By Bassey Udo
All Federal, State and Local Governments and their agencies have been barred from carrying out any forms of cash transactions from official accounts either in local or foreign currencies, the Nigerian Financial Intelligence Unit (NFIU) has announced.
The agency said the announcement was pursuant to its statutory responsibility under Section 3(1) a-s and Section 23(2) a of the NFIU Act, 2018, as well as other provisions under the Money Laundering (Prevention and Prohibition) Act (MLPPA) 2022).
The guidelines were issued on Thursday in Abuja by the Director/CEO of the agency, Modibbo Hamman Tukur, as part of efforts to ensure compliance by all financial institutions, non-financial institutions and public officials in the country.
Tukur said NFIU’s guidelines, which are expected to take effect from March 1,2023, apply to all foreign Missions in Nigeria, accounts of all development partner institutions, and the accounts of all instituted funds in form of independent funds to be operated as mutual funds, such as insurance funds, cooperative funds, brokerages funds, political party funds or pressure group/union funds, once the funds are designated to exist as funds or to operate independently for management and/or investment.
The issuance of the guidelines, he said, were informed by the need to enforce the requirements of the law, particularly Sections 2 and 13 of the MLPPA, 2022; Section 26 of the Proceeds of Crime (Recovery and Management) Act, (POCA) 2022, and the Central Bank of Nigeria (CBN) circular on the revised cash withdrawal limits, issued pursuant to its powers under the CBN Act, 2007, and Banks and Other Financial Institutions Act, 2020.
The NFIU Chief said although the guidelines would help to enforce the provisions of Sections 2 and 13 of MLPPA, 2022, against cash withdrawals from public accounts, establish clear audit trail, and mitigate corruption and other vices in public expenditure, they would also support law enforcement and the entire criminal justice system by strengthening transparency in investigation.
He said NFIU noticed in the course of its financial transactions analysis that civil servants were becoming more and more vulnerable to money laundering and its predicate offences due to their exposure to cash withdrawals from public accounts.
An analysis of transactions between 2015 and 2022 revealed that cash withdrawals by the Federal Government totaled about N225.72 billion, State Governments N701.54 billion, and Local Governments N156.76 billion.
The NFIU said cash withdrawals directly contravened the provisions of three laws, namely the MLPP Act, 2022 and the Proceeds of Crime (Recovery and Management) Act, 2022 (POCA, 2022), which provided the legal framework setting limitations on cash transactions and sanctions for infringement of the provisions.
Section 2 of the MLPPA, 2022, Tukur said, restricted cash payments in excess N5 million (or its equivalent) for individuals, and N10 million, or its equivalent for a body corporate.
Also, Section 19 of the MLPPA, 2022 imposes a fine of at least N10 million, or a term of imprisonment for at least three years (or both), for individuals, and a fine of N25 million for body corporate.
In addition, Section 26 of POCA, 2022 provides for the seizure and detention of cash over the prescribed amount under the law.
Most cash withdrawals from public accounts, the NFIU noted, were in excess of N5 million and N10 million respectively, which is prohibited and liable to imprisonment upon conviction.
“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,” Tukur said.
By the principles of Section 2 (Cash Transaction Outside Financial Institutions Limit), and Section 13 (Use Of New Products, Business Practices and New Technologies) of the MLPPA, 2022, the new guidelines prohibits cash withdrawals in order to mitigate the risk of exposure of public servants to these crimes and protect the financial system from continuous abuse.
Tukur said the breach on cash transactions is not only indicting chief accounting officers of government Ministries, Departments and Agencies (MDAs), but also in the context of Nigeria’s democracy, gives room for adversaries, political opponents and antagonists to exploit the law against their competitors, or to their individual political advantage.
The guideline, Tukur said would support the CBN cash withdrawal limit policy in line with the provisions of Section 2 of MLPPA, 2022.
Some exceptions to the guidelines, Tukur said, include that there was reason to compel a public official, whether at the federal, state and local government, to withdraw cash from any financial institution.
However, he said in the unlikely event that a public official needed to withdraw cash, such an official may apply for approval for waiver from the Presidency, to be granted on case-by-case basis.
Tukur said under no circumstance shall any public officer be given a standing or continuous waiver to withdraw cash from any public account in any financial institution or designated non-financial institution.
Under the guidelines, the local government N500,000 cash withdrawal limit from public accounts and instituted funds has been stopped, the CBN’s Regulation on cash withdrawal limit with regards to public accounts and instituted funds has also been set aside.
