One year after the landmark judgement was delivered by a Federal High Court in Abuja nullified the requirements to declare clients’ financial transactions to law enforcement agencies, many lawyers have continued to commend the decision of July 19, 2024.
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Legal circles had been uneasy since the repeal of the Special Control Unit Against Money Laundering (SCUML) in 2011 and the Anti-Money Laundering (Prohibition and Prevention) Act 2022, to include lawyers’ mandatory reporting of clients’ financial transactions as a way of checking money laundering.
A lawyer, Ebuka Nwaeze, who spoke to the media about the matter, said lawyers are no longer facing harassment over the failure to comply with the directive of SCUML.
He noted that the legal body have taken further steps toward implementing “a rule embodying self regulation on financial matters and a committee of lawyers is seeing to compliance to prevent money laundering and terrorism financing through lawyers.”
For his part, Hameed Ajibola Jimoh Esq said the judgement has been a good one for lawyers as they are no longer under pressure from external bodies, maintaining that, already, the Legal Practitioners Act regulates the conduct of lawyers as to what to do about their relationship with their clients.
“I assume that the judgement has not been appealed, so it is binding on all parties,” he said.
At the heat of the SCUML enforcement by the Economic and Financial Crimes Commission (EFCC) through the banks, lawyers took turns at workshops or conferences, to debate the propriety of the provision and its impediment to law practice, especially as it offends the provisions of the lawyer-client privilege.
They expressed concerns that the SCUML, the Rules of Professional Conduct and the NBA Rules and Guidelines on Anti-Money Laundering and Counter-Terrorism Financing were not made to interfere with lawyer-client privilege.
However, the tension generated by the provision was tempered by the July 2024 judgment of a Federal High Court in Abuja, which struck down the requirements of the law after an Abuja-based lawyer, Arome Abu Esq, filed a public interest suit in the court against the Central Bank of Nigeria, the Economic and Financial Crimes Commission, Guaranty Trust Bank Ltd, and the Attorney General of the Federation in suit number: FHC/ABJ/CS/25/2023.
In his judgement, Justice Obiora Egwuatu, held thus, “a declaration is made that the inclusion of ‘notaries’ and re-inclusion or red categorisation of ‘legal practitioners’ in the definition list of designated non-financial businesses and professionals in Section 30 of the Money Laundering (Prevention and Prohibition) Act 2022 is null, void and unconstitutional.
“An order of perpetual injunction is made restraining the 1st Defendant (CBN) from taking any step to implement its circular referenced FPR/DIR/PUB/CIR/001/052 dated June 20, 2022 and the Economic and Financial Crimes Commission (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022 is unconstitutional, null and void.”
The fact that the order was not appealed against, and banks started complying assured of the certainty and independence of their profession after the umbrella body of lawyers, the NBA challenged the same provisions in 2013 without much success.
Sections 6,7,8,9,11 and 30 of the Money Laundering (Prevention and Prohibition) Act 2022 provide that financial institutions and lawyers are to avoid banking secrecy and confidentiality of transactions.
Further to these provisions, the Central Bank of Nigeria (CBN) on June 20, 2024, in a circular with reference number: FPR/DIR/PUB/CIR/00/052 directed all banks, other financial institutions (OFI) and payment service providers (PSPs) to immediately comply with the provisions of the “CBN (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations 2022.”
The circular signed by the Director of the Financial, Policy and Regulation Department of the CBN, Chibuzo Efobi said the directive followed the review of the CBN/CFI anti-money laundering regulation 2013 and its amendments to comply with the provisions of a new regulation titled: “Central Bank of Nigeria (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022.”
National agencies like the EFCC; the Independent Corrupt Practices Commission (ICPC); and the Nigerian Financial Intelligence Unit (NFIU) have been enforcing these provisions.
Arome Abu’s suit was a follow-up to the NBA suit, which also challenged a similar circular to financial institutions to ask their customers to update their account information with evidence of registration with the Special Control Unit Against Money Laundering (SCUML), especially as it relates to legal practitioners’ obligations under sections 20 and 21 of the Legal Practitioners Act, Section 192 of the Evidence Act and Section 37 of the Nigerian Constitution 1999 (as amended).
In his judgement in the earlier suit, Justice Gabriel Kolawole granted the reliefs sought by the NBA against the CBN and held that legal practitioners were excluded from complying with the requirements of SCUML.
Dissatisfied with the verdict, the CBN appealed at the Court of Appeal and the appellate court led by Justice Emmanuel Agim similarly dismissed the appeal declaring that “the establishment of SCUML as it relates to lawyers is contrary to the provisions of the Legal Practitioners Act and that legal practitioners in Nigeria owe clients a duty to keep private and confidential, their correspondences and communication, hence the money laundering regime undermines this obligation.”
This verdict was relied on by the Court of Appeal in a related suit between the Federal Republic of Nigeria vs Chief Mike Ozekhome (SAN) (2021) 9 NWLR (Pt. 1782) page 448 to further declare that legal practitioners were excluded from the definition of designated non-financial institutions contained under Section 25 of the Money Laundering (Prohibition) Act 2011.
The latest suit filed by Arome was caused by his experience on September 27, 2022, when a bank, the Guaranty Trust Bank restricted his law firm’s three accounts containing foreign currencies following the earlier CBN circular despite the law passed by the National Assembly on March 16, 2022 abolishing some aspects touching on sale of property, purchase or sale of any business, management of client money, securities or other assets, creation, operation or management of trust, companies or similar structure.
He further contended that the SCUML provisions established under the Money Laundering (Prevention and Prohibition) Act as it relates to legal practitioners are unconstitutional, null and void.
He demanded an order of perpetual injunction restraining the 1st Defendant (CBN) from taking any step to implement its circular referenced FPR/DIR/PUB/CIR/001/052 dated June 20, 2022 and the Economic and Financial Crimes Commission (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022 “in so far as it purports to apply to legal practitioners.”
Replying, the CBN contended in its counter affidavit that Abu’s refusal to obtain the SCUML certificate breached sections 30(1) and 17(2) of the Money Laundering (Prevention and Prohibition) Act (MLPPA) 2022 and Section 63(1) of the CBN (Anti-(Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022, adding that the National Assembly was in full compliance of the Court of Appeal judgement in FRN vs Ozekhome by enacting the Money Laundering (Prevention and Prohibition) Act 2022 which repealed the Money Laundering (Prohibition) Act 2011.
On their part, the EFCC countered the suit by arguing that the plaintiff (Arome Abu) did not contemplate the provisions of Section 11(4) of the Money Laundering (Prevention and Prohibition) Act 2022 concerning legal practitioners with functions in sections of the Act which does not limit them from performing their duties and responsibilities to their clients just like other professionals like accountants, secretaries, real estate agents, etc.
The judge dismissed all the counter-affidavits and upheld the plaintiff(Abu)’s position.
Although banks began complying with the latest judgement on the anti-money laundering law as a bank wrote to its client: “Following the recent judgement in Suit No: FHC/ABJ/CS/25/2023 Abu Arome Vs CBN & 3 Ors, we are pleased to inform you that you no longer need to provide SCUML certificate to operate your account,” it appears the last has not been heard on the matter.
For instance, during the just concluded 64th Annual General Conference of the NBA in Lagos on August 28, the Chairman of the EFCC, Ola Olukorede warned lawyers against running foul of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations.
In a statement by his spokesperson, Dele Oyewale, he called on lawyers to conduct thorough background checks on their clients to avoid breaching Anti-Money Laundering and Counter-Terrorism Financing regulations.
He said, “While we try to comply with international laws and regulations, we should also do what is right for ourselves so as to protect the sanctity of our profession, which is very key.”
Similarly, in the 2023 AGC, the Chairman of the Independent Corrupt Practices Commission (ICPC), Professor Bolaji Owasanoye (SAN) maintained that lawyers must report suspicious financial transactions by their clients to relevant regulatory agencies.
He said the anti-money laundering provisions were not targeted against lawyers “but meant to reproduce international standards required in transactions.”
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