‘Developed Countries Frustrating Reparation Of Stolen Funds’

Prof Bolaji Owasanoye

The battle to recover and repatriate funds stolen from Africa and other developing countries was being hampered by legal constraints put in place by many developed countries, Presidential Advisory Committee on Anti-Corruption said yesterday.

Media report continues:

Its Executive Secretary, Prof. Bolaji Owasanoye, who spoke at Nigeria Labour Congress (NLC) and International Trade Union Confederation (ITUC) Africa Stop Illicit Financial Flows (IFFs) campaign inaugurated in Abuja, said many developed countries were putting in place laws to frustrate the return of such funds.

According to him, many of these stolen funds were, however, being repatriated to developing countries in form of aides, grants, technical support among others probably out of moral guilt.

Saying the United Nations (UN) Convention on corruption, which many countries signed on stipulates that such funds were returnable, Owasanoye said the campaign to stop IFFs was just the beginning of the struggle for asset recovery “because when you eventually identified what has been stolen and you want to get it back, that is a big trouble”.

He said: “When NLC and other stakeholders identify what has been taken away and ask the recipient countries to return it, you then begin to see all forms of legal obstacles, which we are facing now.

“This is first the beginning of the conversation to say you are killing us and we need to stop the bleeding.

“When we recognize and put some measures to stop the bleeding, the next is to say let us have the resources returned; then you begin to have all manners of problem. That is why the issue of asset recovery has become an issue of global concern. Some countries are presently passing laws to make asset return almost impossible.

“There are countries that if your money get there, you cannot get it back by law. They will agree with you that it was stolen from your country, but you can’t get it back. That of course is legalizing the recipient of stolen property, because in basic common law, both the thief and the receiver of the stolen goods are equally guilty.

“This is another level of advocacy that we all need to prepare to fight. You may be aware that Nigeria has been having trouble recovering assets that have been identified to be returned to us. All manner of obstacles have been put on the way to have them returned.

Owasanoye said: “A lot of people focus on corruption and activities of politically exposed persons, who occupy public offices. But even worse is the work of the private sector, which many of us do not even understand because of the complexity of this sector.

“Corporations explore either weak regulatory structures or put undue pressure on government in the name of we want investment for them to pay less tax than they ought to pay or get waivers than they do not deserve; they explore weak infrastructure.

“For example, there are companies, who lift oil in Nigeria and under-report what they lift and declare exactly what they are carrying when they get to where they are going because they cannot lie when they get there. When you under-report, you have stolen our money because you have paid less than what you ought to pay.

“They also explore systemic corruption by shifting profit from the books of Nigerian companies to the books of tax havens and by so doing, you pay less tax to the Nigerian government. They have stolen our money because corporate tax in Nigeria is 30 per cent.

“There is also tax evasion. There are many ways corporations actually bleed the country. We are told about trade mispricing, there is transfer pricing, under-invoicing and over-invoicing.

“Multinationals claim to be buying spare-parts for their plants in our country. In the global market, it may cost US$10. But when they are buying from their own country to come and produce in Nigeria, they claim it is US$100. You have already inflated the price and has cost the Nigerian company US$90 for each of those items. By doing that, you have already taken part of your earnings out of the country through over-invoicing and when it is time to export, they over-invoice.

“According to World Bank data, less than five per cent of funds stolen from developing countries ever gets returned and the rest just stayed on the other side and it comes back under different guise such as aides, technical support among others.

NLC President Ayuba Wabba attributed the under-development in Africa to IFFs, adding that despite the enormous potential of Africa, it remained backward because funds taken out of the continent were not accounted for.

This, he said, had become a major challenge, stressing that the congress will partner with government to fight corruption.