EFCC boss: Real estate developers aid money laundering

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Economic and Financial Crimes Commission, EFCC, said it would henceforth, focus its attention on real estate developers, alleging that they provide safe haven for the laundering of proceeds of crime.

The Executive Chairman of the EFCC, Mr. Abdulrasheed Bawa, made the disclosure at the opening session of a National Awareness Training Workshop on Enhancing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT), organised by the Inter-Governmental Action Group Against Money Laundering in West Africa, GIABA.

Bawa, who was represented by his Chief of Staff, Mrs. Hadiza Zubairu, in his speech, said the Commission has already developed a software through which citizens could file petitions against suspicious property owners in the country.

He said the App, which was designed by a staff member of the commission, has so far, recorded 13million downloads.

According to him, the App was developed to expose corruption in the real estate sector, especially after the EFCC understood that it may be difficult for some people to approach it to report cases of corruption in the sector.

“Globally we have had very useful and actionable intelligence coming out of the Application”, Bawa added.

He said: “As some of you may be aware, just last year July, the EFCC launched an application called the Eagle Eye App. It is an App that is designed to ease the process of reporting economic and financial crimes.

“It was also designed to break the flow of illicit funds into the real estate sector by making it easy for citizens to report properties suspected to be proceeds of corruption in the country.

“Over the years, the Commission’s investigation identified the real estate sector as a haven for laundering of proceeds of illicit activities by corrupt elements.

“This was further substantiated by the outcome of the national risk assessment that was carried out in 2016, which brands the Nigerian real estate sector as the second most vulnerable sector.

“Already, we have some insights regarding the vulnerability of this sector and that tells us that we have a lot of work to do.

“The Nigeria real estate sector is fraught with many illegal practices, mainly from Abuja, Port Harcourt, Lagos and Kano, properties are purchased in cash and often in foreign currencies with no questions asked.

“Today, if I have N100 million that I want to spend, I can spend that money to buy property and no one will ask questions and nobody will know beneficiaries of such property. That is what we must change. The narrative must change”.

He further identified the lack of strict parameters for business practices, as well as poor compliance with reporting organizations, as some of the fact that make the tracing and unmasking of asset owners difficult.

“It is because of some of these factors that the EFCC has decided to focus on the real estate sector. Indeed the Commission has tried to tackle some of them, by engaging various stakeholders in the sector through the SCUMU, such as members of the Real Estate Developers Association, Nigeria Institute of Surveyors, the Federal Ministry of Works and Housing, and others, both at the national and sub national level.

“The Commission has also strengthened the capacity of SCUMU to effectively discharge its responsibility, especially in enforcing compliance from the reporting organizations. This is an addition to the continuous seizure and forfeiture of illegally acquired properties”, the EFCC boss added

He urged other West African countries facing similar challenges to emulate the EFCC model.

“Even though capacity of transactions in the sector remains a real challenge, there is need to explore the possibility of having a register of beneficiary owners of real estate properties in our respective countries.

“I believe such measure will go a long way in unveiling the secrecy around real estate investment in the region”, Bawa stated.

Meanwhile, in his opening remarks, the Director General of GIABA, Mr. Aba Kimelabalou, commended President Muhammadu Buhari for his commitment toward the implementation of AML/CFT measures in the country.

He noted that the outcome of a study that was conducted by GIABA, showed that the real estate was one of the sectors vulnerable to money laundering and terrorist financing.

“This finding is re-echoed by the National Risk Assessment of the Nigeria which ranks the real estate sector as the 2nd most vulnerable to ML risk (medium-high) in the country.

“The 2nd round of Mutual Evaluation Report (MER) of Nigeria highlighted critical vulnerabilities which expose the real estate sector to ML/TF risk.

“In particular, the MER noted the limited understanding of ML/TF risk and AML/CFT obligations, lack of AML/CFT policies; weak due diligence, the preponderant use of cash to finance real estate transactions, and general weak supervision and monitoring of industry players, as some of the factors that make the real estate sector attractive for potential misuse by money launderers.

“Thus, as it stands today, the real estate sector, and indeed all DNFBPs constitute a weak link in the implementation of AML/CFT measures in the country.

“This has adverse implications not only on national AML/CFT regime, but regional efforts in combating money laundering and terrorist financing”, he added.