The Interim Order of Hon. Justice Nnamdi Dimgba of the Federal High Court, Abuja made on 17th October, 2017 directing 19 money deposit or commercial banks in the country to, amongst other directives, freeze and disclose accounts and funds without BVN has generated intense debate and this is quite understandable.
The originating ex-parte application was brought by the Hon. Attorney-General of the Federation (AGF) seeking f or several orders, the ultimate or summary of which was a forfeiture of all non-BVN compliant accounts/funds in the 19 banks.
The 19 banks now have up to 14 days from the date of the order to show cause why funds in the non-BVN compliant accounts should not be forfeited to the public (government).
As noted earlier, the ultimate order of forfeiture granted by the Court, although interim at this time, has raised some concerns and hence the ongoing debate.
Ordinarily, the implication of what the government seeks to do by the forfeiture order amounts to EXPROPRIATION (force acquisition) of private property and this is ordinarily against the provision of section 44 of the 1999 Constitution (amended in 2011).
A private property is any property, personal or real, belonging to persons, natural or artificial, other than governments (public) or other institutions of government. While the forfeiture order under reference is primarily targeted, even without stating it, at private funds/accounts in the banks, It must be pointed out however, that the order also covers funds belonging to governments or institutions of government.
However, like every other rights guaranteed under Chapter IV of the 1999 Constitution, the right against compulsory acquisition of private property (please note that bank accounts/funds/assets in banks are form of property in law) under section 44 is NOT ABSOLUTE and, in fact, subject to several limitations or exceptions under the same section. In other words, the Constitution recognises several instances where private property may be compulsorily acquired by government, following the due process of law essentially resident in the courts.
To be sure, section 44 (2)(b) of the 1999 Constitution specifically permits compulsory acquisition of private property “for the imposition of penalties or forfeiture for breach of any law, whether under civil process or after conviction for an offence.”
Now, the Bank Verification Number (BVN) enrolment process originally launched in 2014 is a financial/monetary regulatory policy made pursuant to the powers conferred on the Central Bank of Nigeria (CBN), by Sections 2 (d) and 47 (2), of the CBN Act, 2007, to promote and facilitate the development of efficient and effective payments systems for the settlement of transactions, and to combat fraud or corruption in the Nigerian financial systems.
The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks. The BVN Guidelines of the CBN therefore qualify as a subsidiary legislation with full force of law in Nigeria. The implication of this status of the Guidelines is that non-compliance with them will amout to breach of law and may then attract the type of penalties including sanctions and forfeiture permitted under section 44 of the Constitution.
Furthermore, the BVN enrolment is part of the overall global as well as municipal strategy of government at fighting corruption (money laundering), terrorism and ensuring effectiveness of the extant ‘Know Your Customer (KYC)’ requirement mandated upon financial and non-financial institutions by section 3 of the Money Laundering (Prohibition) Act, 2011 (MLA 2011) (amended in 2012).
The KYC principle under the MLA 201 imposes basic standard requirement of verification of customers’ identity on all financial and non-financial institutions in Nigeria prior to commencement of any finacial relationship with their customers.
This is basically to ensure that whoever owns or does what within the financial system can be identified and held responsible at all times.
The CBN, the office of the AGF through the EFCC/ICPC, and the Nigerian Financial Intelligence Unit (NFIU) are some of the institutions of government responsible for ensuring compliance with the CBN Act 2007 and the MLA 2011 amongst others.
Meanwhile, the BVN Policy of the CBN, though originally lauched in 2014, gained strong impetus for enforcement under the current administration since 2015. It was well publicised and executed over a long period of time to accomodate all. Indeed, convinient windows of enrolment were also opened to Nigerians in diaspora.
It is therefore difficult to rationslise why there are still non-BVN compliant accounts in the Nigerian banks up till this time. This is no doubt disturbing and raises suspicions about the status and integrity of the accounts and their holders. It also questions the credibility of affected financial institutions with respect to compliance with due enforcement of laws of the land.
Nevetheless, it does not also mean and should not mean that ALL such accounts are fraudulent or have legitimacy issues. There will certainly be accounts of disputed estates or transactions or, worse, non-chalant persons or insignificant balances. Even at that, the banks are obligated under the MLA 2011 to use their KYC data to call upon the holders or successors to such “abandoned” accounts to do the needful (BVN) and claim “their” funds.
However, whatever the legitimacy status of the non-BVN compliant accounts or holders, the government of Nigeria, like every responsible governments anywhere, has a responsibility to regulate her financial sector and ensure due compliance with the laws of Nigeria in that respect.
The government does have a responsibility to ensure there are no “lush funds” of her monetary units (Naira & Kobo) or even forex within her financial system, lurking anywhere “unclaimed”. It is therefore in the foregoing context that i am of the strong view that the AGF is very much in order at this time.
His action finds strong support under section 44 of the Constitution; the CBN Act 2007 as well as the MLA 2011. The Court was therefore right in making the orders as prayed. It is after all an INTERIM ORDER which is now open to the banks to show cause why a permanent order of forfeiture should not be made by the Court after 14 days. Indeed, individual persons, natural or artificial, also have the right to approach the court to show cause as interested persons.
In all that has happened so far therefore, i see no illegality or breach of any law of Nigeria either by the AGF or the Court.
To be sure, non-compliance with the BVN Guidelines is a breach of the law and should attract attendant sanctions within the confines of due process of law.
M A Lateef Esq is a lecturer at the Obafemi Awolowo University Ile-Ife