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Recovering the Proceeds of Crime – Briefing Note 2019/2020

Most crime is committed for profit. Asset deprivation attacks criminality through this profit motive. In the same way that starving a thriving small business of capital hampers its growth, removing assets from criminal enterprises can also disrupt their activities. Removing unlawful assets also:

• Underpins confidence in a fair and effective criminal justice system and shows that nobody is above the law;
• Removes the influence of negative role models from communities;
• Deters people from crime by reducing the anticipated returns;
• Provides a powerful disincentive to commit crime in the first instance;
• Prevents reinvestment in criminal activity; and
• Disrupts organised criminal activity.

Efforts to recover the proceeds of crime in Nigeria have been less than successful for a number of reasons, that include-

• Weak and simplistic enabling legislation – for instance, requiring a prosecutor to prove (to a criminal standard of proof) that asset are, directly or indirectly, the proceeds of crime, etc.;
• Management of seized assets being left in the hands of ill-equipped law enforcement agencies (LEAs), resulting in some assets becoming dilapidated or otherwise spoiled. Cash has also been poorly accounted for, lost dissipated, or to some extent, probably unlawfully removed (recovered money is outside the government budget and thus is relatively easy to ‘lose’);
• Asset forfeiture (if applied at all) being often viewed as an unnecessary adjunct to the main proceedings and defendants have been allowed to bargain the return of assets for lower sentences;
• Asset recovery not being seen as ‘core business’ for law enforcement and thus it is a very low priority. It is poorly resourced and despite there being some asset recovery legislation it is rarely applied;
• Financial investigation training being entirely absent;
• Investigatory powers that are not subject to judicial oversight, thus compromising the Constitutional right to privacy;
• Interference by politically exposed persons in the asset recovery regime and associated corrupt activity; and
• The nature of the Nigerian financial system and the lack of tools to deal with a cash based economy;
• LEAs that are extremely parochial and unwilling to accept change.

The Legislative Solutions

Any attempt to correct the current situation will fail without new legislation and the status quo cannot be allowed to continue. Tinkering around the edges of existing legislation will just not provide a successful solution and The Proceeds of Crimes Act (POCA) was seen as a comprehensive, modern and internationally acceptable Act providing for:

• The formation of the Proceeds of Crimes Recovery and Management Agency that is fundamental to the functioning of the asset recovery strategy;
• Comprehensive management, security and realisation of recovered assets;
• Confiscation of assets to a value estimated to be the total income from criminal activity;
• Civil based recovery of criminally tainted assets;
• Forfeiture of assets directly related to criminal activity;
• Forfeiture of instrumentalities of crime;
• Seizure and deprivation of criminally tainted cash being exported or imported to or from Nigeria;
• A standard of proof that is applicable in civil matters throughout the Act; and
• Comprehensive tools for discovering the whereabouts of the proceeds of crime.

All of which are subject to oversight to ensure that the Constitutional Rights of the citizen are at the forefront of the legislation.

POCB has been in development since 2011. It was initially born out of a desire to modenise the existing asset recovery legislation that was contained in the enabling legislation of various LEAs and to safeguard assets that were being recovered. There is no doubt that some recovered assets were being misused, re-stolen, lost or otherwise misused. Additionally the value of seized assets was being diminished by lack of care. Subsequent, to those initial reasons, POCB was seen as one of the vital conditions to secure Nigeria’s full membership of the Financial Action Task Force. Huge efforts were made to try and achieve this honour in 2014/15 but all of the work and the campaigning was ultimately frustrated by some LEAs and by other parties, all of whom who were entirely antagonistic towards the legislation for reasons of self-interest or self-preservation.

The POCB, as originally conceptualized, has been altered and rewritten many times and the latest version of it was recently refused presidential assent. This is seen as an opportunity to revisit the legislation, hopefully, for the last time, in order to correct some faults and to assuage as many concerns as possible. Additionally it will allow for some items to be added that have become necessary, as international requirements have been promulgated. Nigeria has to be committed to all such requirements if there is a desire to achieve full membership of the FATF with all of its attendant advantages.

The Proceeds of Crimes (Recovery and Management) Bill  2020 focuses on some key areas of non-conviction based asset recovery (NCBAR) through the creation of the Proceeds of Crimes Recovery and Management Agency (the ‘Agency’). 

So-called civil recovery of the proceeds of crime is both complex and time consuming and should not be left to LEAs whose focus should be elsewhere concentrating on the detection and prosecution of offenders and not on non-core functions. The most effective means of ensuring success is seen as being the provision of a Centre of Excellence that fully focuses on the discipline of NCBAR and it is the Agency to provide the lead in the civil recovery process with the assistance of seconded LEA officers working with specialist lawyers and all of the facilities that the Agency can offer.

The other remit of the Agency is to safely and securely recover the proceeds of crimes, to realise the worth of these proceeds following court proceedings and ensure that they are made available to Nigeria through a Confiscated and forfeited Properties Account.

There are no powers within this legislation to prosecute, although it does create powers to stem the flow of cash leaving the country by way of a civil process and there are some offences of non-compliance. It is not a LEA and it is certainly not an anti-corruption agency in an established sense. It is concerned with preventing corruption and its raison d’etre is to be the focal point for recovering the proceeds of such activities and indeed for all acquisitive crime for the good of Nigeria.

The Proceeds of Crime  Bill is designed to enhance the recovery of the proceeds of crime following a successful conviction for acquisitive crime. It includes elements of existing powers of forfeiture of items identified to be the direct proceeds of crime or crimes and instruments used to commit such crimes. It replaces existing powers in the various enabling Acts of LEAs. The vital difference between existing powers and those promoted in the new Bill is the standard of proof required. In existing legislation the standard of proof required in forfeiture is that which pertains to criminal proceedings, whilst under the proposed Bill the standard of proof is the much lower standard that applies in civil proceedings. More importantly the Bill introduces the concept of criminal confiscation of a sum of money equal to a convicted person’s total proceeds of the crime for which they have been convicted together with associated offences, again with the civil standard of proof and the defendant has to demonstrate that his or her wealth is not derived from criminality. This is so much more powerful than any existing legislation.

Naturally, as before, there are a number of oversights in the legislation to ensure constitutional rights, none more so than in the tools used to breach an individual’s right to privacy. The tools, which comprise various orders, some of which reflect existing provisions and some of which are new are all subject to judicial oversight to ensure that the breach is proportionate and commensurate with the Constitution. All of these powers are granted to LEAs. The only condition being that prosecutors and investigators who wish to avail themselves of the powers be authorised by the Agency by completing a training programme to ensure that the rules are followed.

Finally neither Bill seeks to remove any power from any LEA to do their work; rather they seek to enhance their powers whilst being cognisant of the Constitution. They seek to maximise the recovery of the proceeds of crime and in doing so deter others from crime by showing that all will be done to show that crime does not pay.