By Hassan Olalekan Sherif, Esq[1]

Introduction

The draft guidelines on Anti-Money Laundering and Combating Financing of Terrorism, purportedly formulated by the Nigerian Bar Association (NBA) but now incorporated into the new Rules of Professional Conduct for Legal Practitioners (RPC) is a shift towards self-regulation of legal practitioners and the legal profession in Nigeria by the NBA. The new RPC has created the “Nigerian Bar Association Anti Money Laundering Committee” (NBAAMLC) and purportedly arrogated it SOLELY a number of responsibilities. The new RPC, vide Rule 73, has also declared the NBA as the “Self-Regulatory Body” for the Legal Profession in Nigeria.

In this article, I delved into the potential implications of granting, purportedly or otherwise, “EXCLUSIVE AUTHORITY” to the NBAAMLC and overlooking the presence and role of other registered and unregistered umbrella associations of legal practitioners in Nigeria, especially in matters that relate to money laundering. I also explored the concerns surrounding the jurisdiction of a private association like the NBA and the need for a fair and inclusive approach that accommodates the diverse interests within the legal profession. Additionally, I highlighted the significance of the Body of Benchers and the importance of incorporating its expertise and disciplinary responsibilities, through the Legal Practitioner Disciplinary Committee, as mandated under the Legal Practitioners Act, in shaping the regulatory framework.

It is crucial to examine these issues to ensure that the regulation of legal practitioners in matters of money laundering and combating the financing of terrorism are carried out in a manner that respects the rights of all associations and upholds the highest standards of professionalism and ethical conduct.

The New Rules of Professional Conduct For Legal Practitioners And Its Disconcerting Provisions

While there is a new Rule of Professional Conduct for Legal Practitioners (Rules), it takes effect from January 1st, 2024. I can only strongly and urgently urge everyone, especially legal practitioners to read and thoroughly review the Rules as they contain provisions that I consider to be very “dangerous”. The new RPC was made pursuant to Section 12(4) of the Legal Practitioners Act. It is now Gazette No. 103 in Vol. 110, Government Notice No. 69.

Indeed, the fight against money laundering is a commendable one and must be lawfully and thoughtfully fought. The Rules now consist of a Part II, which addresses the obligations of legal practitioners regarding Anti Money Laundering and Combating the Financing of Terrorism. It establishes the duty of legal practitioners to report instances of Money Laundering and comply with the provisions outlined in this Part. Failure to do so will now be considered as Professional Misconduct and may lead to Professional Discipline as per the Legal Practitioners Act. Refer to Rule 57(2) of the new RPC for more details.

Preliminarily and very importantly, I must state that the fight against money laundering is a noble endeavor, but it is essential to establish robust checks and balances. This ensures that others are not unjustly targeted under the guise of combating money laundering. Striking the right balance between effective measures and protecting individuals’ rights is paramount in this crucial undertaking. Especially for those whose interests may diverge from that of the NBA, it becomes even more important to ensure that they are not unfairly targeted or subjected to undue scrutiny in the guise of a fight against money laundering. Upholding fairness and impartiality are vital to prevent the NBAAMLC from being used as a tool to target perceived adversaries or individuals with conflicting interests.

Rule 59 and 73 of the new RPC are particularly concerning. They cumulatively establish the Nigerian Bar Association Anti Money Laundering Committee (NBAAMLC) and grant it the EXCLUSIVE AUTHORITY to conduct compliance examinations of law firms based on a risk-based approach. The examination reports will be forwarded to the Special Control Unit against Money Laundering (SCUML). Furthermore, the rule states that the examination template will be developed by the NBAAMLC.

Rule 60(4)(a) mandates that legal practitioners must immediately identify and freeze funds, assets, and any other economic resources belonging to individuals or entities listed in the UN Consolidated List or the Nigeria Sanction List. They are required to report such actions to the NBAAMLC, which will then transmit the report to the Sanctions Committee.

Rule 60(4)(b) states that legal practitioners must also report to the NBAAMLC, for transmission to the Sanctions Committee, any frozen assets or actions taken in compliance with the prohibition requirements of relevant UNSCRs, including attempted transactions.

Rule 60(4)(c) stipulates that legal practitioners must immediately file a suspicious Transaction Report with the NBAAMLC, which will then forward it to the NFIU for further analysis of the financial activities of the individual or entity involved.

Rule 60(4)(d) requires legal practitioners to report any cases of name matching in financial transactions to the NBAAMLC, which will then transmit the information to the NFIU, both prior to and after receiving the Nigerian Sanctions List.

Giving My Two Cents

It should be noted that the rule fails to acknowledge that the NBA is not the only registered umbrella association of lawyers. Consequently, members of other lawyers’ associations are now obligated to submit highly sensitive information and documents to the NBA and seek its approval, this has grave connotations.
The rules seem to give exclusive authority and control to the NBA (Nigerian Bar Association) in matters related to Anti Money Laundering and Combating the Financing of Terrorism. This raises concerns about the lack of representation and involvement of other registered associations of legal practitioners in Nigeria.
The creation of the NBA Anti Money Laundering Committee (NBAAMLC) and its sole authority to conduct compliance examinations of law firms may overlook the expertise and capabilities of similar committees or bodies that could be established by other legal practitioners’ associations. This creates an imbalance and limits the opportunity for diverse perspectives and approaches to tackling these issues.
The requirement for legal practitioners to report sensitive information and documents solely to the NBAAMLC may disregard the existence and roles of other associations. It may be more appropriate to establish a collaborative approach involving all registered associations, ensuring proper representation and fair, unbiased, well-checked, and balanced distribution of responsibilities and powers.
The rules do not provide a mechanism for ensuring transparency, accountability, and checks and balances within the NBAAMLC. Without appropriate oversight and accountability measures, there is a risk of potential abuse of power or biased decision-making.
The rules do not adequately address the concerns and rights of legal practitioners who are not members of the NBA or affiliated with other associations. It is important to ensure that all legal practitioners, regardless of their association affiliation, are treated fairly and have their voices heard in matters concerning professional conduct and obligations.
The rules do not outline a process for ongoing dialogue, collaboration, and consultation with all registered associations of legal practitioners in Nigeria. It is crucial to foster an inclusive and participatory environment to gather diverse perspectives and expertise for the effective development and implementation of professional conduct rules.
It is important to recognize that the NBA is an Incorporated Trustees, a private association, and not a government entity or body. Therefore, granting the NBA exclusive powers to regulate money laundering and require compliance from all legal practitioners, regardless of their association membership, raises concerns about the NBA’s authority and the potential infringement on the autonomy of other registered associations.
The rules should consider accommodating the interests and perspectives of all registered associations of legal practitioners in Nigeria. It is crucial to establish a framework that allows for collaboration and input from multiple associations to ensure a fair and inclusive approach to regulating money laundering and combating the financing of terrorism.
The Role of the Body of Benchers

The RPC has now declared the NBA, vide Rule 73, as the self-regulatory body for the legal profession in Nigeria. The section also contains other “interesting” revelations which include that the NBAAMLC is to advise the NBA on the implementing and monitoring compliance of firms or legal practitioners with respect to chapter 3 of the RPC, miscellaneous provisions that contain other equally interesting provisions. The role of the Body of Benchers, which consists of legal practitioners of the highest distinction and is responsible for the formal call to the Bar and disciplining erring lawyers through the Legal Practitioners Disciplinary Committee, seems to have been disregarded in these rules. The expertise and oversight provided by the Body of Benchers should be taken into account to ensure a comprehensive, independent, and balanced regulatory framework. Most definitely, an Act cannot be subjected to the provisions of a rule, neither can the provisions of Rules supplant the provisions of an Act.

It is crucial to recognize the significance of the Body of Benchers (BOB) as a statutory creation tasked with important responsibilities, particularly in disciplinary matters through the Legal Practitioners Disciplinary Committee. Given its role and authority, it would have been essential to involve the BOB more extensively in the formulation and implementation of the rules, particularly in matters concerning money laundering and combating the financing of terrorism.

The BOB, comprised of legal practitioners of the highest distinction, possesses the expertise and experience necessary to contribute meaningfully to the development of comprehensive regulations in the legal profession. By not fully utilizing the potential of the BOB, the rules may miss out on benefiting from the insights and perspectives of a body specifically entrusted with the responsibility of maintaining discipline within the legal community.

Allocating specific additional roles and responsibilities to the BOB, especially in areas related to money laundering and financial crime, would not only enhance its effectiveness but also ensure a more holistic and balanced approach to regulation. The BOB’s involvement would provide an additional layer of oversight and expertise in matters that are critical to maintaining the integrity and ethical standards of the legal profession.

By actively engaging the BOB and leveraging its statutory mandate, the rules could have benefited from the wealth of knowledge and experience within the legal profession’s highest echelons. This would have instilled greater confidence in the regulatory framework and addressed potential concerns about the concentration of power in a single association.

Recognizing the significance of the BOB and its disciplinary responsibilities, it is important to reconsider the allocation of roles and provide avenues for the BOB’s meaningful participation in shaping the rules and regulations pertaining to money laundering and the financing of terrorism.

Conclusion

In conclusion, the new rules of professional conduct for legal practitioners, particularly concerning money laundering and combating the financing of terrorism, have raised several valid concerns and potential flaws. The exclusive authority granted to the NBAAMLC, a body affiliated with the Nigerian Bar Association (NBA), overlooks the existence of other registered associations of legal practitioners in Nigeria. It is essential to ensure that the regulatory framework accommodates all interests and includes mechanisms for collaboration and input from diverse legal practitioners’ associations.

Furthermore, the fact that the NBA is a private association, not a government entity, raises questions about its jurisdiction and ability to regulate lawyers who may not be its members. The rules should acknowledge the presence and rights of other associations, providing a fair and inclusive approach to regulating money laundering.

Additionally, the role of the Body of Benchers (BOB), established by statute and responsible for disciplinary actions through the Legal Practitioners Disciplinary Committee, appears to have been overlooked. Given its expertise and authority, it is crucial to involve the BOB more extensively in the formulation and implementation of the rules, particularly in matters related to money laundering. This would ensure a comprehensive and balanced regulatory framework, benefitting from the insights and perspectives of a body entrusted with maintaining discipline in the legal profession.

To address the concerns raised and enhance the effectiveness of the regulatory framework, it is recommended to allocate additional roles to the BOB, considering its statutory creation and disciplinary responsibilities. This would provide an added layer of oversight and expertise, instilling greater confidence in the regulatory process and fostering a more inclusive approach.

Overall, a collaborative and inclusive approach that acknowledges the role of various associations, including the BOB, is essential for developing a comprehensive and balanced regulatory framework that upholds the integrity and ethical standards of the legal profession in Nigeria.

[1]Hassan Olalekan Sherif is a lawyer and public affairs commentator based in Abuja. Hassan can be contacted at +234 813 254 8364 or reached via his private email address: hassanolalekansherif@gmail.com.