Critical Conversations

War Against Corruption: The Case for Barring Bankers from Operating Foreign Accounts

The House of Representatives currently has before it a bill seeking to bar bank workers and staff of other financial institutions from operating foreign accounts.

The bill which has scaled the first reading requires that spouses and children of bank employees and staff of other financial institutions may be mandated to declare their assets when it finally becomes law.

The legislation was titled “A Bill for an Act to amend the bank employees, etc., (Declaration of Assets) Act CAP. B1 Laws of the Federation of Nigeria 2004 to reflect the prevalent situation in the country.”

The bill was sponsored by Shina Peller, the lawmaker representing Iseyin, Itesiwaju, Kajola, and Iwajowa federal constituency in Oyo State. He proposed series of amendments to the Act. Section 1 of the Act is to be amended by deleting the existing subsections and inserting new ones:

“(1) Every employee of a bank shall, immediately after assuming duty and, thereafter, at the determination of his (or her) employment, and in the case of a serving banker, within thirty (30) days of the receipt of the Declaration of Assets form from the appropriate authority or at such other intervals as the President or the appropriate authority may specify, make full disclosure of his (or her) properties, assets and liabilities, and those of his (or her) spouse or unmarried children under the age of 18 years.

“(2) For this section, a transfer or secondment from one bank to another shall be treated as a new employment.”

An aspect that has remained topical is the part of the bill that is seeking an amendment to Section 5 by inserting new subsections that prohibits foreign accounts for bank workers. It states that “(a) A bank employee shall not maintain or operate a personal bank account in any country outside Nigeria; “(b) Any complaint that a bank employee has committed a breach of or has not complied with the provisions of this Act shall be made to the Central Bank of Nigeria or the appropriate regulatory body in the case of employees of other financial institutions.”

Section 12 of the Act is to be amended by deleting the existing provisions and replacing them with, “(1) The President may direct, by an instrument published in the Federal Gazette, that the provisions of this Act be applied to other financial institutions. (2) Where the President directs as provided in Subsection 1 of this section, the Act shall apply subject to such textual modification as may be necessary for its execution.”

Requiring bank employees to declare their assets should be enough deterrent for corruption within the banking industry which extends to other areas as it underlines virtually all other socio-economic activities within the country.

Barring bank employees from having foreign accounts, no doubt, will have a remarkable impact in the fight against corruption which has continued to cripple all aspects of the Nigerian economy.

The major problem is the implication of such a bill on the fundamental rights of bank employees and individuals who are related to them.

Privacy is a fundamental human right recognised in the UN Declaration of Human Rights, International Convenant on Civil and Political Rights, and in many other international and regional treaties. Nearly every country in the world recognises a right of privacy explicitly in their Constitution.

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The right to privacy is one of the fundamental human rights entrenched in the Nigerian Constitution. Section 37 of the 1999 Constitution provides that: “The privacy of citizens, their homes, correspondence, telephone conversations, and telegraphic communications is hereby guaranteed and protected.”

One of the shortcomings of this bill, therefore, is the fact that it already treats every bank employee as a suspect or prospective culprit in the fight against corrupt practices in the industry.

While it acknowledges the existence of these practices, it fails to recognise the fact that blankets have a right, and the bill could impinge on their privacy. The implication of this is that it extends to family members of bank employees who may be required to declare their assets.

The bill, nonetheless, makes up for the position that if one is working in Nigeria and for a bank therein, it doesn’t make any case to operate a foreign account.

The legislation can tackle corruption but it is quite stringent. The question thus is: Is it worth the severity?

Meanwhile, corruption has continued to hold sway in the country with the active connivance of players in the banks and other financial institutions. Some bank employees are known to aid fraudsters and other corrupt individuals. Some of them even act as moles for them.

Most stolen public funds are stashed in foreign accounts and carried out with the aid of a bank employee.

As evident in the case of recovered loots, those stashed in foreign accounts usually come with high returns. For instance, the Nigerian Government has recovered over $700 million (about N288 billion) stolen funds stashed in foreign countries in the past four years. This is according to the Attorney General of the Federation and Minister of Justice, Abubakar Malami, who said the recoveries were made possible through “proactive and collaborative” efforts of foreign nations such as the United States, United Kingdom, Bailiwick of Jersey, Switzerland, and Ireland.

This is the reason why many corrupt individuals hold on to the idea of operating foreign accounts or engaging the help of bank employees to elude concerned authorities. Oftentimes, they require the assistance of their relatives. As evident in the viral case of the former Special Assistant to Ogun State, Abidemi Rufai involved in wire fraud, it was said that some of the proceeds were mailed to the Jamaica, New York address of his relative.

According to a statement from Acting U.S. Attorney Tessa M. Gorman, “law enforcement determined more than $288,000 was deposited into an American bank account controlled by Rufai between March and August 2020.”

Most fraudulent cases usually follow the same process. The bill proposed by Shina Peller can thus frustrate these veiled attempts. The Act in general discourages fraudsters and corrupt individuals from patronising bank employees. This should make the needed statement in the overall fight against corruption.