NFIU: Financial intelligence units need disruptive abilities to freeze illicit funds

Hafsat Bakari, chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), says financial intelligence units in Africa need disruptive capabilities to freeze and seize illicit funds.

Bakari spoke on Tuesday in Abuja at the opening session of the FIU Suspension Powers Workshop for West, Central Africa and Eastern and Southern Africa regions.

The two-day workshop is organised by the Egmont Centre of FIU Excellence and Leadership (ECOFEL).

The CEO said reducing the ability of fraudsters to use their illicit proceeds reduces the incentives to engage in crime.

“In the context of the modern, technology-enabled financial services industry, where funds are moved at the touch of a button, it is important that FIUs have these disruptive capabilities in order to ensure that criminal funds can be effectively frozen and seized,” she said.

“One of the key successes for the NFIU has been our ability to deploy these stop orders in the framework of our international cooperation via the Egmont Group to freeze and return funds that are linked to fraud, and in particular business email compromise.”

Bakari said it is also important to consider the ethical and moral limitations to the use of stop orders.

“In particular, as the underlying principle is that of suspicion and not objectively established fact, we must be wary of the risk that legitimate transactions, funds and assets may be subject to these powers. Additionally, without effective controls these powers could be subject to abuse,” the CEO said.

“This is why at the NFIU, we have established clear protocols and procedures for the use of stop orders.

“There must be a clearly demonstrated high level of risk that the funds are likely to be dissipated and/or that the suspicion of criminal linkages are established to a very high level of certainty.”

She added that “no single individual can initiate a stop order and through the use of automation we have effective audit trails in place”.

Speaking with reporters, Lennaert Peek, senior officer at ECOFEL, said the workshop is to ensure that African FIUs share best practices and challenges.

“Seventy percent of the FIUs in the world have suspension powers and today we are sharing the best practices and challenges that come with suspension powers,” Peek said.