The newly-inaugurated Nigerian Financial Intelligence Unit (NFIU) has said banks will bear the brunt of its sanctions imposed for breach of the new guidelines for the operations of the states/local government joint accounts.
Consequently, the unit said banks and other financial institutions should be prepared for local and international sanctions should they connive with governors to circumvent the guidelines which take effect on June 1.
Spokesperson for the NFIU, Mallam Sani Tukur, said this in an interview in Abuja on Saturday.
He explained that the guidelines, recently issued by the unit, were meant for banks and other financial institutions in accordance with the mandate setting up the NFIU.
Tukur stated, “Any bank that connives with governors or local government chairmen to breach the directives will face the necessary sanctions.
“For instance, if you (as a bank) deliberately allows the withdrawal of let’s say N100m, you may be sanctioned to the tune of that amount; you may be made to forfeit that same amount of money to the (Federal) government.
“Or, if there is a threat to the international financial system on account of a transaction, the international financial system can sanction the bank concerned instead of Nigeria as a whole.”
In response to a question on what sanctions await governors who defy the guidelines and tamper with LG funds, Tukur said, “We deal with banks and other financial institutions. The guidelines we released is generally for banks not to allow such to happen.
“If they connive with governors to allow that to happen, they will be sanctioned. If the governors also withdraw that money, we will get the records and if it is discovered that a transaction was used for money laundering or other sundry activities, which contravene the guidelines, intelligence can be shared and used by other relevant security agencies for necessary action.”
Asked if the NFIU was pushing for the abolition of the states/local government joint accounts, he said, “Not at all. That account has a constitutional backing, what we are pushing for is that the account should not be used by state governors for withdrawals and payments; it should be used for the distribution of funds to local government councils.
“The account should not be used by governors to pay contractors. What they are supposed to use that account for is the distribution of funds directly to local governments.
“State governments are even supposed to give 10 per cent of their allocations for distribution to local governments that is the requirement but they are not doing that.”
The agency had in an earlier statement by its acting Chief Media Analyst, Ahmed Dikko, noted that cash withdrawal and transactions of the State/Local Government Joint Accounts posed corruption, money laundering and security threats at the grassroots, the financial system and the country as a whole.