LG Funds: NFIU guidelines take off today as Akwa Ibom fails to secure court order

Following the failure of Akwa Ibom State Government to secure a court order, the Nigerian Financial Intelligence Unit (NFIU) on Friday said it will go ahead with the implementation of the guidelines on local government funds.

The NFIU on May 6 issued the ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria.’

The guidelines restored the full mandate of the operations of State/Local Government Joint Accounts to be used solely for the distribution of funds directly to the accounts of the local governments.

Banks were requested to ensure the full implementation of the guidelines with effect from June 1, 2019.

However, all the local government areas in Akwa Ibom State, alongside the state government through the Attorney-General of the state approached the Uyo division of the Federal High Court (FHC), seeking to nullify the guidelines issued by NFIU in a suit filed with suit number FHC/UY/CS/88/2019.

The court on Saturday declined the request after listening to counsels from the state government and the NFIU.

The plaintiffs, who were represented by the State Attorney-General, Uwem Nwoko (SAN) also urged the court to grant a restraining order against the NFIU, stopping the commencement of the guidelines on the 1st of June, 2019.

But a Learned Silk, Arthur Obi-Okafor (SAN), who represented NFIU, challenged the locus standi of the plaintiffs and urged the court not to grant any order “in favour of persons who are nothing but busybodies.”

He informed the court that the matter is of grave national security concern and that the urgency raised by the plaintiffs was self-induced since the guidelines were released on the 1st of May, 2019.

The judge, Justice A. A. Okeke, adjourned the matter to June 21, 2019 to hear all pending applications while declining to issue any restraining order.

A top source in NFIU said: “This agency is going ahead with the implementation of the new guidelines. All banks chief executive officers and compliance officers have been given the guidelines.

“We are placing all State Joint Local Government Accounts and all local government accounts under strict monitoring.

“We will not succumb to pressure under any guise. We are determined to save the third tier of government from collapse.”

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Earlier, in a statement, NFIU explained the rationale behind the guidelines.

It said: “The NFIU requests all financial institutions, other relevant stakeholders, public servants and the entire citizenry to ensure full compliance with the provisions of the guidelines already submitted to financial institutions and relevant enforcement agencies, including full enforcement of corresponding sanctions against violations from 1st June, 2019.

“Having realised through analysis that cash withdrawal and transactions from the State Joint Local Government Accounts (SJLGA) poses biggest corruption, money laundering and security threats at the grassroots levels and to the entire financial system and the country as a whole, decided 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.

“The amount standing to the credit of local government councils of a state shall be distributed among the local government councils of that state and not for other purposes. As far as the NFIU is concerned, the responsibility of the account as a collection account is fully reinstated.

“In addition, taking such measures was necessitated by prompting reasons on the NFIU to respond to threats of isolating the entire Nigerian financial system by other international financial systems due to deficiencies in our anti-money laundering and counter terrorism financing implementation and measures.

“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.”

“In addition, a provision is also made to the effect that there shall be no cash withdrawal from any local government account for a cumulative amount exceeding N500,000.00 per day. Any other transaction must be done through valid cheques or electronic funds transfer.”

The nation’s 36 governors have protested to President Muhammadu Buhari against going ahead with the implementation of new guidelines put in place by the Nigerian Financial Intelligence Unit (NFIU).

They advised the President to call NFIU to order because the guidelines are in violation of the 1999 Constitution.

They accused NFIU of stoking mischief and also deliberately seeking to cause disaffection, chaos and overheat the polity.”

A former Chairman of the Nigeria Governors Forum, Mallam Abdulaziz Yari made the governors’ position known in a May 15, 2019 letter to the President.

The new NGF chairman, Dr. Kayode Fayemi, was said to be exploring dialogue with the presidency on the row as at press time. The Nation