The federal government Wednesday asked the Federal High Court in Abuja to dismiss a suit which sought a “declaration that the Nigerian Financial Intelligence Unit (NFIU) does not have the statutory powers by its establishment Act to make guidelines for the regulation, monitoring and operation of the State Joint Local Government Accounts or any other account into which funds from the Joint Account are paid into.”
The Office of the Attorney General of the Federation made the plea in a matter involving the AGs of the 36 states, Incorporated Trustees of Nigeria Governors’ Forum and the AGF, NFIU and Nigeria Union of Local Government Employee (1st to 3rd Defendants); and it was argued upon on Wednesday before Justice Inyang Ekwo.
The NFIU had, on May 6, 2019 issued guidelines to stimulate the reduction of crime vulnerabilities created by cash withdrawals from local government funds across the country, beginning from June 1, 2019.
The guidelines, the agency said, include full enforcement of corresponding sanctions against violations.
The guidelines limited the cumulative amount that can be withdrawn from a local government account to not more than N500, 000 daily.
It also directed that any other transaction must be done through valid cheques or electronic funds transfer, among others.
It said that cash withdrawal and transactions from State Joint Local Government Accounts (SJLGA) “posed biggest corruption, money laundering and security threats at the grassroots and to the entire financial system and the country.”
But the state governments had dragged the Attorney-General of the Federation (AGF), the NFIU and the Nigeria Union of Local Government Employees (NULGE) to court as 1st to 3rd defendants respectively.
The plaintiffs (state governments) argued that such directive was in breach of financial autonomy as enshrined in the Nigerian constitution.
It would be recalled that in 2019, the Nigerian Governors Forum (NGF) had approached the FHC presided over by Justice John Tsoho to stop the NFIU’s guidelines from being implemented, but the court declined the request.
While arguing at the resumed hearing, counsel for the AGF, Tijjani Gazali, SAN, said the NFIU had not encroached on the powers of the states or local governments.
In his own submission, counsel for the NFIU, Arthur Okafor, SAN, said the agency acted within its statutory powers to prevent abuse of office and other forms of financial crimes that might arise at the
local government level.
Justice Ekwo has since fixed May 23 for judgment on the matter.