Economic and Financial Crimes Commission: Its Impact in the Real Estate Sector

ESV Effa Imoh Okim, CFE, PMP, ACIN

The Economic and Financial Crimes Commission (EFCC) was established in 2003, amended in 2004 charged with the responsibility for the enforcement of all economic and financial crimes laws, among other things. Due to various government efforts to comply with International best practices and guidelines under The Financial Action Task Force ( FATF) and United Convention against Corruption (UNCAC) to establish the Commission to fight Money laundering and other forms of economic and financial crimes. This was a positive response by government, which came at a time when FATF had named Nigeria as one of the 23 Countries that were non-cooperative in the International Community’s efforts in the fight against money laundering activities

Since the establishment of this anti-corruption agency 20 years ago, the commission has been playing critical roles in all sectors of the Nigerian economy. With a mandate to combat financial crimes as the name implies, the commission has, in no small measures, helped in the arrest and prosecution of individuals and organisation indicted for corrupt practices, and recovery of illicit funds from private business concerns and government officials.

However, In the real estate sector of the Nigerian economy which is one of the major contributors to the Nigerian Gross Domestic Product (GDP), the EFCC has been active in sanitizing this sector, following its discovery that most looted funds in Nigeria are laundered through real estate.

The Commission has, over the years, emphasized the fact that most monies looted and laundered in Nigeria were invested in the real estate sector of the economy. On the 26th of June 2022, the EFCC reported in many print and electronic media houses that it will henceforth focus its attention on the real estate developers and the sector generally, alleging that the real estate industry is providing safe haven for the laundering of proceeds of crimes in Nigeria. Since this announcement, a lot of arrests have been made in this direction. Culprits arrested have been prosecuted, and huge sums of money recovered.

In view of its appreciation of the vulnerability of the sector to money laundering activities, the Commission, apart from its enforcement activities, has also sought to educate players in the sector on their responsibilities in line with extant laws and regulation. One of such key responsibilities is the requirement for enforcement of the Know Your Customer (KYC) rule as applies to the Nigerian business environment.

The Know Your Customer (KYC) policy should apply in all elements of the real estate transaction because of the peculiar nature of the industry.

This liability applies even to the use of property as real estate agents are required by law to carry out some due diligence in letting out their property.

In 2022, the EFCC, through its Executive Chairman, Abdulrasheed Bawa, warned landlords, real estate operators and estate agents on the need to know the background of persons they let their houses to.

This is coming on the heels of the increasing rate of Advance Fee Fraud by young Nigerians who globally defraud innocent people and are always willing to pay the high rent charged by agents and landlords in major Nigerian cities.

The EFCC as an agency that is out to sanitize the Nigerian business environment should be applauded for being a responsible government agency and working hard to change the narratives of the business environment including the real estate sector.

ESV Effa Imoh Okim, is a registered Estate Surveyor and Valuer, works with the Economic and Financial Crimes Commission (EFCC).