filed by bureau de change operators to trace illicit assets
Many criminal groups require large amounts of foreign currency to pay their suppliers
overseas. They also seek to reduce the bulk of the currency they smuggle through borders
by using high denomination notes.
Cases involving bureau de change operators indicate that criminals use a bureau de
change operators to convert street cash into smaller bundles of high denomination foreign
notes to conceal the origins of funds and as a precursor to cash movement or cash
smuggling across borders. This activity will not be detected where there is negligence or a
lack of compliance on the part of the bureau de change operator or other entity (HM
Treasury and Home Office, 2015).
Bureau de change operators are required under Section 3 of the Nigerian Money
Laundering (Prohibition) Act, 2011 (as amended) to do their due diligence properly and to
apply a risk-based approach to their customer identification and verification programme.
This provision is not effectively enforced as it should be by the Central Bank of Nigeria.
Bureau de change operators should establish a systematic procedure for identifying new
customers and should not establish a business relationship until the identity of a new
JFC customer is satisfactorily verified. For the business to flourish, bureau de change operators
27,1 should apply a risk-based approach to their CDD program. CDD should be done at outset of
the business relationship and when a transaction of significance takes place, for example,
when the customer intends to do a currency exchange of the sum of ₦5m or more, bureau de
change operators should take adequate meaningful measures to establish the source of
funds and source of wealth in this situation. In all cases, if a bureau de change operator
224 suspects that the funds are proceeds of criminal activity, the bureau de change operator
should be required to file a suspicious transaction report with the financial intelligence unit.
Suspicious activity reports filed by bureau de change operators would assist tremendously
in tracing and identifying assets.

2.7 Using suspicious activity reports filed by real estate agents to trace illicit assets
Property is a favoured method for criminals to integrate the proceeds of crime into the
legitimate economic and financial system, often after layering the proceeds using legal
entities and arrangements. This means the property may be bought by a company or trust
used by the criminal or their accomplice to make it more difficult to identify or trace the
illicit activity that generated the funds. There are known professional enablers within the
estate agency sector who are facilitating money laundering through arranging and
negotiating the purchase of property (HM Treasury and Home Office, 2015).
London real estate has long been recognised as a prime destination for illicit proceeds
worldwide, with analysts and law enforcement citing the city’s status as a preeminent
financial centre, a super-heated property market and the ability to purchase and hold
properties using largely anonymous shell corporations as key drivers.
Offshore companies reportedly hold more than $190bn in real estate in the UK, much of it
in London, with Russian, Chinese and Qatari investors leading the way. In a recent interview
with British publication the Guardian, the director of economic crime at the UK’s National
Crime Agency stated that “Prices [in London real estate] are being artificially driven up by
overseas criminals who want to sequester their assets here in the UK” (Kindle, 2015).
In 2012, in California, a San Diego real estate agent was sentenced to prison for helping
drug traffickers purchase property. The real estate agent admitted he facilitated false loan
applications in the name of nominee purchasers, verification documents and financial
documents. The real estate agent admitted falsifying the purchaser’s income, employment
history and the source of down payments for the properties (U.S. Department of the
Treasury, 2015).
Dealers in real estate, estate developers, estate agents and brokers are required under Section
3 of the Nigerian Money Laundering (Prohibition) Act, 2011 (as amended) to do their due
diligence properly and to apply a risk-based approach to their customer identification and
verification programme. This provision is not effectively enforced as it should be by the special
control unit against money laundering. Real estate agents should have robust CDD measures in
place that enable them to identify and verify customers and beneficial owners, obtain
information on the purposes and intended nature of the business relationships/transactions and
conduct ongoing due diligence. Real estate agents should know the name, address and
occupation of potential buyers and sellers, and the source of funds and wealth of their customers.

2.8 Using suspicious activity reports filed by dealers in jewellery, cars and luxury goods to
trace illicit assets
Dealers in jewellery, cars and luxury goods are required under Section 3 of the Nigerian
Money Laundering (Prohibition) Act, 2011 (as amended) to do their due diligence properly,
and to apply a risk-based approach to their customer identification and verification
programme. This provision is not effectively enforced as it should be by the special control Approaches to
unit against money laundering. assets tracing
The nature of services and products the sector provides makes it attractive to criminals
seeking to convert criminal proceeds into luxury goods, high value portable assets, which
and recovery
can be easily moved outside Nigeria or to conceal the origins of criminally derived cash.
Customer identification programme for dealers in jewellery, cars and luxury goods should
detail the identification requirements for establishing a business relationship with a
customer. The programme should include the use of documentary and non-documentary 225
methods to verify a customer. In addition, Dealers in jewellery, cars and luxury goods must
maintain enhanced due diligence procedures for politically exposed persons or senior
political figures.
The policies, procedures and processes of dealers in jewellery, cars and luxury goods
should provide for sound due diligence and verification practices, adequate risk assessment
of customer’s transactions and ongoing monitoring and reporting of unusual or suspicious
transactions. Suspicious activity reports filed by dealers in jewellery, cars and luxury goods
would assist tremendously in tracing and identifying assets.

2.9 Using suspicious activity reports filed by casinos to trace illicit assets
Casinos in Nigeria are required by Sections 3 and 4 of the Nigerian Money Laundering
(Prohibition) Act, 2011 (as amended) to do their due diligence properly, and to apply a risk-
based approach to their customer identification and verification programme. This provision
is not effectively enforced as it should be by the special control unit against money
laundering.
In accepting business from customers: gambling operators should apply equally effective
customer identification procedures for face-to-face and non-face-to-face customers; and there
must be specific and adequate measures to mitigate the higher risk.

2.10 Strengthening the Nigerian asset recovery scheme by enacting comprehensive

legislation to provide a domestic legal framework for mutual legal assistance
The Nigeria asset recovery scheme is likely to be more effective when the mutual assistance
in criminal matters bill, 2016 becomes law.
The Senate on Tuesday, 30 May 2017, passed the bill for mutual assistance in criminal
matters between Nigeria and other foreign countries to facilitate the identification, tracing,
freezing, restraining, recovery, forfeiture and confiscation of proceeds, property and other
instrumentalities of crimes (PLAC, 2017).
Apart from the mutual assistance in criminal matters in the Commonwealth (Enactment
and Enforcement) Act, 2004, which is in itself limited in the application even in the
commonwealth countries, there is no specific legislation in place to address the broad
spectrum of criminal matters that require mutual assistance or international cooperation. It
is the absence of this legislation that made Nigeria resort to various bilateral agreements
with countries outside the commonwealth for the purpose of mutual assistance as an interim
measure, which is cumbersome and unsustainable. The mutual assistance in criminal
matters bill, 2016 is a great improvement on the existing legislation.
According to a report by the Nigerian National Assembly joint committee on judiciary,
human rights and legal matters; anti-corruption and financial crimes; and foreign affairs, the
bill will go a long way to assist Nigeria in the repatriation of looted funds and other proceeds
of crime stashed away in foreign countries. The sovereignty and jurisdictional constraints
make it inevitable that there should be inter-state cooperation in fighting crimes, hence, the
introduction of this bill.
JFC The passage of the bill will enable Nigeria to obtain evidence and statements, identify
27,1 suspects and witnesses, transfer suspects, trace, retrieve, forfeit and confiscate proceeds and
instrumentalities of crime and other forms of assistance based on mutual arrangements and
agreements.

3. Conclusion
226 In view of the discussion in the previous sections, this paper recommends the following:

The Nigeria asset recovery scheme is likely to be more effective when the Proceeds
of Crime Bill, 2017 becomes law. The House of Representatives passed the Proceeds
of Crime Bill, 2017, on 27 July 2018. The bill had also scaled through second reading
in the Senate and is awaiting consideration by the Committee of the Whole
(ThisDay, 2018). The Nigerian proceeds of crime bill seek to provide the legal and
institutional framework for the recovery and management of proceeds of crime in
such a manner that is more organised, coordinated and allows the country to benefit
from rather than lose the value of the property obtained from these illegal activities.
The bill also seeks to provide for production orders, customer information orders,
account monitoring orders, disclosure notices and financial reporting orders. The
bill should be revised to include UWO. What we have now creates a very consuming
system that have left both the victim, the state as losers as the values recovered by
agencies of government end up decrepit and decaying with little or no
accountability or ultimate responsibility. This bill is aimed at providing the
necessary consolidation of the existing provisions on the recovery of proceeds of
assets across our law enforcement agencies and creates the institutional structures
that will eliminate corruption in the handling of proceeds of crime while allowing
law enforcement to focus on their key role of arrest, investigation and prosecution of
cases. The objectives of the bill, therefore, are to: provide for an effective legal and
institutional framework for the recovery and management of proceeds of crime or
benefits derived from unlawful activities; deprive a person of the proceeds of an
unlawful activity and other benefits derived from an offence committed within or
outside Nigeria; prevent the reinvestment of proceeds of unlawful activities in the
furtherance of criminal enterprise; harmonise and consolidate existing legislative
provisions on the recovery of proceeds of crime and related matters in Nigeria; and
make comprehensive provisions for the restraint, seizure, confiscation and forfeiture
of property derived from unlawful activities and any instrumentalities used or
intended to be used in the commission of such unlawful activities. The bill will
enable a prosecuting agency to identify properties, which are proceeds of crime and
commence forfeiture proceedings against the properties in situations where the
defendant cannot be prosecuted either because he is dead or out of jurisdiction. The
assets forfeiture law is today one of the key missing links to our fight against
corruption. Therefore, the proceeds of crime bill we have here today has the
potential to radically swing the pendulum of the anti-corruption war firmly in the
favour of the country. We are today struggling to recover or confiscate the proceeds
of corruption that we have identified and even moved against both home and
abroad. With this law we will be better equipped to deal with the proceeds of this
kind of activities and make it easier for our anti-graft agencies to not only prosecute
and jail economic criminals but also to effectively recover for the country the value
that may have been taken and more. The assets recovery and forfeiture agency set
up under this law will be empowered to administer the proceeds of crime and
establish a special account for the recovery and safekeeping of monies recovered
 from as proceeds of crime. The Proceeds of Crime Bill, 2017 should be given Approaches to
accelerated consideration in the Nigerian National Assembly based on its urgency assets tracing
and significance for the anti-corruption war. Civil (non-conviction based) judicial
forfeiture is an essential tool in the fight against corruption to deprive offenders of
and recovery
the proceeds of their criminal conduct; to deter the commission of further offences;
and to reduce the profits available to fund further corrupt or criminal enterprises.

The Federal Government of Nigeria should introduce a bill to the National 227
Assembly that would provide a clear framework for the use of investigatory powers
by law enforcement, the security and intelligence agencies and other public
authorities. This includes the interception of communications, the retention and
acquisition of communications data, the use of equipment interference and the
retention and use of bulk data by the security and intelligence agencies. The bill
must establish a number of safeguards against the arbitrary or unlawful use of
investigatory powers by the executive. The UK’s Investigatory Powers Act 2016, for
example, established a number of safeguards for the retention and acquisition of
communications data[5]. Authorisations for obtaining communications data will
have to set out why accessing the communications data in question is necessary in a
specific investigation for a particular statutory purpose, and how it is proportionate
to what is sought to be achieved[6].

The Central Bank of Nigeria should mandate financial institutions in Nigeria to use
the blockchain technology for know your customer purposes. The blockchain
technology will aid law enforcement agents to identify and trace proceeds of
criminal activity.

The Central Bank of Nigeria should issue a rule requiring the financial industry to
identify the real owners of companies and propose a bill that would require
companies to report the identities of their owners to the federal government.

Bureau de change operators, estate agents, high value dealers e.g. dealers in
jewellery, cars and luxury goods and gambling operators should be effectively
supervised and monitored for compliance with AML and countering the
financing of terrorism (AML/CFT) requirements, namely, CDD, record keeping
and reporting. This should be performed on a risk-sensitive basis. This may be
performed by the Central Bank of Nigeria (the apex body in charge of
supervising financial institutions in Nigeria) and the special control unit against
money laundering (the body charged with supervising non-designated financial
institutions in Nigeria), provided that the Central Bank of Nigeria and the
special control unit against money laundering can ensure that its members
comply with their obligations to combat money laundering and terrorist
financing as stipulated in the Nigerian Money Laundering (Prohibition) Act,
2011 (as amended). Furthermore, criminals or their associates should be
prevented from being accredited, licensed or being the beneficial owner of a
significant or controlling interest in or holding a management function in a
currency exchange business, real estate business, Casino business or a diamond
dealing business, e.g. by evaluating persons on the basis of a “fit and proper”
test. This is in line with recommendation 28 of the financial action task force
recommendations.

The Mutual Assistance in Criminal Matters Bill, 2016 should be given
accelerated consideration in the Nigerian National Assembly based on its
urgency and significance for assets tracing and recovery. A national mutual
JFC legal assistance legislation is necessary to address issues that treaties generally
27,1 do not cover such as the procedures for obtaining a search warrant, compelling
the attendance of a witness or appealing a decision of judicial or law enforcement
authorities. If a country wishes to provide assistance in the absence of a treaty,
then legislation maybe even more important. In short, a complete framework for
mutual legal assistance usually includes not only treaties but also some form of
228 legislation.

Notes
1. United Nations Convention against Transnational Organised Crime and the Protocols Thereto,
2004, Article 2(f).
2. Commonwealth (Enactment and Enforcement) Act, 2004, s. 1(2).
3. Criminal Finances Act 2017, s. 1, s. 2, s. 3, s. 4, s. 5 and s. 6.
4. Constitution of the Federal Republic of Nigeria 1999 (as amended), s. 37 and s. 45 (1). See also
Hassan v. E.F.C.C. (2014) I NWLR (Pt. 1389) 607 at 625.
5. See the UK’s Investigatory Powers Act 2016, Section 61 on safeguards for acquisition of
communications data and Sections 87-93 on safeguards for retention of communications data.
6. Investigation Powers Act 2016, s. 61 (1).

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JFC About the author
27,1 Ehi Eric Esoimeme is the Deputy Editor in Chief of DSC Publications Ltd. His areas of expertise include
amongst others: comparative law, money laundering law, international banking law, energy law,
intellectual property law and criminal law. He has authored more than 20 publications, including four
books on money laundering law/banking law. His second book titled “The Risk-Based Approach to
Combating Money Laundering and Terrorist Financing” became a bestseller on Amazon for banking law.
His fourth book titled “Deterring and Detecting Money Laundering and Terrorist Financing: A
230 Comparative Analysis of Anti–Money Laundering and Counterterrorism Financing Strategies” has
received many commendations from both academic researchers and Anti-Money Laundering
professionals. For more information on visit. www.amazon.com/Ehi-Eric-Esoimeme-Esq/e/B00OESQ4VS
Follow on LinkedIn: https://ng.linkedin.com/pub/ehi-esoimeme/70/912/b3b Download articles here: http://
ssrn.com/author=2237772. Ehi Eric Esoimeme can be contacted at: ehiesoimeme@yahoo.com

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