Asset tracing & Recovery, Insights

The Jurisprudence of Non-Conviction Based Asset Forfeiture (Civil Forfeiture) in Nigeria: Constitutionality of the New Knight-Errant Innovated Under the UNCAC

Research shows that between 1980 and 2018, African countries received close to $2 trillion in foreign direct investments and development assistance but recorded over half of that sum, about $1.3 trillion, in illicit financial flows (outflow). Nigeria, South Africa, Democratic Republic of Congo and Ethiopia collectively accounted for more than 50% of illicit outflows from the continent within the same period. According to a report by the Global Financial Integrity (GFI), between the years 2000 to 2008 Nigeria recorded a loss of about $130 billion to illicit outflows. The country suffers a serious case of entrenched institutionalized corruption which has enabled illegal acquisition of assets by politically exposed persons and bureaucrats in a large scale.

Typically, when assets are acquired by illegal means, perpetrators go to great lengths to hide the proceeds of their crime by elaborate money laundering schemes. The experience in Nigeria is that stolen funds are in many instances hidden in offshore financial centers and tax havens. It is evident that criminal acquisition of wealth is a transboundary enterprise. Therefore, an effective solution must involve a multilateral collaboration of states. It is against this background that the United Nations Convention Against Corruption was adopted in 2003, and came into force in December 2005. Nigeria ratified the convention on 24th October 2004. The convention set the global standards on anticorruption laws and made ground breaking provisions on asset recovery, including the innovative Non-Conviction Based Asset Forfeiture (civil) procedure.

UNITED NATIONS CONVENTION AGAINST CORRUPTION (UNCAC)
The UNCAC is divided into 8 Chapters with 71 Articles. The purpose of the convention is to strengthen measures to fight corruption more efficiently, facilitate international cooperation and technical assistance in the fight against corruption and promote accountability in the management of public affairs and public property. In this regard, state parties are obligated to develop and implement effective anti-corruption policies and practices. Article 14 mandates state parties to take measures to prevent money laundering. Accordingly, states are to institute a comprehensive regulatory regime for financial institutions and other persons or bodies susceptible to money laundering. The convention binds state parties to criminalize bribery of national and foreign public officials. Embezzlement, misappropriation and diversion of public property, trading in influence, abuse of functions, amongst others are also criminalized by the convention.

Significantly, the convention establishes the offence of illicit enrichment by Article 20. Illicit enrichment is defined as…a significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income. According to a report on the offence of illicit enrichment by the Stolen Asset Recovery Initiative (STAR), there are five elements to the offence –
1. The offender must be a public official.
2. The increase in asset must have occurred during the period the offender held public office.
3. There must have been a significant increase in the offender’s asset.
4. Intent to corruptly acquire assets must be established.
5. The increase must be unjustified or unexplainable.
It has been argued that the offence of illicit enrichment may be contrary to constitutional standards because it places the burden of proof on the accused rather than on the prosecution, against the constitutional doctrine of presumption of innocence. That the burden of showing legitimacy of assets acquired while holding public office lies on the public officer, the prosecution need only establish the first four elements of the offence while the burden shifts to the defendant on the element of justification.

 

 

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