Buhari’s heavy burden and a case for an asset repatriation programme

President Buhari’s attempt to fulfil his campaign promise of curbing corruption should be commended. However, much is required to be done for this not to end up in rhetoric. Far too much of Nigeria’s money earned over several decades have been wasted in the runnels of corruption and lost in many foreign bank accounts, Nigerians are still sharply divided on what the government should do regarding previous regimes; not as if Nigerians agree on much when it comes to making hard choices in relation to the country’s future. What is not sharply disputed is that it is not in the country’s interest to continue with business as usual; oil prices have crashed dangerously low for Nigeria’s financial health; there has been a huge capital flight from the country’s bourse; unpleasant news emanating from its top financier – China and the after effects of the political transition all present as serious economic landmines.

The president, for the benefit of the country’s economic wellbeing, may have to spend a chunk of his political capital by proceeding on a different footing. As laudable and salutary as the president’s current efforts to recover stolen funds and punish those found guilty are, the outcome may be aided if the country adopts a pragmatic approach of implementing an asset repatriation programme; in politics as in sport, the rules affect the tactics. There is a possibility of achieving success for less with the implementation of a credible programme. Tracing the assets of corrupt public officials will entail widespread international investigations and cross-border litigations and these are reputably expensive. Achieving tangible results by means of investigations and litigations may not happen in the life of this presidency even if it runs its full constitutional eight-year period.

Programmes of this nature are not novel; they have been implemented with varying degrees of success in the United Kingdom, Bangladesh, Indonesia and Malaysia, amongst others.   Implementation of such a programme is also an opportunity for Nigeria to revisit its statutory provisions in relation to the prosecution of corrupt public officials; the current level of prosecution of corrupt public officials is ridiculously low suggesting an illicit hand-in-glove relationship between the police, the Bar and the Bench. Nigeria should draw a line underneath this national shame; it tarnishes us and keeps investors away.

Assets repatriation programmes have assumed global recognition; the Financial Action Task Force (FATF) in June 2010 published a best practice guide for managing Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT). The FATF agreed four basic principles which can be summarised below:

(a) Effective application of AML/CFT measures as a prerequisite for implementation of voluntary tax or asset repatriation programme.

(b) Compliance with AML/CTF requirements should admit of no partial or full exemption otherwise the programme would be in breach of FATF recommendations.

(c) All relevant domestic agencies such as the Police, Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC) and the National Intelligence Agency (NIA) should co-operate, co-ordinate and exchange information to guide against an abuse of the programme as much as possible.

(d) There should be a wide range of mutual legal assistance and exchange of information in money laundering and terrorist finance investigations, prosecution and proceedings.

The strongest case for President Buhari is to encourage voluntary repatriation of stolen funds within strict statutory timeframes in return for guaranteed amnesty.  According to the Financial Times, “Finding and returning assets held in secret corporate structures in multiple jurisdictions is a lengthy and arduous process that is fraught with legal complications.”

The implementation of an asset repatriation programme is not without risks; for a start, it may not be a substitute for the deterrence that investigation and conviction can bring about. There may be a poor response to the programme with little or insignificant recoveries. Recent developments such as the anticipated cooperation of the United States in sharing data with Nigeria in relation to stolen funds could compel participation in the programme. The implementation of an assets repatriation programme would be a fair trade-off in the face of the many obstacles and expenses associated with the tracing and recovery of stolen assets. The specific reference for Nigeria should be tailored towards the following goals: (i) Bridging the shortfall in the country’s revenue stream; (ii) Encouraging the return of stolen public funds into the country; (iii) Strict punishment for those failing to take advantage of the programme with penal finesand custodial consequences; (iv) A one-off amnesty to those taking full advantage of the programme; (v) Reduction of the amount of stolen funds lost to other jurisdictions; (vi) Review of the regulatory and statutory provisions in relation to stolen public funds; (vii) Targeted and negotiated application of the returned assets into core infrastructure projects.

The Stolen Asset Recovery Initiative (Star) in Washington estimated that up to $40bn is lost each year to developing countries through corruption and only $5bn was returned in the 15 years till 2011. Most is never found.

According to Tuckey L.J in Abacha v Sec of State for the Home Department [2001] EWHC Admin 787, “It is alleged that during his [Abacha] rule he stole more than US$4b of the State’s money.” Regrettably, only about $1bn of this amount has been reportedly recovered to date (Switzerland $885m; Liechtenstein €1667m and about $489m frozen in the United States). Nigeria reportedly paid over $28m in legal fees to Swiss lawyers. Notably, no amount has been recovered in the UK, according to Enrico Monfrini, the Swiss lawyer who acted for the Federal Government against the Abachas. Nigeria also paid hefty fees in other jurisdictions in its many attempts at tracing and recovering the Abacha loot. The prosecution of James Ibori in the UK, according to Musdapher CJN (Rtd), was at a cost of £14m to British taxpayers – it is doubtful if that expense was passed on to the British taxpayer, part if not all the expenses involved would have come out of the amount recovered from the former Delta State governor.

An encouraging development for President Buhari is the wider global ambit for cooperation in tracing stolen and hidden assets. With the knowledge that assets can be traced more easily even in tax havens, there is an heightened expectation that those with hidden funds abroad will be encouraged to take advantage of the opportunity offered by the proposed assets repatriation programme provided the threat of penal measures is real and available for errant persons. The  Group of Eight, otherwise known as The G8 (an assembly of the leaders of the industrialised countries of Canada, France, Germany, Italy, Japan, Russia, UK and US)  have agreed measures to address the opacity associated with offshore tax havens. Agreements have been reached on matters ranging from sharing access to information on their residents’ tax affairs and forcing shell companies to identify their real owners.

A starting point would be for the government to join in global efforts by governments to share data in order to combat illegal evasion of taxes. The current romance of the G8 countries with President Buhari provides a good opportunity for Nigeria to include as one of its top priorities a request for the sharing of data with the member countries of the G8.

The UK in 2012, in an ambitious move to raise about £3bn from lost tax revenues, enacted the Liechtenstein Disclosure Facility (LDF) to enable British taxpayers to obtain generous settlement and guaranteed immunity from prosecution in respect of tax-related offences for incomes routed through the Principality of Liechtenstein. Different sources have confirmed that between £0.8m and £1bn has been raised so far.

Indonesia earlier this year mooted a tax amnesty with a projected recovery of $7.5bn. The objective of the tax amnesty included alleviating Jarkarta’s budget deficit by increasing tax revenues; improving tax compliance and inducing the repatriation of capital from overseas.

President Buhari has to move swiftly now as the likely culprits will not offer themselves as sitting ducks for the government’s capture. There has been too much talk already on the recovery of stolen funds; we should not mistake activity for productivity.

Laitan Eyiowuawi