Can an AGF Amend a CBN Governor’s Regulations?

Introduction

For reasons which I shall presently outline, I believe that the Central Bank of Nigeria (Anti-Money Laundering and Combating the Financing of Terrorism in Banks and other Financial Institutions in Nigeria) (Amended) Regulations, 2019 (or the CBN (AML-CFT) Regulations), are problematic at best, and at worst, they are outrightly invalid.

Background

These Regulations were supposedly enacted pursuant to powers conferred on the Attorney-General of the Federation by the Money Laundering Prohibition Act 2011, as amended. But, this is not so straightforward, because they actually sought to correct an earlier set of Regulations made by a former Governor of the Central Bank, Mallam Sanusi Lamido Sanusi, in 2013. For that reason – to the extent that the said amendment was effected, not by the CBN Governor, but by the Attorney-General of the Federation, Abubakar Malami, SAN – I believe it is somewhat anomalous, as the following review of their respective enabling provisions will show.

The CBN (AML-CFT) Regulations 2013

These were made pursuant to the provisions of Section 57(1) of the Banks and other Financial Institutions Act, 1991 (“BOFIA”), as amended; they empower the Governor of the Central Bank to “make regulations, published in the Federal Gazette, to give full effect to the objects and objectives of (the) Act”. The obvious question is: what are the objects and objectives of BOFIA? Even though it is not explicitly stated in the text of the law, however, it can hardly be argued that its purpose is to regulate and sanitise the practice of banking in Nigeria; to ensure sound overall macro-economic stability and foster public, governmental and international confidence in the industry – and, by extension, the Nigerian economy. Needless to say, any unsalutary practices – such as money laundering – which are carried on in, or are facilitated by, or through banks, are well within the scope of those objectives, given that it is common knowledge that, banks have historically (if not inevitably) played pivotal roles in laundering illicitly obtained funds – albeit, sometimes unwittingly.

The CBN (AML-CFT) (Amendment) Regulations 2019

By contrast, these Regulations (which amended the principal CBN (AML-CFT) Regulations 2013) were made pursuant to Section 23(1) & (2)(e) of the Money Laundering (Prohibition) Act 2011, as amended. This provision stipulates that:-

“(1) The Attorney-General may make orders, rules, guidelines or regulations as are necessary for the efficient implementation of the provisions of this Act”,

(2) Orders, rules, guidelines or regulations made under subsection (1) of this Section may provide for – (e) any other matter which the Attorney-General may consider necessary or expedient for the purpose of the implementation of this Act”.

Analysis

The obvious question is: in purporting to make Regulations to control money laundering generally, can the Attorney-General of the Federation impinge or encroach on the powers of the CBN Governor to regulate banking by enacting – not through a stand-alone subsidiary legislation – but by amending a pre-existing statute made by the latter? In other words, are the powers of the AGF and the CBN Governor to control money laundering in banks – if any – co-terminus or are they mutually-exclusive? If they are co-terminus, can the AGF validly amend a law made by the CBN Governor? Who is competent to amend a law which was originally made by another person or institution – is it the original lawmaker, or can another person/institution do so? Does the subject matter of both the principal law and its amendment, make a difference? If both sets of laws deal with the same subject-matter, does the fact that different legislators made them make any difference? We shall shortly attempt a few answers. But, first, some . . .

Judicial Review

In construing the relevant statutes, i.e., BOFIA, the MLPA and the aforesaid Regulations, it is well to remember that they encroach on the rights of citizens to property and their persons. In this regard, it is settled that such statutes should be construed like penal laws, i.e., contra preferences, namely strictly in favour of the subject, and against the law-maker. This means such statutes should be interpreted so as to respect such rights, and if there is any ambiguity, the construction which favours the freedom of the individual should be adopted: EZE v GOVERNOR OF ABIA STATE (2010) 15 NWLR pt. 1216 pg. 324; OKOTIE-EBOH v MANAGER (2004) 18 NWLR pt. 905, pg. 242; AFOLABI v GOVERNOR OF OYO STATE (1985) 2 NWLR pt. 9 pg. 731 @ 753H, S.C.

We have already set out the provisions of both BOFIA and the MLPA which empower the CBN Governor and the AGF, respectively, to make the two sets of Regulations. In the case of the latter, whilst the MLPA merely empowers the AGF to make Regulations pursuant to and for giving effect to it, however, in purporting to exercise that power, the AGF amended a pre-existing set of Regulations which were made – not by him or his predecessor(s) – but by a different person/office, the CBN Governor. The validity or otherwise of this action (and that of all subsidiary legislations – which is what the Regulations are) depends wholly on the legal status of subsidiary instruments and the conditions under which they may be validly made.

In this regard, it is settled that a subsidiary legislation derives life or force of law from the principal law. Accordingly, it cannot contradict or over-ride the principal legislation: KENNEDY v I.N.E.C. (2009) 1 NWLR pt. 1123 pg. 614 @ 642D. A subsidiary legislation cannot over-rule the law: AKANNI v ODEJIDE (2004) All FWLR pt. 218 pg. 827 @ 853E, C.A. A subsidiary legislation cannot expand or curtail a substantive statute. It must be within the authority derived in the main enabling statute: OLANREWAJU v OYEYEMI (2001) 2 NWLR pt. 696 pg. 229 @ 255, C.A.; ISHOLA v AJIBOYE (1994) 6 NWLR pt. 352 pg. 506 @621, GOVERNOR OF OYO STATE v FOLAYAN (1995) 8 NWLR pt. 413 pg. 292 @ 327. A statute can only be amended by another statute: KUUSU v UDOM (1990) 1 NWLR pt. 127 pg. 421; a statute cannot be amended by a subsidiary legislation: PHOENIX MOTORS v N.P.F.M.B (1993) 1 NWLR pt. 272 pg. 718 @ 728.

In mirroring the CBN (AML-CFT) Regulations 2013 and their 2019 Amendment against the foregoing principles, what is manifestly clear is the following:

As previously stated, whilst the ‘principal’ law, i.e., the 2013 Regulations (indeed, that is how the 2019 Amendment refers to it) were made pursuant to BOFIA, the amendment thereto was made pursuant to the MLPA. There is virtually no precedent for this sort of cross-amendment: a situation where a person purports to act under one law, to amend a law made by another person pursuant to a different law.

The CBN (AML-CFT) (Amendment) Regulations 2019 is unique and unprecedented in this regard. I believe this makes it anomalous. Putting it bluntly, I believe that the Hon. AGF acted ultra vires when he purported to amend the CBN (AML-CFT) Regulations 2013. This is, pre-eminently, because the subject matter of both BOFIA, the ‘principal’ Regulations and his purported amendment are special – they seek to regulate banking and to control the incidence of money laundering specifically within banks.

By contrast, the provisions of the MLPA 2011, as amended – under which the AGF purported to effect the amendment – are general in scope, as they merely seek to control money laundering generally. It is trite law, that special things derogate from general things generalia specialibus derogrant: MADUMERE v OKWARA (2013) LPELR 1 @ 15 – 17; ATTORNEY-GENERAL OF OGUN STATE v ATTORNEY-GENERAL OF THE FEDERATION (2002) 18 NWLR pt. 798 pg. 232. Accordingly, the amendment ought, properly, to have been made under and pursuant to BOFIA – and, by the CBN Governor, who made the initial Regulations, not the AGF.

For the same reason, I believe that the provisions of Regulation 3 of the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions) Regulations, 2013 are ultra vires the Minister of the said Ministry who made them. This is because, they purport to empower him (or her) “to declare and designate any other business or profession as Designated Non-Financial Institutions”, contrary to the provisions of the parent/enabling MLPA, 2011, as amended, which specifically confers that power – in Section 25 thereof – on the Ministry itself, and not the Minister; they are not synonymous: a subsidiary legislation cannot contradict the principal statute.

Yet another anomaly in a related subsidiary legislation – the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions) Regulations, 2016 – is the fact that it purports to categorise lottery business and pools betting as Designated Non-Financial Institutions. This is because, the subject-matter of lotteries and pools betting are not within the legislative competence of the National Assembly, under either the Exclusive Legislative or Concurrent Legislative Lists of the 1999 Constitution. Rather, they are within the exclusive competence of State Houses of Assembly. To the extent that the Minister of Industry, Trade and Investment – who made the Regulations – cannot exercise a power which the National Assembly, which empowered his ministry to make the Regulations, does not itself possess (nemo dat quod non habet), those Regulations are ultra vires, invalid, null and void.

Autonomy or Autotomy?

Wonders, it is said

Shall never end

Such is the rot

Nay, dysfunction

In virtually every sphere

Of our national life

That even the judiciary

Is not spared

As is clearly writ large

By the on-going industrial action

Supposedly by the Judicial Staff Union

But, who – strangely – are non-judicial staff

Over financial control – or lack thereof

To use the popular phrasing:

‘Judicial autonomy’

Or unfettered access to funds

An end to the present practice

Where the courts are tied

To the apron strings

Of the Executive

Notwithstanding the clear provisions

Of the Constitution

As severally interpreted

In subsisting court judgements

What does this say

About our belief in the rule of law?

Are the three arms of Government truly equal?

Why is the control of judges pay –

Not under their hand

But, is, rather, subject to the whims and caprices

Of the Executive

Whilst the Legislature seemingly cannot be bothered?

This ‘conspiracy of silence’

Has lent credence

To the suspicion, in some quarters

That the situation suits the other two arms

Predictably, the strike has hit

Counsel and litigants most hard

Prompting the latter to march in solidarity

Which was, unfortunately, undermined by a ‘typo’ in the banner

Displayed by protesting members

Of the Abuja (the so-called ‘Unity’) Bar

A cruel twist on the strike’s mantra

Achieved simply by switching a letter!

Promptly debunked – of course

As the product of a mischievous photoshop

But, seriously, when

Will this cycle end?

What does it take for the Executive

To observe ‘international best practices’

In the funding of our judiciary?

A new dimension? Some fresh thinking?

An elite consensus?

Another Constitution?

What is wrong with this one?

What is wrong with us?

In other words,

Perhaps the problem

Is our mind-set:

Our pervasive obsession –

At all levels – personal and otherwise

With money

And everything to do with it

For us, yes! To others, we deny

It is a sad irony, indeed

That those who wield

The power of life and death

Are – over their own – shockingly helpless

So, when next we grumble

About the so-called rot in the system

All we need do

Is a quick reality check:

Tell ourselves some home truths

Even if in the language of ‘the cool’:

‘Wake up and smell the coffee!’

Perhaps, we are our own worst enemies.