- Introduction
Financial crime laws typically revolve around the trinity issues of money laundering, treatment of proceeds of crime, and criminalization of terrorist financing. The inclusion of treatment of proceeds of crime is premised mainly on the idea that criminal elements should not be allowed to benefit from their crimes.
Yet, the UN estimates that $2 trillion in proceeds from crime are laundered into the legitimate economy every year. That is $2 trillion globally of ill-gotten wealth “washed and cleaned” into off-shore accounts, choice properties, and other possessions. The problem is broad and entrenched enough to have been attracting more scrutiny from governments, and law enforcement in recent years.
In Nigeria, these trinity issues greatly impact the political and economic life of citizens. After years of domestic and international pressure, however, the final passage of a Proceeds of Crime Bill into law is broaching renewed hope for curbing this problem.
2. Brief Overview
Enacted on the 17th of May 2022, the Proceeds of Crime (Recovery and Management) Act of 2022 (POCA) forms part of the new anti-money laundering and counter-terrorism financing/proliferation laws in Nigeria. POCA provides for the legal and institutional framework to target, manage, and recover proceeds of crime within and outside the country.
The Act is divided into twelve parts (I-XII) covering a wide range of matters relevant to Nigerian law on proceeds of crime issues. Part II (s. 3–5) establishes a Proceeds of Crime (Management) Directorate for the purpose of enforcing and administering the provisions of the act. The Directorate is to be formed within relevant existing statutory organizations and must cooperate with other government entities in the performance of its duties.[i]
There are also broad provisions guiding the civil recovery of proceeds of crime through preservation, forfeiture, and confiscation orders (Part IV, V, & VI); the powers of investigation, seizure, and administration of suspected proceeds of crime (Part VII & VIII); and the creation and administration of a Confiscated and Forfeited Properties Account (Part IX).
3. Key introductions
Some of the key introductions of the Act are;
- The Proceeds of Crime (Management) Directorate: The Act establishes the directorate to enforce the provisions of the Act and recover the total benefit of proceeds arising out of unlawful activity. The Directorate is designed as an establishment in relevant existing statutory and government agencies[ii]. The directorate also has the power to make recoveries without a corresponding or preceding order of conviction.[iii]
- Special Courts: The Act empowers Heads of Court in Nigeria to designate special Courts to hear and determine cases involving proceeds of crime. The Act also provides general provisions relating to legal proceedings in these courts (Part XI). To recover the total benefit of unlawful activities, the Courts are further empowered to grant special orders under the Act, including;
- A Preservation Order, granted ex parte, allows the directorate to“ seize and hold” property reasonably suspected to derive from unlawful activities or any instrumentality or unclaimed property used thereto.[iv]
- A Forfeiture order, subject to a conviction obtained in respect of property reasonably suspected to be proceeds of unlawful activity.[v]
- A Confiscation Order, requiring a person to pay to the Directorate for deposit into the Confiscated and Forfeited Properties Account, an amount equal to the total proceeds of the person’s criminal activities.
- The Confiscated and Forfeited Properties Account: This is a specially designated account domiciled at the Central Bank of Nigeria. The account is designed as the government’s repository for monies and proceeds realized from the seizure, management, and disposal of assets forfeited under the Act.
4. Conclusion
The Act’s comprehensive provisions for the seizure, confiscation, forfeiture, and management of property or assets derived from unlawful activities portend a new frontier in the fight against money laundering and other forms of unlawful financial activity.
Endnotes
[i] Part III, s.6 (1)&(2) of the Proceeds of Crime (Recovery and Management) Act 2022.
[ii] Per the Act, this includes but is not limited to Nigerian Customs Service, National Drug Law, Enforcement Agency, Nigerian Police Force, or Nigerian Immigration Service.
[iii] Part IV of the Act.
[iv] Section 9(1).
[v] Section 19.
