Apart from breaching South African laws, the Nigerian government violated a number of key anti-money laundering laws in its botched attempt to buy arms and military equipment from South Africa with $9.3 million cash stacked in suitcases.
Two Nigerians and an Israeli were arrested at the Lanseria Airport in South Africa on September 5, 2014 as they tried to enter the country with the cash conveyed in a private jet owned by the President of the Christian Association of Nigeria, CAN, Ayo Oritsejafor.
Nigerian officials said the suspects were carrying out a "legitimate" transaction to procure arms for the country's military, and that South Africa had been given receipts and documents to prove the authenticity of the deal. South African investigators have faulted the claims, and last week, obtained a court order freezing the money. The Nigerian government's explanation was "flawed and riddled with discrepancies", they said.
An analysis of the deal shows how the Nigerian authorities, in choosing to procure arms with a huge sum in cash, blatantly flouted two important laws enacted to combat money laundering.
Section 2 of the Money Laundering (Prohibition) Act, 2011 clearly pegged the cash transfer allowed into a foreign country at $10,000 or its equivalent. The law stipulates that any cash transfer exceeding that limit must be reported to the central Bank of Nigeria, CBN, the Security and Exchange Commission, or the Economic Financial Crime Commission,EFCC within 7 days from the date of the transaction.
The law also requires transportation of cash exceeding the limit be declared to the Nigerian Customs Service.
Section 2 (5) of the act states that anyone caught flouting the law by failing to declare such transfer or making a false declaration could risk being jailed for up to two years as well paying a fine of up to 25 percent of the undeclared or falsely declared fund upon conviction.
Similarly, Section 12 (b) of the Foreign Exchange (Monitoring Miscellaneous Provision) Act stipulates that
"foreign currency in excess of US $5,000 or its equivalent, whether being imported into or exported out of Nigeria, shall be declared on the prescribed form for reasons of statistics only."
Further, Section 25 of the same law requires any international cash transfer exceeding $10,000 or its equivalent to be reported to the Central Bank.
Lawyers and civil society activists have come down hard on the government for claiming ownership of the money which they say was taken out of the country in a manner that suggests reasons other than the purchase of arms. They say shipping the money out of the country is in wanton violation of its own laws and that the government is making a mockery of its anti-money laundering policy.
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| President Jonathan & Pastor Oritsejafor |
"This is clearly a very bad example of how to make policy and break them at the end," said Monday Ubani, the Chairman of Ikeja branch of Nigeria Bar Association.
Mr. Ubani says the fact that related government agencies are avoiding claiming responsibility for the money is sign that the money could not have been meant for something legitimate contrary to the government's claim.
"Even if you want to buy arms and ammunition there are still procedures and processes. This was shrouded in secrecy. As I speak to you, no agency has claimed responsibility of knowing how this amount of money was sent abroad for purchase of arm and ammunition," he said.
Mr. Ubani said the ease with which the money was taken out of the country suggests that the process had been tried before and could well be the method stolen money is taken out of the country.
"This is an example of how the money that should be used to better the lives of Nigerians is being stolen and shipped away. What other example can you ask for? This is a clear indication of how our money is being stolen by those in authorities."
In a similar vein, a rights activist, Shehu Sani, said the matter should not be treated with kid gloves. He added that the explanation proffered by the government lacks credibility and called on the National Assembly to immediately commence an investigation as to how the money was taken out of country and what it was really meant for.
"This is very serious issue that needs to be investigated. The explanation given by the government doesn't hold water. It doesn't make any sense. There is nowhere in the world where such huge sum of money is moved in an airplane for the purpose of a legitimate business," he said.
"There are three issues: The first being that whose money is it and who made the payment? Is it the Ministry of Defence, the Police or it is the Presidency? Secondly is that, was the money appropriated by the National assembly? And thirdly, the manner the money is being shipped out is a clear violation of the money laundering act. I think these are issues that need to be investigated by the National assembly," he added.
Also Lagos-based lawyer, Jiti Ogunye, said the government's account is a slap in the face of the country's anti-money laundering laws. He said the government's explanation is faulty. According to him if the government was carrying out a legitimate business it need not do it in a clandestine manner. He added that the botched South African deal has all the markings of money laundering.
"This act has happened in clear violation of all our laws governing international business transactions.
"If you are going to buy arms for the fight against Boko Haram, the fight against Boko haram is not a hidden thing. It is something that the AU is supporting. It is something thatECOWAS is supporting; it is a fight that the international committee is supporting so why would you do it in a clandestine manner. Why can't you wire the money through government channels? The fact that they are offering this jejune and absurd explanation in support of the gross violation of our laws is despicable.
"This is a clear case of money laundering perpetrated by people inside the Federal government of Nigeria and so people have to be held accountable."
He said the national Assembly should prevail on the President Goodluck Jonathan to hand over those responsible for the transaction. He said if the president fails to do this, he should be held responsible and impeachment proceeding should be initiated against him.
Two Nigerians and an Israeli were traveling with the plane’s crew at the time the cash, which was not declared, was found on the plane. South African security and Nigeria have launched an investigation into what transpired.
The explanation from Nigeria that the money was meant for arms purchase for the Nigeria intelligence agencies, has been rejected by South Africa’s Asset Forfeiture Unit (AFU) and the National Prosecuting Authority of South Africa (NPA).
The NPA, in a statement, according to online publication Premium Times, said the manner in which the money was brought into the country breached the laws that deal with the transfer of foreign exchange of such proportion. “The money was initially detained by the South African Revenue Service (SARS) as it was not disclosed or declared at customs, and was above the prescribed legal limit for the amount of cash that may be brought into the country,” it said in a statement.
The NPA, according to the medium, said its investigation showed that Tier One Services Group, the firm the Nigerian government claimed it wanted to procure the arms from, is not authorised to sell or rent military hardware.
“In court papers, the NPA submitted evidence that Tier One is not registered with the National Conventional Arms Control Committee and is thus not authorised to enter into any agreements regarding the sale and/or rental of military equipment,” the statement read.
Tier One has apparently issued an invoice to a Cyprus based company, ESD International Group Ltd, ESD, in respect of the procurement of armaments and helicopters to be delivered to Nigeria. However, South African investigators said the time when the invoice was prepared and the time the money was brought in threw up some serious issues of its true intent.
The money was ferried to South Africa less than a week from the date the invoice was prepared (September 8, 2014). The involvement of a Cyprus based company also heightens the suspicion that this may be a case of classical money laundering. Cyprus is known for its secretive banking system.
The NPA added that the transaction did not follow normal procedure in the procurement of the kind of equipment it was alleged to have been meant for.
The Nigerian Senate Thursday summoned National Security Adviser (NSA) Col. Sambo Dasuki (rtd), Chief of Defence Staff, Air Chief Marshall Alex Badeh and Chief of Army Staff Lt.-Gen. Kenneth Minimah over the smuggled $9.3 million cash. Chairman, Senate Committee on Defence, Senator George Sekibo, said those invited to appear before his committee on Tuesday would brief members on the incident.
He said: “ I don’t want to pre-empt issues because I have not heard details about the issue but they will be here on Tuesday.”
On the soldiers sentenced to death, Sekibo said he was not surprised that death sentence was passed on the 12 soldiers because before they joined military, they were aware of the implication of being involved in mutiny. He added that before the judgment was passed, the army must have carried out their investigation on the matter.
Excerpts taken from Premium TIMES
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