Millionaire Bank Customers In Dilemma Over EFCC New Rule

As published in the Sept. 28, Issue 33. ULD by ol’Victor Ojelabi.

Until this past July, many commercial banks operating in the country had merely paid perfunctory attention to the demands of the Money Laundering (Prohibition) Act 2004 which require banking institutions to display notice in a conspicuous place directing the attention of customers and the general public to the dangers associated with money laundering and other financial crimes. And the display of notices in the banking hall to the effect that the bank is compelled to report any transaction above N1000,000 in the case of individuals and N5000,000 in the case of a corporate body to the Economic and Financial Crimes Commission[EFCC].

It would seem, however, that a new teeth has been given to the implementation of the demands of the 2004 Act which formally makes defined acts of money laundering a sanctionable offence, both to infracting customers and bank staff that may have hidden details of transactions from the EFCC as required by law.

Reports gathered from banking halls across the country indicated a rather confusing scenario between banks customers and staff that now insist on applying the procedures for filing money laundering returns for sums above the stated limits by customers.

A case that exemplifies the new zeal with which the banks’ staff apply the letters of the law is one that has caught the fancy of enforcement officers from the Economic and Financial Crimes Commission in Abuja.

According to an impeccable source in the Commission, a real estate agent had acted in his customary role as an intermediary in the sale and purchase of a property in the outskirt of Abuja, the Federal Capital Territory. The buyer, Fortune and Class Weekly source said, wrote a cheque for N25million to the real estate agent to cover the asking price of the property, the agent, in turn, deposited the cheque in his bank account so as to fund the account of the property owner after he would have deducted his commission.

Matters, however, got to a head when the agent got to the bank to and attempted to withdraw money from his account. Our source revealed that at this point, officials of the bank requested an interview with the agent and asked him the source of the cheque.

“The real estate agent explained his role in the property sell and buy transaction, thus asserting that the money belonged to the owner of the property that had sold it off through him.” Fortune and Class Weekly source said.

Complications over a seemingly simple banking transaction arose when the agent was asked to come along with the property owner who was expected to also explain how he came about funding the construction of the building and the property buyer that gave the cheque.

“Nobody had come forward till now,” Fortune and Class source revealed. “We are, however, working on the theory that the property owner and buyer may be civil servants or other individuals that may not be able to explain their sources of income or justify their income level to engage either in constructing or buying the house.” Fortune and Class source added.

Another instance of the new face of the implementation of the Money Laundering (Prohibition) Act 2004, was enacted recently at an Ikeja, Lagos State branch of GT Bank after a customer sauntered into the banking hall with intent at saving a sum of One million Naira cash in his account. Soon after he presented and his cash to the cashier and the money counted, hell was let loose when a shouting match ensued between the customer and the cashier.

The bone of contention was the insistence of the cashier that the customer would have to fill a form where part of the questions he would have to answer related to how he made the money he was depositing.

The angry customer had protested the absurdity of such question and continued to wonder aloud if he was not old enough to be able to make such money. Despite explanation by other staff of the bank, the customer was persuaded to fill the form as required.

A banking source confided to Fortune and Class that commercial banks may have become more adamant in demanding detailed explanations of sources of money to be deposited and, sometimes, to be withdrawn, as a result of a vow by the Chairman of the EFCC, Mrs Farida Waziri to check unprofessional conducts of some banks in cases of money laundering…”Since we sanitized the banks I thought that we have had respite but what is going on through the banks is so bad. Even some banks use the stock exchange to perpetrate so much corrupt deals. Corrupting the same system that made them who they are.” The EFCC Chairman had said while responding to remarks by the Director-General of the Inter Government Action Group Against Money Laundering in West Africa (GIABA) Dr. Abdullahi Shehu.

Such threats and others contained in various circulars from the CBN may be teaching bankers to become more alert and conscious to their roles as demanded by the Money Laundering Act. The CBN, had, in one of its circulars to commercial banks threatened to evoke the sanctions inherent in section6(9) of the Money Laundering Act 2004 and Section 44 (2) (d) of BOFIA 1991 as amended. The sanction for failure to comply with the provisions of the Act establishes a fine of N1000,000 for each day during which the offence continued for first offenders, while subsequent offences will also attract one-year suspension or a termination of appointment, as the case may be, in addition to prosecution under the law.