CHECK-MATING THE FINANCING OF TERRORISM IN INDIA AND NIGERIA: A COMPARATIVE APPRAISAL
CHECK-MATING THE
FINANCING OF TERRORISM IN INDIA AND NIGERIA:
A COMPARATIVE
APPRAISAL
Hyginus Uchenna Okoronkwo*[1]
Abstract
In many respects, India and Nigeria
are more of one than two sides of a coin. The vestiges of colonialism have
bequeathed the two-sister countries with similar legal system and some social
issues alike. Today, both are faced with the menace of terrorism and are
jointly and severally combating its sources of finance etc. What are the remote
and immediate causes of terrorism financing in India and Nigeria? How come the domestic
terrorists operating in India and Nigeria have, respectively, continued to
attract local and international sympathizing financiers? How far have both
countries fared in their efforts to permanently block and dry-up the in-flow of funds for terrorism
funding? Where are they getting it wrong and are there lessons both countries
need to draw from each other in their respective efforts to check-mate the
financing of terrorism. With the answers to the foregoing questions in focus,
this research paper re-visits the global malady and topical issue of terrorism
financing, with specific reference to India and Nigeria. In appraising the
topic, the research is largely presented in a comparative manner.
Published in in Volume 2, Issue 2 of International Journal of Research and Legal Governance (IJRLG).
[1] *LL.B
(Ebonyi State University, Nigeria); BL (Nigerian Law School); Diploma- UN &
I.U (New Delhi); MCL (University of Delhi); Ph.D (in view - University of Delhi).
CHECK-MATING THE FINANCING OF TERRORISM IN
INDIA AND NIGERIA:
A COMPARATIVE APPRAISAL.
1.
INTRODUCTION
If there is any major security
threat that constantly bothers Indian and Nigerian governments today, then, it
is no other than acts of terrorism, which live wire is terrorist financing.
These two intertwined organized crimes have also emerged as the foremost global
threats to the international peace and security. Terrorism ranks very high
among globally organised crime because of its funding by some terror sympathetic
governments and individuals across-the-board. It goes without saying,
therefore, that terrorism would not have thrived this much but for the illicit
financial patronages the masterminds have enjoyed for the past decades.
The formation of terrorist camps,
recruitment of its members, their training, procurement of arms and
ammunitions, intelligence gathering and the entire network of terrorists’
activities require huge financial injections. These are known facts. Unless and
until the main sources of terrorists’ supplies are successfully cut off, curtailing
the menace of terrorism maybe take longer than anticipated. All relevant
institutions must be fully engaged in order to permanently block and dry-up the
in-flow of funds for domestic and international terrorism. It is submitted that
once the terrorists run out of funds, they will gradually fizzle away both in
India, Nigeria and elsewhere.
This paper, therefore, seeks to
comparatively appraise those existing legal measures put in place to nip the
scourge in the bud, examine the successes so far recorded, challenges being
faced and suggest ways forward.
Money Laundering and Terrorism financing: Distinctions
Under Article 1 of the United
Nations International Convention for the Suppression of the Financing of
Terrorism 1999,[1]
terrorism financing was given a practical element of definition. It is to the
effect that a person commits an offence within the meaning of the Convention
“if that person by any means, directly or indirectly, unlawfully and willingly,
provides or collects funds with the intention that it should be used or in the
knowledge that it will be used…in any act intended to cause death or bodily
injury to a civilian or any other person not taking active part in the
hostilities…” Under paragraph 2, it is immaterial whether the fund was actually
used to carry out the offence or not.
Therefore, terrorist financing is a term descriptive of the entire
direct and indirect donation or collection of money with the intention that it
will be used for terrorist act.[2] On the other hand, Money
laundering is all the means, procedures or maneuvers which criminals are using
in recycling illegitimately acquired money for legitimate use.
From the descriptions, it may be
inferred that both are not exactly the same. Lately, whereas laundered money
could be occasionally used to further terrorist activities, the main objective
of laundering money is for it to be used for legitimate purposes.
Alternatively, terrorist finances are mostly legitimately sourced but are, ab initio, meant for illegitimate
purposes.
Furthermore, while their respective
destinations may be distilled from their origins, laundered money originates
from illegality but usually end in legitimate investment whereas terrorism
finances are usually sourced from legitimate ventures but the use to which it
will be put is ultimately illegal. Ab
initio, laundered money is dirty money unlike terrorist funds.
In terms of punishment, the
penalties for money laundering and terrorist financing are two apart and
distinct. In Nigeria, terrorism financing attracts imprisonment for life, the
offence of soliciting and giving support to terrorist groups for the commission
of acts of terrorism is punishable with a term of not less than twenty years[3] but the offence of money
laundering is punishable on conviction with a term of not less than 7 years but
may not be more than 14 years imprisonment.[4]
In India, Section 11 of the Unlawful
Activities (Prevention) Act[5] punishes the offence of
dealing with funds of an unlawful association, prohibited under Section 7, with
imprisonment for a term which may extend to three years, or with fine, or with
both. Punishment for the offence of money laundering is provided under Section
4 of the Prevention of Money Laundering Act.[6] The gravity of the offence
committed determines the punishment but attachment of the tainted property is
the first step and confiscation of the property, after adjudication by a
special adjudicatory authority set up under Section 9. Similar to what is obtainable
under the Nigerian Act, the confiscated property goes to the Central Government
in India.
2.
EMERGENCE
OF TERRORISM FINANCING
Terrorism and the day-to-day running of terrorists’ activities are all
capital intensive enterprises. Among the key ingredients for successful
operation of terrorism, guaranteed sources of finance ranks higher. This is so
because even if a terrorist group suffers low ideological motivation, limited
access to arms, ammunition and explosives, regional and international mobility,
recruitment and training structures, steady flow of finance will largely keep
them going for longer.
In Nigeria, some leaders believe that young men are willing to join
terrorist groups than joining the Nigerian army because the terrorists are alleged
to be better equipped and motivated than state security operatives.[7] Indeed, finance is the air
terrorists breathe and without which they will not have life to take the lives
of others.
Terrorists themselves have acknowledged this fact. For instance, the well
known Al-Qaeda leader – Sheik Saeed publicly admitted that the “foremost need
is financial…there are hundreds (of people) willing to carryout martyrdom and
be part of such operations but they can’t find the funds to equip themselves.
So, funding is the mainstay of jihad.”[8] This was his response to
the question, “what are the needs of jihad in Afghanistan?” which is contained
in a video interview Al-Qaeda of Afghanistan released in the month of May,
2007. That interview summarizes the emergence and sustenance of terrorism
financing globally. It has removed all reasonable doubts on the question of why
terrorism is still surging and posing threats to international peace and
security.
3.
TERRORISM
FINANCING: SOURCES OF FUNDS AND FUNDERS
To ‘source’ is to generate or to originate something. Where do
terrorists source out the funds used and/or being used in carrying out their
nefarious activities? Who are their
patrons and what do their so called patrons stand to gain from patronizing
them?
Different terrorist groups may adopt diverse
means for their fund raising based on their location, support base and their
capacities.[9]
Accordingly, the sources can be categorized into the following categories-
a) Money Laundering: Laundered money has emerged as one of the many sources through which
terrorism is presently being financed globally. Often in money laundering, the
funds are illegally sourced, injected into the financial system and carefully
spread to several destinations. This is done in an effort to obliterate its
source or make the source disappear beyond tracing, then collated to a common
pull and make the money appear genuine. In some other cases, the laundered
funds are carefully secluded to bypass official financial systems of money
transaction. The idea is also to conceal their origin and ultimate destination.
Incidentally, India and Nigeria are sources, transit routes and destination of
laundered funds. Commendably, in response to the United Nations to its member
states to take steps to criminalize money laundering, India and Nigeria enacted
the Prevention of Money Laundering Act 2002 and Money Laundering (Prohibition)
Act 2011(as amended), respectively and other Rules and Regulations.[10]
b) State Funding: As the title implies, this includes
financial supports from State entities exclusively set aside for funding
terrorist activities. It is very disheartening that some nations no longer hide
their sympathy and embracement of terrorism as part of their international
policy directive. It could be a form of revenge taking on other States but it
seems that the main driving force of States that sponsor terrorism is to gain
relevance and/or strategic plan in the comity of nations. This is unlike the
non-affiliated terrorist groups that seek media popularity, attention and
intimidation of the victim states.
The United States had identified
Sudan, Iran and Syria as “State Sponsors of Terrorism” because they have
constantly provided supports for acts of international terrorism.[11] Iran is said to be the
most active supporter of anti-Israeli terrorists and financier of Hezbollah
Militias (of Lebanon) as well as Palestinian terrorist group – HAMAS etc with
millions of US Dollars per annum.[12] On the current list of US
State Sponsors of Terrorism are Cuba, Iran, Sudan and Syria.[13]
c) Individual or Internal-Funding: In self-funding, terrorist groups source for
financial supports among themselves through their spread-out networks. Some of
them are well grounded criminals and can engage in all sorts of criminalities
to raise money. Individuals and wealthy sympathizers in their locations can and
do donate heavily to support them. In Nigeria, for instance, the then President
of Nigeria– Dr. Goodluck E. Jonathan in 2012 raised alarm that the Islamic terrorist
group - “Boko Haram” sympathizers had
infiltrated his government and security agencies. That they were offering
financial and intelligence supports to the dreaded group.[14] This idea of individuals
financing terrorism is not peculiar to Nigeria. It happens in other parts of
the world. Some of them have been identified and placed on the watch list of
Global Terrorist financiers by the US Treasury Department as Specially
Designated Global Terrorist. Those individuals have equally been blacklisted by
the United Nations and included their names in U.N. Al-Qaeda and Taliban
Sanctions Consolidated List of terrorists.[15]Other group of terrorists’
apologists and sympathizers comprises of politicians, merchants, religious
leaders and businessmen some of whose sources of wealth are questionable.
d)
Cyber Criminality: Undoubtedly, cyber criminals, who
also constitute the cyber terrorism, are part of terrorist syndicates. Part of
monies they realize from such activity also goes into the financing of terror
activities and the overall financing of terrorism network. When cyber criminals defraud their victims
online or by attacking the data base of organizations and collect for ransom as
condition to rescind their threats, they channel the proceeds to their partners
in crime, who then use them to execute the actual or overt acts of terrorism
around the world.
e) Trafficking in Drugs – Drug trafficking is a very lucrative but nonferrous criminal activity
that has become a money spinner over the years. The United Nations Office on
Drugs and Crime (UNODC) 2015 Afghan Opium Survey Report 2015 and Afghan
Ministry of Counter Narcotics figures has it that in 2015, potential opium
production in Afghanistan amounted to 3,300 tons.[16] That was put at 19%
decrease in the cultivation of hard drug called opium poppy, compared to the
previous years. According to the Survey, Taliban government in Afghanistan has
been heavily funded by the opium trade over the years.[17] It is said to have high
profit yielding capacity that the Afghan terror masterminds are financially
relying on the source. According to the UN, due to the fact that cultivation of
opium poppies is a free for all ventures, dangerous drugs are regularly churned
out and marketed to several parts of Europe, Asia and Africa. Young men and
woman are said to be recruited to distribute the drugs and return the proceeds
back to the barons based in Afghanistan and Pakistan.[18]
f)
Other
Sources: The above are by no means exhaustive. Terrorists obtain their
funding from many sources. Sponsorship could be internally or externally
sourced.
At the various national and local levels, funds are daily
being generated for terrorists. Now that they are decentralizing and unbundling
among themselves, lone actors also source their funds wheresoever and
howsoever. Some of the sources are exclusive to them and yet to be discovered
by the State security intelligence. For instance, in place of raw cash
donations, weapons and equipments may be given to the terrorists by some of
their sponsors.[19]
Other fund raising avenues include places of worship, smuggling and selling of
arms, ammunitions and light weapons to illegal possessors, abductions and
ransom demanding. The later is popular ‘modus’ in Nigeria even though a clear
link has not been established between the abductors and the only local
terrorist group operating in the north- the Islamic “Boko Haram”. Terrorists
also go on sea pirating as a means of raising funds for the execution of their
evil enterprise. ‘Al-Shabaab’ of Somalia takes to the Indian Ocean, Gulf of
Aden and Red Sea to terrorize ships.
4.
TERRORIST
FUNDS TRANSFER MECHANISMS
To effectively operate, timely movement of terrorist funds is of utmost
important to terrorist groups. If they source out the funds but unable to move
them, their activities will be crippled. The channels they employ are complex
and based on utmost confidentiality. With active connivance, terrorist funds
can be moved through the normal financial system transfers, physical cash
movement through cash courier, raw and bulky cash smuggling, through bureau de
change operators, hawala systems
etc. The main sources will be elaborated
further.
a)
NGOs, Charities and Foundations- the raised funds could be
channeled by proxy. The proxy means is usually by using legal or illegal
companies, humanitarian agencies, foundations, charitable organizations and
non-governmental organizations or even camouflaged as scholarship funds for
students to study abroad. The Palestinian Liberation Organisation (PLO) does send funds overseas, to
their affiliate terrorist groups in Europe, through Palestinian students
travelling abroad.[20] It will be recalled that
in Egypt in the year 2012, thirteen (13) United States citizens were arrested
and put on trial because they were operating NGOs with money from their home –
the US. The allegation was that they were funding and supporting local domestic
insurgents to promote violence with the intention of destabilizing Egyptian
peace and security. Even though they were eventually released courtesy of US
diplomatic pressure, the deed had already been done.[21]
In India, the National Investigative Agency and other relevant security
agencies had discovered huge inflow of foreign currencies into the State of
Kerala through some proscribed associations. The report has it that there was
secret link between the Islamic
Movement of India and the Indian Mujahedeen[22] and some internationally designated
terror groups based in Saudi-Arabia like the Harkat-ul-Ansar and its subordinate
arm- Jamayyat-il-Ansar among others.[23] The Ansaru is among the proscribed
groups in Nigeria. More are yet to be uncovered.
Since the discovery of dishonest NGOs that have become terrorists’
financing transits in Nigeria, the Government devised means through which
legitimate charities, foundations can now avoid any link with terrorist groups
and their activities to maintain their goodwill. The step taken by the
government included the issuance of best practice guidelines that covers all aspects of their activities,
from registration, organization, branches and partners.[24] This measure is recommended
to India.
b) Cash Smuggling – Terrorists are progressively gaining grounds globally. In the same
manner, their networks of sympathizers are equally expanding. Due to the many
legal measures placed on financial systems on cash movements and transfer
reporting obligations, the syndicates have devised other means to beat the
legal nets which includes physical cash smuggling. Terrorists apply tactics
similar to those of other organised criminal groups. Apart from cash smuggling, they also utilize
cash deposits, electronic funds transfer and withdrawal alternatives like use
of ATM and credit cards.
c)
The ‘Hawala’ and other means- It is a sort of underground banking
and an alternative financial remittance system that is associated with ethnic
groups from Africa, Asia and Middle East.
Centuries ago, before the advent of the present Western financial system
to aid secure and convenient movement of funds, ‘hawala’ is said to have been introduced in China and India.[25] Businessmen wishing to
send funds to their home countries were said to normally deposit the money with
a ‘hawala’ ‘banker’ usually owned a trading business who would charge little
commission.
The system is still in vogue. Because of the legal clampdown on money
laundering worldwide and since ‘hawala’ is unregulated by governments, it seems
to have become one of the preferred vehicles for the movement of terrorist
support bound funds. Since it involves the international transfer of value
outside the legitimate banking system and undocumented, it’s very attractive to
terrorist groups.[26]
5.
RELEVANT
LEGAL FRAMEWORKS ON TERRORISM AND MONEY LAUNDERING
Both India and Nigeria have
taken legislative measures to prevent, criminalize and punish perpetrators of
terrorism financing and, in extension, money laundering. In India, some provisions of the Unlawful
Activities (Prevention) Act, 1967 addresses the menace of terrorism financing.
There is also The Prevention of Money Laundering Act.[27]
In Nigeria, some provisions of the Terrorism (Prevention) (Amendment) Act, 2013
are relevant in addition to the Money Laundering (Prohibition) Act, 2011, Rules
and Regulations.[28]
a) India
The Unlawful Activities Prevention Act, 1967
Section 7 empowers the Central Government to make a prohibitory order
against the use of funds of an unlawful association if, after conducting
inquiries, it is satisfied that any person is in custody of monies which are
being used or intended to be used to finance the activities of an unlawful association.[29] This is can only be done
after the notification declaring an association as unlawful under section 3
UAPA has become effective. By way of fair hearing, any person aggrieved by the
prohibitory order can exercise his/her right of action by applying to the Court
and prove that the money is not intended for the use of an unlawful
association’s activities. A District Judge within the jurisdiction can hear and
determine such application.[30] Section 11 makes
provision for penalty for dealing with funds of an unlawful association. Doing
so attracts imprisonment for a term which may extend to three years, or with
fine, or with both. Notwithstanding anything contained in the Code of Criminal
Procedure,[31]the
court trying such contravention may also impose on the person convicted an
additional fine to recover the laundered
amount.
The Prevention of Money Laundering Act, 2002.
The Prevention of Money Laundering Act[32] came into force on the 1st
day of July 2005. The offence of money laundering is captured under section 3
of the Act thus:
“Whoever directly or indirectly attempts to indulge or knowingly assists
or knowingly is a party or is actually involved in any process or activity
connected with the proceeds of crime and projecting it as untainted property
shall be guilty of offence of money laundering.”
Unlike the Nigerian MLPA section 15,
the above provision is dynamic because the type of punishment to be meted out
is not stereotypically provided. It depends on the facts and gravity of the
offence committed by the offender. The
Act envisages attachment of the laundered property as the first step, then
confiscation of the property of the convict. Indeed, every case ought to be
determined by its merits and circumstances. However, it confers lots of
discretion on the adjudicatory authority[33] and may stand the risk of
improper exercise of judicial discretion. But if this happens, the Appellate
Tribunal can be taken recourse to under section 35.
In Gautam Khaitan & Anr v Union of India & Anor.,[34]
the petitioners invoked Article 226 of the Constitution of India to assail an
order passed by Deputy Director in the Directorate of Enforcement (DOE). The order
was passed under section 5(1) of the Prevention of Money Laundering Act, 2002 (the
PMLA) to provisionally attach properties of petitioners which, according to the
respondents, represent proceeds of crime.
After through examinations
of the facts-in-issue, the Court found that at the stage of issuance of an
order of provisional attachment, no recourse could have been taken to a writ
petition under Article 226, merely on the ground that no notice was issued or
that no opportunity of hearing was given before passing the order of
provisional attachment.
The court reasoned that a post facto hearing has been provided in
the aftermath of a provisional attachment being ordered. Section 8 of the PMLA,
provides for a full dress hearing and for grant of complete opportunity to the
aggrieved party in that behalf. That the legislature's intention, in the manner
in which sections 5 and 8 of the PMLA are structured, made that amply clear.
The court did not find any merit in the writ petition and accordingly dismissed
it.
b) Nigeria
Terrorism (Prevention) (Amendment)
Act, 2013.
Section 5 of
the Act prohibits the act of soliciting and giving support to terrorist groups
for the commission of terrorism. Under sub-section (2), anyone who
intentionally renders support for the commission of act of terrorism is liable
on conviction to imprisonment for a term not less than twenty years.
The foregoing section generally covers all manner of supports rendered to
terrorist groups for the commission of acts of terrorism. While the intention
of the supporter in rendering the support is an ingredient of the offence,
however, it is immaterial whether it was directly done or not and, in the case
of financial assistance, whether the finance solicited for was eventually
collected or not. The section is very
apt, comprehensive and in compliance with the UN Terrorist
Financing Convention.[35] The punishment is also
deterring enough so that at the end, justice will not only be served but seen
to have been served. However, the Nigerian State must make concerted efforts to
transform the law from the book to law in action. No one has been convicted
under this provision, yet the “Boko Haram” and ‘Ansaru’ are having field days in
the North-eastern Nigeria and nothing to show that they are lacking supports.
What magic are they doing?
Section13
criminalizes financing of Terrorism.
Any person or
entity, in or outside Nigeria, who commits such an offence is liable on
conviction to life imprisonment. For an act to constitute an offence under this
section, it is not necessary that the funds or the property were actually used
to commit any offence of terrorism.
The above section specifically addressed the offence of terrorism
financing, among others. Being more serious, the punishment is also graver than
that for rendering support to terrorist groups – life imprisonment. The
provision is very strict as it criminalizes mere possession of the funds,
provided there is intention on the part of the accused. The provisions of the
section are also extra-territorial. It
is immaterial whether the offence was committed within Nigerian territorial
jurisdiction or not. This provision is very apt as most of the terrorist
fundings are sourced and wired from abroad. An otherwise provision would have
defeated the mischief which the Act is intended to cure.
However, to make the foregoing a reality, extradition treaty between
Nigeria and the- would be foreign jurisdiction is the usual pertinent step to take.
Fortunately, the terrorist funding Convention has simplified this process for state
parties. In order to guarantee efficient prosecutions, state parties are
mandated to assume their jurisdiction over those offences and that is what
Nigeria has done. In the case of offence (terrorism financing) committed
outside the jurisdiction, the principle of defensive jurisdiction applies under
Article 7 of the Convention.[36]
Money Laundering (Prohibition) Act, 2011
This is
Nigerian principal Act for combating money laundering.[37] Money laundering has
already been identified and discussed as one of the sources of terrorism
financing globally.[38]
Section 15(1) of the Act provides that “money laundering is prohibited
is in Nigeria”. The Act pointedly states that any person or body corporate, in
or outside Nigeria, who directly or indirectly conceals or disguises the origin
of funds, acquires, retains, converts or transfers funds or property, knowingly
or reasonably ought to have known that
such fund is or forms part of an unlawful act commits an offence of money
laundering under the Act. The punishment for the offence of money laundering is
an imprisonment term not less than 7 years but may extend upto 14 years.[39]
If it’s a body corporate that contravenes the provisions of the Act, the
fine payable will be 100% of the funds laundered, forfeiture of assets and
risks being wound up and license withdrawal. The directors of the corporate
will not go free. Imprisonment of
between 2 - 3 years and punitive fine awaits such convicts.[40]
Under section 2(1), the Act places legal obligations on individuals as
well as corporate entities to report all international electronic transfers of
funds and securities which are in excess of ten thousand United States Dollars
($10 USD) or its equivalent to the Central Bank of Nigeria (CBN) etc. The
report has to be lodged within seven (7) days from the date within which the
transaction took place. Full details of the transaction must be disclosed e.g
nature of the transaction, amount of transfer, particulars of the sender and
receiver, their addresses etc.[41] Section 3(4) mandates
financial institutions to exercise due diligence and exercise their discretion
well and always watch out for money laundering and terrorist financing
transactions.
c) United Nations
Since aftermath of the historic terrorist attacks on the United States
in September
2001, the United Nations has done so
much in championing the fight against terrorism and it’s financing.[42]
The main objective of the Convention is simply to enhance international
cooperation among States in devising, formulating and adopting effective
measures for check-mating the funding of terrorism through prosecution and
adequate punishment of the perpetrators of acts of terrorism. Doing so is
expected to stabilize international peace and security.
In order to guarantee efficient prosecutions, state parties to the
Convention are mandated to assume their jurisdiction over those offences and
that is what Nigeria has done. In the case of offence (terrorism financing)
committed outside the jurisdiction, the principle of defensive jurisdiction
applies under Article 7. Therefore, the universal jurisdiction ensures that no
offender will escape justice but could be tried and convicted anywhere the
offence was committed under the Convention. State parties to the Convention
have enough latitude to establish their jurisdiction over the offence of
terrorism financing. Under Article 10, state party in the territory of which
the alleged offender is present may elect to submit the case to its competent
authorities for prosecution. It may also extradite that person to another state
party that has established its jurisdiction over the particular case, pursuant
to the provisions of the Convention. Articles 11 and 12 made provisions aimed
at facilitating extradition and mutual legal assistance among State parties to
the Convention.
6.
JUXTAPOSITON
OF THE LEGAL MEASURES AND ASSESSMENT OF ENFORCEMENT EFFORTS.
The men of underworld that engage in terrorism financing in India and
Nigeria, like most other criminals, do use financial systems of the respective
nations to hide the funds they intend to use to support the activities of the
terrorist groups. This is so even if the sources are legitimate. So, the basic
thing which both countries have done was to criminalize terrorism and it’s
financing. This is fundamental in order to prevent their funds from entering
the financial system at all. In the case of India, the relevant provisions of
the UAPA and PLMA have been examined above; and in Nigeria, the relevant
provisions of the TPA and MLPA have also been analyzed above. Though there are still rooms for improvement,
those legal measures have gone a long way in their respective quests to root
out and dry up the sources of terrorists’ finances.
There is a striking distinction between the Indian and Nigerian relevant
legal provisions on terrorism financing. Whereas Nigerian laws talks of funds
to be solicited for, collected, received, possessed, to be made available etc,
the Indian laws lays more emphasis on the funds of unlawful associations
already in the custody of third parties etc, that are intended to be used for
the furtherance of the objectives of unlawful association. The peculiar
circumstances under which the principal legislations were enacted may have been
responsible for this. For instance, the preamble of the Indian PMLA states that
– “…Till recently, money laundering could not take place in our society without
anybody’s prying eye on it…Nor did they attract the attention of the Government
as they were treated normal…” In order to, somewhat, make the Act have a
retrospective effect, it was couched in such a way to properly address the
mischief and advance the remedy. The only relevant Nigerian legal measure that
has similar tone is the Terrorism Prevention (Freezing of International
Terrorists Funds and other related Measures) Regulations 2013. The Regulations
took care of the steps to be taken in freezing the existing funds of
international and local terrorists in Nigeria.
Both legal regimes are in tandem on confiscation of all direct and indirect proceeds of crime as well as punishment of the culprits. The laws have equally made provisions for the enforcement procedures and/or disposal of the confiscated properties. In People's Union for Civil Liberties & Anor v Union of India,[43] the Constitutional validity of various provisions of the Prevention of Terrorism Act, 2002 were challenged due to its stringency. The Supreme Court of India, inter alia, observed that:
While taking adequate measures to
protect the bona fide rights of innocent third parties, the tainted ones are
not exempted. Properties in the hands of third parties, bodies corporate etc
are subject to attachment, confiscation and forfeiture to the respective
States. By their relevant provisions, both legal regimes also imposed legal
obligations on individuals and financial institutions to report suspicious
money laundering and funds transfers that may have been intended for terrorism
financing to either the Reserve Bank of India or Central Bank of Nigeria, as
the case may be. In the case
of Sodexo Svc India Pvt. Ltd v State of
Maharashtra,[44] the Supreme upheld the
guidelines on Know Your Customer/Anti-Money Laundering/Combating Financing of Terrorism issued by the RBI to Banks, from time to time to Banks
as a means check-mating terrorism financing in India.
Section 3 of the PMLA (India) concurs and rends credence to the earlier
distinctions drawn between money laundering and terrorist financing. That is,
that the origin of laundered money is illegal money for legal enterprise; with
the use of the phrase: “…projecting it as untainted property…” whereas
terrorism financing funds usually originate from legitimate sources for illegal
purposes. That equally coheres with
Section 15 of the MLPA (Nigeria) which used the words: “…directly or indirectly
conceals, disguises the origin…” to describe the offence of money laundering.
Section 15 PMLA pegs the kind of punishment to be meted out on the money
launderers on the seriousness of the offence committed by the offender but will
initially attach the property in question pending the determination of the case
by the adjudicatory authority. The latter may order the confiscation of the
property to the Central Government. If corporate body, the directors of the
company, at the time when the offence was committed, would be presumed guilty
and proceeded against, per section 13.
On the other hand, also Section 15 MLPA punishes money launderers with 7
years minimum and 14 years maximum in addition to forfeiture of all proceeds
(assets) acquired with the laundered money to the Federal Government of Nigeria.
Corporate entities would also forfeit 100% of the funds, assets and risks
having its licence withdrawn plus fine. Its employees are liable to 2 years
imprisonment and fine.
In the Nigerian case of Federal
Republic of Nigeria v James Ibori
& 5 Ors[45]
the principal accused person served as the Governor of Delta State from
1999-2007. At the end of his tenure, he was accused and charged to court for
embezzlement of millions of dollars from the treasury of the State which he
laundered with the connivance of his associates and companies located in
Nigeria and United Kingdom, in contravention of the provisions of the Money
Laundering Act. The prosecution technically lost the case as the court held
that the offence of fraud was not criminalized under Section 15 of the Act[46] on which the charge was
brought. The accused escaped justice and fled to UK where he was again
arrested, arraigned and convicted. The provision has now been amended in the
2011 Act to criminalize money laundering predicate offences.
Section 11 UAPA punishes those tampering with prohibited unlawful
associations’ properties (terrorism funders) with 3 years imprisonment maximum
or fine or both. Whereas Section 5 TPA punishes the offence of giving supports
to terrorist groups with maximum of twenty years and Section 13 penalizes
direct funders terrorism with imprisonment for life. The Nigerian Acts are more
stringent by the prescribed punishments than those of India.
7.
CONCLUSION
AND SUGGESTIONS
Eradicating terrorism financing is an uphill task. This is so because
terrorism itself is very fluid organised crime. Its motivations, methods of
attack and choice of target are very dynamic. The same applies to its
financing.
The bulk of the monies needed by terrorists are channeled towards
establishment and maintenance of their national, regional and international
networks. So, the best and potent means of completely neutralizing them would
be to locate and starve them of their financial inflows, both at the source of
generation and transfer routes. Given its complexity, cooperation with national
governments and between states and organizations at the regional and
international levels are essential to effectively combat terrorism and its
funding.
States must be ready to share best practices and lessons learned and to
assist with investigation and prosecution of terrorism related cases beyond
their respective jurisdictions.
It is finally submitted that what is most needed in the
counter-terrorism financing crusade is a much improved intelligence gathering
capability by the various and combined security outfits in order to outsmart
and completely overwhelm those forces that not only do not wish India and
Nigeria well but are bent on destabilizing their body polities. It is the
superior and better coordinated intelligence gathering that will facilitate and
transform this from mere wishful thinking to reality.
The points below may further be noted as humble suggestions on combating
terrorism financing-
a)
Strong
synergy building and collaboration between the states. Since terrorism and its
funding are transnational, no State is immuned from the attacks.
b)
Spirit
of patriotism need to be inculcated in the respective citizens. This will make
them cooperate and pay true allegiance to the respective government’s
anti-terrorism financing efforts.
c)
Any
strategy for check-mating terrorism financing in India and Nigeria need to be
more comprehensive, all-encompassing, multi-prolonged but dynamic, constantly
reviewed and priority driven.
d)
Excessive
militarization of terrorism and its financing combats will not better address
the issues at hand. It should be blended with non-military or civil
solutions.
e)
Measures
should cover precautionary, mitigative, reprieving and rehabilitative actions
anchored on strong institutions.
[1]
UNGA Resolution 54/109
(9.12.1999), hereinafter the “Terrorist Financing Convention”.
[2] Ibid. article
2(1) defined terrorist financing to include the provision or collection of
funds with the intention that
the funds will be used to carry out a terrorist act.
[3]
Sections 13(1) and 5(1) &
(2) Terrorism (Prevention) (Amendment) Act, 2013.
[4]
Section 15(2) and (3), Money
Laundering (Prohibition) Act, 2011 (as amended). If a corporate body, a fine
not less than 100% of the funds and
forfeiture of any property acquired and withdrawal of licence – sub.(4). Directors/employees of the company
risks imprisonment of not less than 2 years or punitive fine or both, under Section 16(2).
[5]
1967 (as amended up to 2012).
[6]
2002
[7]
The Governor of Borno State
(Nigeria), Alh. Kashim Shettima has publicly supported this assertion; saying that the Islamic “Boko Haram” terrorist sect that has been
terrorizing Nigeria since 2009 was better armed, equipped and motivated (paid) than Nigerian troops. See Ogala Emmanuel,
“Jonathan Slams Borno Governor
over Comment on Boko Haram”, Premium
Times, 25 February, 2014. <http://www.premiumtimesng.com/news/155704-jonathan-slams-borno-governor-over-comment-on-boko- haram.html >
[8]
Shapiro Ari, “Obama Stays the
Course on Terrorist Financing”, pp.1-4 (2009). Also available at (visited last 12.04.2016).
[9]
Sharma S K., & Behra Anshuman, Militant
Groups in South Asia, New Delhi; (Institute for Defence Studies and Analyses and Pentagon Press, 2014)
113.
[11]
See “State Sponsors of
Terrorism”, <http://www.state.gov/j/ct/rls/crt/2014/index.htm>
(April 2015); <https://www.google.co.in/?gfe_rd=cr&ei=eWHlVraLGMSBoAOppYHYBg&gws_rd=ssl#q=designated%20state%20sponsors%20of%20terrorism>
[12]
Ibid.
According to the report, Iran did not cease in its support of global terrorism
mainly through its Islamic Revolutionary Gard Corps-Qods Force (IRGC-OF). Such
groups included the Lebanese Hizballah, other Iraqi Shia militant gangs –Hamas as well as the Palestinian
Islamic Jihad. As if those are not enough, Iran, Hizballah and other Shia militias also continued to provide
financial and military hardware supports to the
Syrian Asad’s regime thereby
boosting its capacities and capabilities to fight on and sustained the civil war
longer.
[14]
Editorial, “Nigeria’s Goodluck Jonathan: Officials Back Boko Haram” BBC News Africa, (January 8, 2012). < http://www.bbc.com/news/world-africa-16462891>
[15]
Jimmy Gurule, Complex Criminal
Litigations: Prosecuting Drug Enterprises and Organized Crime, p. 120 (Lexis Law Publishing, USA, 2000.
[16]
UNODC, “After Six Years on the rise, Afghan Opium Crop Cultivation Declines:
New UNODC Survey” released in Dec.
2015. <https://www.unodc.org/unodc/en/frontpage/2015/October/after-six-years-on- the- rise--afghan-opium-crop-cultivation-declines_-new-unodc-survey.html>
[18]
Sam Chukwuka Onyeka, Anti Money
Laundering & Combating The Financing of Terrorism in Nigeria, p. 56 (Transparent Protection Ltd/Gte, Lagos, 2014).
[19]
Inameti B Yellow-Duke, Terrorism! A Tool
for the Weak? P.55 (Solace Music & Media Production, Jos 2013). A
Nigeria based Lebanese by name – Talal Ahmed Roda was convicted (on 15.11.2013)
of conspiracy and importation and
stock-pilling of assorted arms and ammunition into Nigeria for terrorist
activities. See Federal Republic of Nigeria v Mustapha Fawaz (Unreported) Charge
No: FHC/ABJ/CR/112/13, delivered
(29.11.2013), per Justice A.F.A Ademola.
[20]
Inameti, supra note 19 at 55-56.
(06.11. 2012).
[23] Nanjappa, Vicky. "How SIMI set up terror shop in Kerala once again
with ease." Rediff.com. (08
March 2011) <http://www.rediff.com/news/report/how-simi-resumed-keralaoperations-with-ease/20110308.htm>
[24]
See Nigerian Financial Action
Task Fund (FATF) Recommendation 8, 2002.
[25]
Supra, note 18 at p. 58.
[27]
2002. There are Rules made
pursuant to the enabling Act. For instance- The Prevention of Money Laundering (Maintenance of Records of the Nature and
Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and
Verification and Maintenance of Records of the Identity
of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005, etc
[28]
Money Laundering (Prohibition)
Rules 2011 and Terrorism Prevention (Freezing of International Terrorists’ Funds
and Other Related Measures) Regulations, 2013.
[29]
Section 7(1) – (6) of the
Unlawful Activities (Prevention) Act, 1967. Hereinafter “UAPA”.
[30] Ibid.
Section 7(4).
[31] 1898 (Act 5 of 1898);
particularly section 3. See also Shruti Bedi, “India Counter
Terrorism Law”, (LexisNexis,
Haryana, India, 2016) 223.
[32]
Hereinafter referred to as
PMLA
[33]
See section 8. PMLA
[34] W.P.(C) 8970/2014, Judgment delivered on ( 04.02.2015)
[1 - 2], <http://indiankanoon.org/doc/8302443/>
[36]
infra. Details of the provisions of the Convention
will be highlighted under the heading “United Nations”.
[37]
The Money Laundering
(Prohibition) Act, 2011 (as amended). Hereinafter ‘MLPA’.
[38]
Supra. Page
4, under the heading “Terrorism
Financing: Sources of Funds and Funders”. The definition of money laundering has equally been
attempted and distinction between money laundering and terrorism financing. See page 2 supra.
[39]
Section 15(3).
[40]
Section 16 (2)
[41]
Section 2 (2) MLPA
[42]
Many legal instruments and
institutions have been evolved and recommended to Member States by UN to combat terrorism financing. Some of
the relevant ones are: Financial Action Task Force (FATF) and Special Recommendations 2003; 1999
International Convention for the Suppression of the Financing of Terrorism; The Wolfsberg Group guidelines on The
Suppression of the Financing of Terrorism; World
Bank guidelines on Anti-Money Laundering; UN Convention against Illicit Traffic
in Narcotic Drugs and
Psychotropic Substances (1988); UN Security Council Resolution 1373 etc.
[43]W.P.(C) No. 389/2002 & W.P.(Crl) No. 89/2002 decided (16-12-2003) [37]. Per Rajendra Babu, J; <http://indiankanoon.org/docfragment/110957682/?formInput=W.P.%28C%29%20No.%20389/2002>.
[44] Civil Appeal Nos. 4385-4386 of 2015; decided on 9-12-2015 [6], <http://indiankanoon.org/doc/179384336/>
[45]
Charge No. FHC/ASB/IC/09
(Unreported) judgment delivered on (17-12-2007) per Justice M.Awokulehin.
[46]
The provision criminalized the
offence of converting, transferring resources or properties derived directly or
indirectly from illicit
traffic in “narcotics drugs and psychotropic substances” or any other crimes or
illegal act with the aim of concealing
or disguising the illicit origin. Court held that the prosecution must first and foremost establish
link that such funds were directly or indirectly obtained in the course of illicit
traffic in “narcotics or psychotropic substances”.
Comments
It has gone in for peer-review. Am optimistic that it will scale through and get published in a reputable law journal soon.
NIGERIA: A COMPARATIVE APPRAISAL
Hyginus Uchenna Okoronkwo
See P.137, Vol.2, Issue 2, International Journal of Legal Research & Governance (IJLRG) 2016.