LG Funds: Again, NFIU Warns Banks, Others on Full Compliance to Financial Regulations


James Emejo in Abuja

The Nigeria Financial Intelligence Unit (NFIU) Wednesday reinforced the June 1, 2019, deadline to all financial institutions, other relevant stakeholders, public servants and the citizenry to ensure full compliance with the provisions of the guidelines already submitted to financial institutions and relevant enforcement agencies, including the full enforcement of corresponding sanctions against violations.

The unit observed that there had been isolated comments from a section of the public which were in conflict with its initial pronouncement regarding the commencement of investigations into revenue allocations to local government areas across the states of the federation and the need for relevant stakeholders to abide by financial regulations as spelt out in the constitution.

The unit, in a follow up statement issued by its Chief Media Analyst, Ahmed Dikko, a copy which was emailed to THISDAY, reiterated it warning that any contrary action to its circular to affected institutions would be sanctioned.

The statement noted that “NFIU is using this second statement on the above subject to reiterate its position that the June 1 effective date of the guidelines to all financial institutions and public officials on the local government funds stands.

“The unit also maintains its understanding of the 1999 Constitution that no debit is allowed on any local government funds unless and until the funds are credited to and reach the bank accounts of a local government in any state of the federation.”

The agency further stressed that “the provision of the cumulative cash withdrawal not exceeding N500,000 per day is also firmly in place effective from June 1, 2019.

“We observed isolated comments to the contrary in the past few days which in our assessment only amounted to willful misinterpretation of the 1999 Constitution and therefore of no consequences to the operations of the entire financial system.

“The provision of the guidelines to the financial institutions was also on account of legitimate powers provided by the NFIU Act 2018, and any violations of the said guidelines will be sanctioned appropriately.”

The NFIU had in its May 6 release reaffirmed its resolve to “uphold the full provisions of section 162 (6) (8)of the 1999 Nigerian Constitution as amended which designated State Joint Local Government Account into which shall be paid allocations to the local government councils of the state from the federation account and from the government of the state.”

NFIU noted that its action had become necessary in order to check abuses and embezzlement of funds meant for the local government development which are often seized or siphoned by state governors.

Dikko said the move was also to avoid a possible isolation of the entire Nigerian financial system by other International financial systems “because of deficiencies in our anti-money laundering and counter-terrorism financing implementation.

“Therefore, it is no longer possible to allow the entire system to suffer the deliberate and expensive infractions or violations by public officials and/or private business interests.”

It specifically stressed that effective from June 1, 2019, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent both locally and internationally.

The statement further noted that a provision had also been made to the effect that there shall be no cash withdrawal from any local government for a cumulative amount exceeding N500,000 per day, adding that any other transaction must be done through valid cheque or electronic funds transfer.

The local government councils have severally protested to relevant authorities, including the National Assembly, in order to devise another means where such monies could get to them directly.