EFCC clamps down on real estate investors over money laundering

EFCC has continued to guarantee property surveying and valuation firms subscribe to an alert strategy and behaviour screening earlier on-boarding customers arsenic portion of the ongoing owed diligence to curb wealth laundering. The scrutiny is affecting transactions successful the commercialized existent property market, CHINEDUM UWAEGBULAM reports.

• Prospective investors shy distant from investments
• Scrutiny dampens transactions for high-end properties

Rising information agency’s scrutiny whitethorn person dented the momentum of request successful the existent property marketplace successful large cities, lowering investments successful high-end properties.

The concern reached its highest recently, erstwhile the Economic and Financial Crimes Commission (EFCC) wrote to the president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), alerting the assemblage connected the commencement of the enforcement of the regularisation for the implementation of targeted fiscal authorisation connected terrorism, coercion financing and different related measures successful the existent property sector. This is for nonaccomplishment to instrumentality targeted fiscal authorisation requirements arsenic prescribed by the Terrorism and Prevention and Prohibition Act, 2022.

The missive signed by SCUML Director, Daniel Isei, titled: ‘Enforcement of the Regulation for the Implementation of Targeted Financial Sanctions connected Terrorism, Terrorism Financing and Other Related Measures, 2022, successful the Real Estate Sector’, recalled that the Terrorism (prevention and prohibition) Act, 2022 imposed the obligations connected Designated Non-Financial Business and Profession (DNFBP) to instrumentality targeted fiscal sanctions related to coercion and coercion financing.

“This requires that each property surveying and valuation firms subscribe to the Nigeria Sanction Committee alert strategy and behaviour authorisation screening earlier on-boarding prospective customers, arsenic portion of the ongoing lawsuit owed diligence for existing customers utilizing the UN consolidated list, Nigeria authorisation list, database of the designated persons oregon entities nether United Nations Security Council Resolution (UNSCR) 1373 forwarded by a 3rd party, International organisation oregon overseas state to Nigeria oregon specified different database arsenic directed by the Nigeria authorisation Committee,” helium said

Also recently, EFCC Acting Director, Lagos Zonal Command, Michael Wetkas, said that “Registration with SCUML has go indispensable arsenic a mode of monitoring and reducing the hazard of subversive usage of the existent property operators by wealth launderers and coercion financiers.”

Wetkas urged DNFBPs to behaviour owed diligence and adhere to the Know Your Customers (KYC) rule earlier consummating immoderate transaction.

The Act provides for an effective, extended ineligible and organization model to enactment the combat against wealth laundering and coercion financing successful Nigeria.

The cardinal objectives of the instrumentality are to fortify the existing strategy for combating wealth laundering and related offences, marque capable provisions to prohibit wealth laundering, grow the scope of wealth laundering offences and supply due penalties and found a peculiar power portion against wealth laundering EFCC.

The Guardian learnt that existent supervisory enactment successful the marketplace by the EFCC Special Control Unit Against Money Laundering (SCUML) has created a lull, arsenic prospective investors and Nigerians surviving overseas debar unnecessary encounters with the economical watchdog.

Months aft the Nigerian authorities reached an accord with the United Arab Emirates (UAE), connected looted funds, a caller study released precocious alleged that warfare profiteers, panic financiers and cause traffickers sanctioned by the U.S. successful caller years person utilized Dubai’s real-estate marketplace arsenic a haven for their assets.

The study by the Washington-based Centre for Advanced Defence Studies (C4ADS), relying connected leaked spot information from the city-state, offers grounds to enactment the long-whispered rumours astir Dubai’s real-estate boom.

It identifies immoderate $100 cardinal successful suspicious purchases of apartments and villas crossed the metropolis of skyscrapers successful the United Arab Emirates, wherever overseas ownership fuels operation that present outpaces section demand.

The Guardian learnt that implicit 800 properties worthy $400 cardinal successful Dubai, United Arab Emirates (UAE) person been traced to Politically Exposed Persons (PEPs) successful Nigeria.

An subordinate fellow, Chatham House, Matthew Page, said this portion delivering a insubstantial titled: ‘Illicit Financial Flows (IFFs) successful Real Estate and Education Sector’, adding that erstwhile authorities governors person acquired a full of 69 properties; erstwhile 5 presidency unit members were controlling 13 properties, portion erstwhile 16 lawmakers person 45 properties.

According to the findings, erstwhile 15 ministers person 25 properties, 158 suspected politicians’ proxies are successful power of 226 properties, 14 information assemblage leaders 71, 50 PEP-linked concern persons 91, 13 Known Nigerian instrumentality enforcement bureau suspects 216, 16 heads of section and bureau 25, 11 NNPC officials 19, a justice has one.

Page, who blamed the deficiency of transparency, immense fiscal flows and inadequate planetary safeguards for the improvement further disclosed that Nigerian politicians are spending implicit $30 cardinal yearly connected UK education, which helium said was beyond their yearly earnings.

He urged investigators to comparison these payments to their known assets and incomes, analyse third-party payments, petition forex data, reappraisal media for PEP schooling and probe MDAs that supply scholarships.

A study by Civil Society Legislative Advocacy Centre, (CISLAC) alleged high-level wealth laundering successful the existent property sector, revealing however corrupt Nigerians usage property firms to conceal illicit funds.

The papers titled, “Nigeria’s Dirty Money and Real Estate: How Money Laundering done Real Estate Impacts Nigeria’s Fight against Corruption” was signed by CISLAC’s Executive Director, Auwal Musa Rafsanjani.

The study noted that the existent property assemblage is populated with informal agents, who power implicit 95 per cent of the market.

According to the report, whereas immoderate existent property agencies that run successful the assemblage are registered successful overseas jurisdictions, galore of them besides reside successful taxation havens. It disclosed that determination is simply a consolidation of soiled deals successful the sector, a improvement that is taking a antagonistic toll connected the government’s wide lodging policy.

The study said that galore prime properties litter large cities successful Nigeria, without anybody occupying them, saying it was precocious clip the authorities devised means of collecting spot taxes connected them.

It said, Nigeria’s cities similar Abuja, Lagos, and Port-Harcourt person go flashpoints wherever high-level superior flights instrumentality place, portion media and tribunal reports constituent to the engagement of criminals moving fraud syndicates and cause trafficking successful buying up oregon processing properties.

The interaction of these investments, the study revealed is evident successful the precocious outgo of houses successful some municipality and suburban areas, and the improvement of shelters successful lone selected areas.

The study stated: “Nigerian existent property assemblage has agelong provided an accidental for persons and companies to launder illegally acquired funds. The stock of the existent property services to the nominal Gross Domestic Product (GDP) is estimated astatine astir 7 per cent per annum. It is simply a important contributor to the system and tin fast-track the maturation of the nation’s economy, if adequately structured.

“However, corrupt wealth channelled into the system done the existent property assemblage tin distort the marketplace and inflate existent spot prices. Lagos is the astir costly metropolis successful Africa. In the affluent suburb of Ikoyi, the mean terms of three-bedroom apartments was N140 cardinal ($388,906) successful 2018 portion five-bedroom apartments are sold for an mean terms of N350 cardinal ($972,266).

“This affluence is successful opposition to astir 70 per cent of the full colonisation of Lagos, presently surviving successful informal lodging and slums. The lodging shortage successful Lagos is estimated to beryllium astir 2.5 cardinal units. In large centres specified arsenic Lagos, Abuja, Ibadan and Kano lodging request is increasing astatine astir 20 per cent per year. Inflated prices are, astatine slightest successful part, driven by corruption proceeds laundered done the existent property market.

“The Nigerian existent property assemblage is the 2nd astir susceptible to wealth laundering, adjacent to the Bureau De Change operators. Nigerian instrumentality enforcement authorities, particularly the anti-corruption agencies, are improving their responses to wealth laundering, particularly non-conviction based approaches to plus seizures, which person yielded important results successful the effort to retrieve corrupt assets.”

However, the papers said reliable information is scarce, portion detecting suspicious transactions has been steadily increasing, for illustration successful 2018, 10,346 reports were filed compared to lone 937 successful 2014, it is not wide if immoderate existent property transactions were involved, fto unsocial investigated and confiscated.

The study explained that wealth launderers and criminals usage 3rd parties, professionals, household members and adjacent associates to get high-value existent property arsenic good arsenic usage pseudonyms to unfastened accounts often done which amerciable funds were diverted into high-value existent property acquisitions.

“The laundering of the proceeds of transgression done the acquisition of high-value existent property preferably abroad, bulk of the cases reviewed progressive politically exposed persons and their associates, who transmission astir successful each cases parts of a important measurement of amerciable proceeds into existent property successful Nigeria and abroad. Transfers of illicit funds done offshore slope accounts are precise frequent, portion purchasing existent property properties and laundering of illicit funds done existent property travel often with the purpose of backing of governmental parties oregon governmental endeavours.”

It noted that reforms to adjacent loopholes starring to these gaps had been precise hard to address, arsenic existent property agents were inactive mostly unregulated and seldom reported immoderate suspicious transactions involving unexplained wealthiness erstwhile facilitating existent property transactions.

Estate surveyors and valuers said EFCC oversight functions and monitoring person affected the sector. Chairman, Lagos branch, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr Gbenga Ismail, told The Guardian that “EFCC has been astir for a portion and their scrutiny of each transactions has so impacted connected existent property transactions.

“Obviously, the conception astir affected is high-priced existent property assets. Therefore, astir investment-related transactions person been affected. The commercialized existent property marketplace is besides not excessively deep, so, the wide effect whitethorn not beryllium excessively impacting arsenic bulk of the measurement of existent property transactions is mostly residential existent property and mid-level family/single dwellings transactions,” helium said.

President, International Real Estate Federation (FIABCI) for Africa and Near East Region, Mr Adeniji Adele, an property surveyor, said “The scrutiny mightiness summation the transparency and deter amerciable activities successful the existent property sector, perchance starring to much cautious transactions. “It could besides promote compliance with regulations, which mightiness temporarily dilatory down deals but could yet amended the sector’s credibility and stableness successful the agelong run.

According to Adele, “The luxury and high-end spot conception mightiness consciousness a much pronounced interaction owed to accrued scrutiny. These segments often impact larger transactions and mightiness person a higher inclination for irregularities oregon questionable practices, making them much susceptible to regulatory attention. It whitethorn besides pb to declining transactions successful this assemblage arsenic investors mightiness beryllium frightened due to the fact that of the bureaucracy successful our system.”