Senate C’ttee Discovers N30tn Forex Fraud by Banks in 10 Years

•  Says fraud perpetuated by abuse of Form ‘M’

Damilola Oyedele in Abuja

The Senate Committee on Customs and Excise has disclosed that it has uncovered foreign exchange fraud amounting to about N30 trillion, allegedly perpetuated by commercial banks in Nigeria, in the last 10 years.

Following the discovery, the committee has issued queries to all the commercial banks to provide verifiable details on the non-utilisation of forex. The banks were directed to respond to the queries in three weeks.

The Minister of Finance, Mrs. Kemi Adeosun, the Minister of Budget and National Planning, Senator  Udoma Udo Udoma, the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele and Chief Executive Officers of the commercial banks have also been invited to appear before the committee, over the matter, next month.

The Committee Chairman, Senator Hope Uzodimma speaking during a meeting with officials of the Ministry of Finance and the Central Bank of Nigeria wednesday, said the documents which revealed the fraud were obtained from the Nigeria Customs Service.

Emphasising that all Nigerian banks have been involved in the scam,  including banks that have collapsed or have been acquired, Uzodinma added that the fraud was perpetuated through the abuse of customs Form ‘M’ and vessel liabilities of importers.

 “We have been able to also go into the database of the operating system in the Nigeria Customs Service. And we identified Form M by Form M, import by import, vessel by vessel, liabilities of importers and commercial banks that are yet to be handled. We are talking about monies in regions of over N30trillion.

“There is no bank that is exempted. All the banks are involved. Both the banks that are dead and the ones living. The ones that are no more operating were acquired by some banks. So, the activities of those banks that are no longer in operation we have been able to tie them to those that acquired them as part of the liabilities,” the chairman added.

Uzodimma accused the banks of forex manipulation, and alleged that they do not properly utilise the forex given to them by the CBN for importers for the purposes of importation.

Briefing journalists after the meeting, Uzodimma said the investigations was mandated by the Senate at plenary, adding that the committee has therefore been taking its time to thoroughly examine relevant documents.

“The committee started investigation and took time to enter into the import and export value chain and identified supposedly areas of leakages and malpractices, ranging from unutilised Form ‘M’, abandoned Form ‘M’,  partially utilised Form ‘M’,  abandoned

assessments of custom duties and foreign exchange allocation manipulation,” he said.

“And we have been able to give all this information to the various banks who purchased foreign exchange on behalf of the importers to go home and come back to show us evidence utilisation of the forex, failure of which they will be compelled to refund those foreign exchange they bought from central bank or inter-bank, purposely to be used for import. What we are saying in essence is that the amount of foreign exchange government is giving out to commercial banks and importers for the purposes of importation are not being utilised as agreed. In essence making the foreign exchange scarcity scarce in the market,” the senator added.

The development, he said, is unhealthy, as some foreign firms now take advantage to repatriate money out of the country without due process, contributing to the scarcity of forex in the market.

He further explained why his committee queried banks alone, without recourse to the importers stating that the  Foreign Exchange Utilisation Manual prepared by the central bank as a regulation guiding import and export, has entrusted commercial banks with the quantum of responsibilities, because they purchase forex on behalf of the importers.

“So, once you are acting on behalf of somebody,  the offence or the inaction of that person is your own inaction. So, we are now calling the banks because they are supposed to be the gateway for us to enter into the stream. So, by the time the banks who must have carried Know Your Customer programme, they know the address, the places of these importers and they are the people that opened Form M for them. They are the people that purchased these foreign exchange for them. And the regulation requires them to monitor to ensure that these importers pay the correct custom duties on the importation.

“And also, there is what we call Bills for Collection.  It is the responsibility of the banks to know, ascertain, confirm that the documents sent as Bill for Collection that will warrant the release of the forex to the exporter are genuine,” Uzodimma added.