By Abubakar D. Sani, Esq.
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This startling view is prompted by the seeming inconsistency between the fundamental right to property conferred by Section 44(1) of the Constitution and the apparent restriction on the enjoyment of that right in relation to cash imposed by the Money Laundering Act, 2011 (MLA), which prohibits cash payments in excess of N5 million and N10million by individuals and companies, respectively, outside designated financial institutions, such as banks, bureaux de change, etc. I believe a clear case can be made for interrogating the validity of that provision of the MLA (Section 1) vis-à-vis the aforesaid constitutional provisions. Do the said provisions of the MLA amount to compulsory acquisition by the State of a person’s right to deal with or manage his or her cash assets as he or she deems fit?
Is that species of right to, or interest in property capable of compulsory acquisition by the State within the contemplation of Section 44 of the Constitution in the same way as landed or real property? Are there different categories or species of property for the purposes of the right thereto conferred under that provision of the Constitution? Does restricting the value of cash payments which can be made or received outside financial institutions violate a person’s right or freedom to deal with his/her/it’s properly without let or hindrance? Is that right absolute or can it be derogated from under the Constitution? If so, do the circumstances for such derogation exist under the MLA?
Beyond the universally-recognized imperative of tackling attempts by organized criminal gangs to launder the proceeds of their illegal activities, can the restriction on cash payments outside financial institutions be rationalized on any credible, constitutionally-defensible bases? This is the concern of this paper and, I hope to demonstrate, at the end of it, that the answer to the poser is a resounding “No”. But, first, the obligatory statutory review.
The Money Laundering Act (MLA)
Section 1 of the MLA provides that: “No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding-
(a) N5,000,000.00 or its equivalent in the case of an individual; or
(b) N10,000,000.00 or its equivalent in the case of a body corporate”
Section 15 of the Act further provides that: –
(1) Money laundering is prohibited in Nigeria”
(2) Any person or body corporate in or outside Nigeria, who directly or indirectly-
(a) Conceals or disguises the origin of;
(b) Converts or transfers;
(c) Removes from the jurisdiction; or
(d) Acquires, uses, retains or takes possession or control of any fund or property (which he) knowingly or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act; commits an offence of money laundering under this Act”
(6) The unlawful act referred to in subsection (2) of this section includes participation in an organized criminal group, racketeering, terrorism, terrorist financing, trafficking in persons, smuggling of migrants, sexual exploitation, sexual exploitation of children, illegal trafficking in narcotic drugs and psychotropic substances, illicit arms trafficking, illicit trafficking in stolen goods, corruption, bribery, fraud, current counterfeiting, counterfeiting and piracy of products, environmental crimes, murder, grievous bodily injury, kidnapping, hostage-taking, robbery or theft, smuggling (including in relation to customs and excise duties and taxes), tax crimes (related to direct taxes and indirect taxes), extortion, forgery, piracy, insider trading and market manipulation or any other criminal act specified in this Act or any other law in Nigeria”.
As for Section 44 of the 1999 Constitution, it provides as follows, inter alia:
“(1) No movable property or any interest in an immoveable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria expect in the manner and for the purposes prescribed by a law that, among other things-
(a) Requires the prompt payment of compensation therefor; and
(b) Gives to any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria;
“(2) Nothing in subsection (1) of this section shall be constructed as affecting any general law –
(a) For the imposition or enforcement of any tax, rate or duty;
(b) For the imposition of penalties or forfeitures for the breach of any law, whether under civil process or after conviction for any offence;
(c) Relating to leases, tenancies, mortgagees, charges, bills of sale or any other rights or obligations arising out of contracts;
(d) Relating to the vesting and administration of the property of persons adjudged or otherwise declared bankrupt or insolvent, of persons of unsound mind or deceased persons and of corporate or unincorporated bodies in the course of being wound-up.
(e) Relating to the execution of judgments or orders of court;
(f) Providing for the taking of possession of property that is in a dangerous state or is injurious to the health of human beings, plants or animals;
(g) relating to enemy property;
(h) to trusts and trustees;
(i) relating to limitation of actions;
(j) relating to property vested in bodies corporate directly established by any law in force in Nigeria;
(k) relating to the temporary taking of possession of property for the purpose of any examination, investigation or enquiry;
(l) Providing for the carrying out of work on land for the purpose of soil conservation; or
(m) subject to prompt payment of compensation for damage to buildings economic trees or crops, providing for any authority or persons to enter, survey or dig any land, or to lay, install or erect poles, cables, wires, pipes or other conductors or structures or any land, in order to provide or maintain the supply or distribution of energy, fuel, water, sewage, telecommunication services or other public facilities or public utilities”.
Even though Section 45 (1) of the Constitution permits the restriction of certain fundamental rights (in the interest of defence, public safety, public order, public morality – in respect of those conferred by Sections 37, 38, 39, 40 and 41), that restriction is expressly inapplicable to the fundamental right to property conferred by Section 44 of the Constitution. Beyond that, however, it is also noticeable that the sort of right over or interest in property contemplated by this provision of the Constitution appears to be tangible or corporeal in character. In other words, it would appear to exclude the right to manage or deal with one’s cash as he or she deems fit without let or hindrance – certainly not the sort contemplated by the provisions of Section 1 of the MLA on the value of cash that may be transferred outside financial institutions. However, I believe that would be an unduly narrow and restrictive view. This is because, it is settled that the Constitution should be given a broad and liberal interpretation: NAFIU RABIU vs. THE STATE (1980) 1 S.C.
In this context, it means that the right to manage and deal with one’s cash as one deems fit, is no less protected than the right to one’s landed or real property. In other words, the Government may not lawfully interfere or tamper with the former than with the latter. I believe this is the full import and meaning of the words “and no right over or interest in any such property shall be acquired compulsorily” used in Section 44(1) of the Constitution. I submit that the phrase “right over or interest in” should be given its broadest, most liberal connotation.
In other words, I believe that the effect of restricting how much cash one can pay or receive outside a financial institution is to compulsorily acquire a person’s right to deal freely with his or her cash or, his/her interest therein. The question, as previously posed, is: is it legitimate? Can it be justified under the aforesaid constitutional provisions – either as a valid restriction on or derogation from the right to property? I believe the answer, as previously postulated, is ‘No’.
Conclusion
While the curbing of so-called illicit financial flows is a legitimate policy concern world-wide, the deployment of legislation as a means of achieving it, should be done in a manner that is consistent with – and does not detract from – the supreme law, the Constitution, particularly its fundamental rights provisions. To the extent that Section 1 of the MLA does not fall within the circumstances envisaged by Section 44(2) of the Constitution (which, it can be recalled, qualify the enjoyment of the right to property under that provision of the Constitution), I believe that it constitutes an unjustifiable violation of that right. In the circumstances – in relation to one’s cash – I believe that that right is all but absolute and sacrosanct. In other words, it cannot be tampered with, abridged, circumscribed or restricted in the way in which Section 1 of the MLA does by limiting cash payments outside financial institutions to N5m or N10m, as the case maybe.
The foregoing is not mere arm-chair criticism, however. Accordingly, by way of solution, I believe the way out would be for the National Assembly to amend the MLA by refocusing it on its real targets: drug and human traffickers as well as the purveyors of the other sundry unlawful acts listed in Section 15(6) of the MLA. This is because, the MLA could not possibly have been intended to cover mundane cash transfers between family members – nor, even, legitimate retail businesses which are outside the formal sector of the economy. Unless, of course (with the benefit of hindsight), the realization that that provision has proved to be a boon for financial inclusion – an entirely fortuitous fallout. Talk of serendipity.
Abubakar D. Sani, Esq.
26th February, 2022
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