•Widen law on proceeds of crime, acquired proxy property •Creates National Confiscated Wallet for virtual assets •False whistleblower risks two years jail term, N2m fine or both
ONGOING efforts by the Federal Government to strengthen the nation’s anti-corruption have received further legislative backing with the passage of a bill that seeks to protect whistleblowers, as well as widening the extant legislation on forfeiture of suspected assets and assets acquired by proxy.
The legislative framework, which passed through the mandatory Third Reading during last Thursday’s plenary, followed the adoption of the report of the House’s Committee on Financial Crime on the bill, which proposed amendments to the Proceeds of Crime (Recovery and Management) Act, No. 92, 2022 and other matters.
The bill, with 24 clauses, in Clause two, seeks to amend Section 1(c) of the existing law with a new provision, which “makes provisions for non-conviction-based forfeiture procedure for the recovery of properties reasonably suspected to be proceeds of crime or unlawful activity;” and insert a new paragraph “(h) to provide legal framework for whistleblowing, witness protection and connected matters.”
The House introduced Clause five to amend the existing Section nine, which stipulates that: “An interim order or a preservation order shall be granted by the court to preserve property reasonably suspected to have been derived from unlawful activities and represents instrumentality of unlawful activity or unclaimed property.”
In section five (two), “the amendment states that, relevant organisation may, by an ex-parte application, apply to the court for an interim forfeiture or preservation order, where there are reasonable grounds that the property concerned -(a) represents the proceeds of unlawful activity, whether they are – (i) in the hands of the person who unlawfully acquired the property in the first instance, or (ii) traced to any person to whom the property that represents the proceeds have been passed;
- (a) is involved in the facilitation of unlawful activity; or
- (b) is intended to be used to facilitate unlawful activity.”
The House also approved in Section nine(four) that:
“Where further property has been acquired as a result of profits accruing from the proceeds of unlawful activity, that further property shall be treated as the proceeds of unlawful activity.”
The new law empowers the court making a preservation order to, at the same time, make any other ancillary orders it considers appropriate “for the proper, fair, equitable and effective execution of the interim forfeiture or preservation order.”
The proposed law equally stipulates that: “The court in making interim forfeiture or preservation order, shall direct the relevant organisation to publish same in any widely circulating national newspaper to notify any interested party of the order.”
According to the proposed law, any person, who has an interest in the property subject of interim forfeiture or preservation order shall, within 14 days of the publication referred to, file his notice of intention to show cause.
It states that upon the receipt of the notice of intention to show cause, the relevant organisation shall, within seven days, file and serve its motion for final forfeiture of the said property.
The amendment empowers any interested party to, upon the receipt of the motion for final forfeiture, file and serve its counter affidavit within five days. The party shall then be entitled to a reply within three days, while the court shall thereafter hear and determine the application with dispatch.
The proposed law states that the absence of a person whose interest in a property that may be affected by a forfeiture order shall not prevent the court from making an order.
To preserve the value of a forfeited property, the amendment guarantees in the amended Section 13 which deals with the “Disposal of property subject to Preservation order,” that: “Where there are reasonable grounds to believe that a property, which is subject to a preservation order, an interim forfeiture may have its value diminished, or be disposed of, destroyed, or damaged, removed contrary to the order or may deteriorate in terms of quality or utility, the relevant organisation shall promptly apply to the Court ex-parte for an order to sell the property at the prevailing market value.”
It permits the relevant organisation to deposit the proceeds from the sale of any property under forfeiture in a designated account opened for that purpose.
The amendment also allows the relevant organisation to appoint an asset manager where a forfeiture order has been made and that the manager is allowed to administer the property and take any act necessary.
The bill provides that the Federal Government shall have and exercise all rights of ownership in every forfeited property without let or hindrance.
In the case of a joint ownership of a suspected property, the bill in Clause 13 also amended Section 25(1) to provide that: “Where a person has an interest in property, as a joint owner, his death after an interim forfeiture or preservation order is made in respect of the interest does not, while the order is in force, operate to vest the interest in the surviving joint owner or owners, and the preservation order shall continue to apply to the interest, as if the person had not died.”
In Section 80 of the bill, which focuses on whistleblower protection, the bill provides that: “The provision of this Part is to encourage and facilitate whistleblowing, provide legal framework for reporting credible information that will lead to the recovery of properties reasonably suspected to be proceeds of unlawful activity or abandoned properties or properties representing instrumentalities of offence, provide for the protection of whistleblowers; and connected matters.”
It states that where the whistleblower’s information is found credible, the relevant organisation shall proceed to recover the suspected proceeds of unlawful activity or properties.
However, Section 80(d) of the bill states that where the information is found to be false and knowingly so supplied by the whistleblower, the whistleblower shall be guilty of an offense, and shall upon conviction, be liable to a term of imprisonment of two years or a fine of N2million, or both.
Besides, the bill mandates the relevant organisation to protect, secure and resettle, where necessary, whistleblowers whose information led to the recovery of proceeds of unlawful activity or abandoned properties or properties representing instrumentalities of offence.
In line with legislative practice and convention, the bill is expected to be transmitted to the Senate for further legislative action.