NFIU, ESVARBON to Collaborate Against Money Laundry, Crooked Real Estate Practice

Bennett Oghifo

A big plan to curb money laundering and the vanishing act of crooked real estate developers in Nigeria has been hatched by the Nigerian Financial Intelligence Unit (NFIU) and the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). 

This is an onerous and unprecedented move to regulate activities in the nation’s real estate sector where some practitioners launder money and do not honour agreements with prospective homeowners, relying on the loophole that their activities are presently unregulated by the federal government.

The Nigerian Financial Intelligence Unit (NFIU) was formally established in 2004 and became operational in 2005 as a unit of the Economic and Financial Crimes Commission (EFCC). In 2018, the Nigerian Financial Intelligence Unit (Establishment) Act transformed the Unit into an autonomous and independent agency domiciled with the Central Bank of Nigeria.
The NFIU is now an administrative type FIU, which draws its powers from the 2018 NFIU Act, the 2012 Money Laundering (Prohibition) Act (ML(P)A) as amended and the 2013 Terrorism (Prevention) Act (T(P)A).

Thus, the NFIU is the central coordinating body for the country’s Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework.

It is the central national agency responsible for the receipt of disclosures from reporting organisations, the analysist of these disclosures and the production of intelligence for dissemination to competent authorities.

The collaboration between NFIU and ESVARBON is expected to strengthen regulations that will minimise corruption and lift the real estate sector.

Head of Department, Real Estate and NPO, Nigeria Financial Intelligence Unit (NFIU), Moses Azege, who discussed the collaboration at the ESVARBON’s 2022 Valuers’ Assembly held in Abuja last week, said the real estate sector was “attractive for money laundering due to the inadequate regulatory framework, stability in value, big ticket transaction amount, ease of integrating cash into construction, the high transaction volume, cash-induced economy, and little or no regulation,” saying it was no surprise that “the sector is found attractive by money launderers.”

He cited the GDP Report for Q1 2022 published by the National Bureau of Statistics, Nigeria’s real estate sector contributed 5.34 per cent to real GDP amounting to 2.2 trillion.

This, he said, makes the sector a significant employer of labour and underscores the sector’s relevance to all stakeholders, and that in the National Inherent Risk Assessment (NRA) 2016, the Real Estate Sector was noted as highly vulnerable, adding that the sector had an overall threat and vulnerability assessment rating of Medium High (MH)2.

Azege said in the National Inherent Risk Assessment 2022, the inherent risk in the sector was rated very high. Yet, the real estate professionals dominate the activities of the (Designated Non-Financial Business and Professional DNFBP) sector in terms of the value of transactions.

He added that real estate professionals generally have a low understanding of money laundering/Terrorism Financing (ML/TF) risks and their Anti-Money Laundering/Counter Financing Terrorism (AML/CFT) obligations.

But he said all hope was not lost if NFIU and ESVARBON could close the gap and collaborate to reverse the trend, and that going forward, “the NFIU will engage more with ESVARBON as the regulator of real estate practitioners to strengthen their anti-money laundering and countering the financing of terrorism (AML/CFT) oversight function”.

He urged ESVARBON to establish an AML/CFT Committee that will be an interface with relevant authorities and that in the subsequent amendments of its regulations incorporate regulations against money laundering in real estate.

He also urged the ESVARBON to collaborate with NFIU to monitor compliance of its members with AML/CFT requirements.

ESVARBON, he said, should make ML/TF one of the examinable topics for intending new members.

According to Azege, with the collaboration, “ESVARBON, the NFIU, and other stakeholders will be able to explore ways in shrinking the real estate practitioners’ space from quack.”

Some stakeholders in the sector said that the real estate industry has the potential to boost the nation’s economy, but that “some practitioners have not been keeping to the codes and ethics of the profession, hence short-changing the real estate profession and its professionals and the country at large.”

Speaking on the theme of the event, “The Role of Professional Ethics in Nation Building: Estate Surveying and Valuation Profession in Mind”, Gersh Henshaw, the registration board’s chairman assured that, as a foremost regulatory body of the valuation and property profession, ESVARBON shall not relent in promoting best practices of the profession anchored on sound ethical standards, rules and regulations.

He said that the board would continue to deepen societal awareness of the profession and roles of estate surveyors and valuers.

In his keynote address, Dr. Christopher Kolade, who noted that no nation can grow beyond the value it places on its code and ethical practices, said estate surveyors and valuers must do everything in line with their codes of practice.

According to him, the professional values and ethical principles in the code should be the way of life of

professional estate surveyors and valuers, not only in their estate surveying and valuation work, but also in any other activity upon which they embark in their life and living.

“This must be our first conclusion: – that when these professionals do anything important nation building, for instance, they should proceed as demanded of them by their own code of conduct.”

He added that, by living and acting this way, these practitioners would ensure that their professional ethics can influence their nation-building efforts positively.