Bribery, Money Laundering and the Accountant as Expert Witness

This topic brings together three subjects that an accountant meets in practice. The first is bribery, the offence of paying or taking money to bend a public officer’s duty. The second is money laundering, where the law makes banks, businesses and professionals watch the movement of money.

The third is electronic evidence, because modern fraud leaves its trail on computers, phones and cash machines, and an accountant may be called to explain it as an expert witness. All three produce list questions, and the money laundering figures are the ones students most often mix up.

This topic covers the offence of bribery and the difference between sections 98 and 116 of the Criminal Code, the money laundering rules (cash limits, transfer reports, customer identification, suspicious transactions, mandatory disclosure, surveillance, offences), the admissibility of computer and electronic evidence under the Evidence Act 2011 (section 84, email, websites, GSM phones, ATMs, e-signatures, recordings), and the accountant as an expert witness.

Bribery

The offence

Bribery is an offence of official corruption. The Criminal Code deals with it in two sections, and the examiners have asked for the difference. The section numbers are 98 and 116.

Elements common to both sections

1. Several ways to commit it. The officer commits the offence if he corruptly asks, receives, obtains, or agrees or attempts to receive or obtain the bribe. A mere request without receipt is enough. If he asks and later changes his mind and does his duty, he is still liable, though this may reduce his punishment.
2. Corruptly. The bribe must be given or taken with the intent, of the giver, the taker or both, that the officer be deflected from his duty.
3. Property or benefit. There must be offered, demanded or received any property or benefit of any kind for the officer or any other person, on account of something already done or omitted, or to be done or omitted, by the officer himself, not by a third party.

The Independent Corrupt Practices and Other Related Offences Commission (Independent Corrupt Practices and Other Related Offences Commission (ICPC)) is now vested with powers to investigate and prosecute official corruption under the ICPC Act 2003.

Statutes that contain provisions against bribery

May 2015 asked for four. The examiners listed:

• the Criminal Code
• the Penal Code
• the Corrupt Practices and Other Related Offences Act
• the Economic and Financial Crimes Commission Act
• the NAFDAC Act
• the Money Laundering (Prohibition) Act

How the examiners have asked it

• May 2016 and November 2017 asked for a short explanation of bribery (2 and 3 marks): a form of official corruption committed where a public officer corruptly asks for or receives a benefit to act or not act in his official duty.
• November 2021 gave Adamu, a public officer whose duties relate to the administration of justice, caught on camera corruptly asking a person for money. He may be charged under section 116, with a maximum of 14 years.
• March/July 2020 Section A asked for the maximum prison term for a public officer found guilty of bribery, and the answer was seven years, which is the section 98 maximum.

Money laundering

The current law is the Money Laundering (Prevention and Prohibition) Act 2022. It prevents money laundering by limiting cash payments, regulating over-the-counter exchange transactions, requiring proper identification of customers, and empowering the competent authority to place surveillance on certain bank accounts. Section A of November 2023 asked which item is not an aim of the Act, and the answer was “prescribing foreign currencies that are acceptable in Nigeria”.

Cash payment limits (section 2)

Except in a transaction through a financial institution, no person shall make or accept a cash payment greater than:

• ₦5,000,000 or its equivalent in the case of an individual; or
• ₦10,000,000 or its equivalent in the case of a body corporate.

International transfers (section 3)

• A transfer to or from a foreign country of funds or securities greater than US$10,000 or its equivalent must be reported, within one day of the transaction, to the Nigerian Financial Intelligence Unit (NFIU), the Central Bank of Nigeria and the Securities and Exchange Commission (section 3(1)).
• Individuals who carry cash or negotiable instruments in excess of US$10,000 into or out of the country must declare it to the Nigeria Customs Service (section 3(3)).

Be careful with the time limit. The current syllabus and the November 2023 solution say one day under the 2022 Act, and they name SCUML, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) as recipients.

The solutions for earlier diets (for example May 2019 and May 2018), written under the older Act, said seven days, and named the CBN and SEC. For a question that refers to the 2022 Act, use one day. If it refers to the 2011 Act, use the wording of the question and state your assumption.

Identification of customers (section 4)

A financial institution and a designated non-financial business and profession (DNFBP) must:

1. identify the customer using prescribed identification documents;
2. identify the customer using independent source documents, data or information;
3. identify the beneficial owner through reliable sources; and
4. act reasonably to ascertain that a person acting for a customer has the authority to do so.

They must take customer due diligence measures when establishing business relationships; when carrying out occasional transactions above the thresholds, whether single or linked; when money laundering or terrorist financing is suspected, even below the threshold; when there is doubt about the veracity or adequacy of earlier identification data; and when carrying out occasional wire transfers.

• Casual customers must be identified for any number or manner of transactions, including wire transfers, exceeding US$1,000, if the total is known at the start or as soon as it is known to exceed that sum (section 4(5)).
• Where the institution suspects, or has reasonable grounds to suspect, that the amount is the proceeds of crime, it must require identification even below US$1,000 (section 4(6)).
• Sections 4(7) to (9) set due diligence rules for politically exposed persons, foreign and domestic.

November 2016 asked for “proof of identity” with an example for each type of customer. The examiners’ point was that a financial institution must keep its customers’ particulars.

Special surveillance of certain transactions (section 7)

A transaction is deemed suspicious where it:

1. involves a frequency that is unjustifiable or unreasonable;
2. is surrounded by conditions of unusual or unjustified complexity;
3. appears to have no economic justification or lawful objective;
4. is inconsistent with the known transaction pattern of the account or business relationship; or
5. in the opinion of the institution involves the proceeds of criminal activity, an unlawful act, money laundering or terrorist financing.

The institution must report the matter to the NFIU immediately. Under section 7(2), within 24 hours after the transaction it must draw up a written report with all relevant information and the identity of the principal and any beneficiaries, take appropriate action to prevent the laundering, and report the transaction and the actions to the NFIU.

May 2024 asked for two transactions requiring special surveillance (4 marks), and the examiners gave frequency, unusual complexity and no economic justification. November 2020 asked for four.

Mandatory disclosure (section 11)

A financial institution or DNFBP must report in writing, within seven days, any single transaction, lodgement or transfer of funds in excess of ₦5,000,000 (individual) or ₦10,000,000 (body corporate). The report goes to the NFIU in the case of a financial institution, and to the Special Control Unit Against Money Laundering (SCUML) in the case of a DNFBP.

This applies despite anything in any other law, which is why the Act creates an exception to the duty of secrecy. A contravention is an offence punishable by a fine of at least ₦250,000 and not more than ₦1,000,000 for each day of the contravention.

Surveillance of bank accounts (section 15)

A competent authority, under an order of the Federal High Court, may, to identify and locate proceeds, property or objects relating to an offence under this Act, the Economic and Financial Crimes Commission (EFCC) Act or any other law:

• place any bank account, or comparable account, under surveillance;
• obtain access to any suspected computer system; and
• obtain communication of any authentic instrument or private contract, with all bank, financial and commercial records, when the account, telephone line or computer system is used by a person suspected of taking part in a transaction involving the proceeds of crime.

Offences and jurisdiction

The Act imposes heavy penalties, which vary with the kind of offence, whether the offender is an individual or a body corporate, and whether it is a first or repeat offence (sections 18 to 22). The Federal High Court located in any part of Nigeria has jurisdiction.

In May 2023 the examiners asked for the punishment for laundering drug money: an individual faces a minimum of four years and a maximum of 14 years in prison, and a corporate body faces compulsory winding up and forfeiture of its assets to the Federal Government.

Computer and electronic evidence

Background

Before the Evidence Act 2011, computer and electronically generated evidence was almost impossible to admit, because the repealed Act had no provision on it. Under the 2011 Act it is admissible, subject to conditions. Section 258(1) defines a computer as any device for storing and processing information, and a reference to information derived from it by calculation, comparison or any other process.

The conditions for admissibility (section 84)

A statement in a document produced by a computer is admissible as evidence of any fact stated in it, of which direct oral evidence would be admissible, if the following conditions are satisfied:

1. the document was produced by the computer during a period over which it was regularly used to store or process information for activities regularly carried on in that period, whether for profit or not;
2. over that period, information of the kind in the statement, or from which it is derived, was regularly supplied to the computer in the ordinary course of those activities;
3. throughout the material part of that period the computer was operating properly or, if not, any fault did not affect the production of the document or the accuracy of its contents; and
4. the information in the statement reproduces or is derived from information supplied to the computer in the ordinary course of those activities.

These four conditions were asked in November 2015 (three conditions), May 2016, May 2019 (Ade, 6 marks), May 2022 (four conditions) and March/July 2020 (two conditions). The examiners marked one mark each.

Other rules in section 84

• Several computers. Where storing or processing was done by a combination of computers, by computers in succession, or any combination, all the computers are treated as a single computer.
• The certificate. A certificate identifying the document and describing how it was produced, giving particulars of any device used, and dealing with the conditions, and signed by a person in a responsible position in the operation of the device or the management of the activities, is evidence of the matter stated. It is enough that the matter is stated to the best of the signer’s knowledge and belief.
• Supply of information. Information is taken to be supplied to a computer if supplied in any appropriate form, directly or by any equipment, with or without human intervention. A document is taken to be produced by a computer whether directly or by equipment, with or without human intervention.

Email

The rules on computer evidence apply to email. Admissibility also depends on why the email is offered. An email offered for a reason other than the truth of its contents, such as notice, state of mind or motive, is admissible. An exchange of emails that forms the parties’ contract is a legally operative fact and not hearsay. An email may be authenticated by:

1. the testimony of its author;
2. comparing it with other self-authenticating emails;
3. peculiar features of the disputed email, such as the email address on the printout;
4. a witness who knows of the exchange, as with letters;
5. oral evidence of the recipient that he actually received it; or
6. evidence that the message tallies with admitted telephone discussions between the parties.

November 2017 and May 2023 asked for four of these ways.

Websites

Evidence from websites is computer evidence with similar requirements. Admissibility depends on who the author of the site is and why it is offered. Web pages do not qualify as the business records of an Internet Service Provider that merely hosts them. The ISP’s internal records of a customer’s activity online may be admitted if properly authenticated.

An anonymous statement on a website may be inadmissible, even if a witness traced the IP address to the defendant.

GSM telephones

A mobile phone is a computer, so the principles for computer printouts apply. The phone itself, with its stored messages, may be tendered as documentary evidence, and the tendering party need only read it and show its contents in open court. Evidence from a GSM phone has dual status: it may be admitted as ordinary documentary evidence or as computer evidence, in which case section 84 or section 153(2) applies.

May 2021 asked about the nature of GSM evidence and the duty of the party tendering it (6 marks).

ATM evidence

An automated teller machine (ATM) is a computer. It records its operations, including video of transactions and who made them, and such a video is admissible. In R v Magoulias (2003) the ATM recorded the appellant’s identity and the time. The court held that a small clock error was insignificant and the evidence was admissible.

Electronic signatures

• An e-signature is any electronic means that indicates that a person adopted the contents of an electronic message or, more broadly, that the person who claims to have written it did write it and that the message received is the message sent. November 2020 Section A tested this.
• It may be an electronic sound, a symbol or a process attached to or logically associated with a record, and executed or adopted with intent to sign. A typed name may serve.
• Under section 93(3) of the Evidence Act an electronic signature may be proved in any manner, so all lawful means are allowed. In Sea-Land Service v Lozen International (2002) a company’s internal email was admitted as evidence of an electronic signature. In Moore v Microsoft (2002) clicking the “I agree” icon made the terms of a licence valid and binding, which is a click-wrap agreement.

Tapes and recordings

Section 258(1) defines a document to include video and audio tapes, so the rules on documentary evidence apply. In Maduekwe v Okoroafor (1992) a tape must be pleaded, relevant, and satisfy section 91, which means a proper foundation must be laid: the time, place and accuracy proved by a competent witness, and the voices identified. The foundation is laid by showing:

1. the recording device was capable of recording testimony;
2. the operator was competent;
3. the recording is authentic and correct;
4. no changes, additions or deletions were made;
5. how the recording has been preserved;
6. identification of the speakers; and
7. that the testimony was voluntary, without inducement.

March/July 2020 asked for these (the examiners listed six). A videotape is admissible as a primary or secondary document. If the broadcaster is a public body established by statute, such as the NTA, only the original or a certified copy is admissible (INEC v Action Congress, 2009). A video recording, and evidence of persons who watched it played, are both primary evidence.

The accountant as expert witness

An expert is a person especially skilled in the field in which he gives evidence. Whether a witness is an expert is a question of law for the judge. An expert has deep knowledge from formal training in his profession, but the skill need not come from formal education. It is enough that he has the skill that he claims.

Where expert evidence is relevant and necessary, the expert must be called. He must state his qualifications, satisfy the court that he is an expert on the subject, and give the reasons for his opinion.

The roles of an accountant as expert witness in a computer fraud case are to:

1. satisfy the court that the document to be tendered was generated in the ordinary course of the business or transaction that is the subject of the case;
2. satisfy the court that the document is the original or a certified true copy of the document generated from the computer; and
3. ensure his function relates to the subject matter of the document, because he will be cross-examined to discredit his conclusions.

May 2017 (6 marks), May 2018 and May 2019 asked for this, together with the section 84 conditions.

Working through the rules

Which limit applies?

Time limits compared

Is the computer document admissible?

Worked problems

Problem 1: Yankee Ltd

1. The rule. A transfer to or from a foreign country of funds or securities greater than US$10,000 must be reported (section 3(1)).
2. The report. Under the 2022 Act it is made within one day to the NFIU, the CBN and the SEC. (The May 2019 solution, under the older Act, said seven days, to the CBN and SEC.) The report should state the nature and amount of the transfer, the name and address of the sender, and the receiver.
3. Advice. Yankee Ltd should route the transfer through a financial institution, which will identify both parties, and make the report in time.

Problem 2: Oghiei and the US$15,000

1. The rule. A transfer to or from a foreign country that exceeds US$10,000 must be reported to SCUML, the CBN and the SEC within one day.
2. The application. US$15,000 exceeds the threshold.
3. Advice. The transfer is permitted but must be reported. If the money is carried as cash, it must be declared to Customs.

Problem 3: Ade the expert witness

1. The rule. Section 84 of the Evidence Act 2011.
2. The conditions. The documents were produced during a period when the computer was regularly used to store or process information; information of that kind was regularly supplied in the ordinary course; the computer was operating properly throughout the material part of the period; and the information reproduces or derives from information supplied in the ordinary course.
3. The certificate. A certificate signed by a person in a responsible position can prove these matters.
4. Role. Ade must state his qualifications and reasons, and show that the documents were generated in the ordinary course and are originals or certified copies.

Problem 4: Adamu and the camera

1. The offence. Official corruption by bribery.
2. The section. His duties touch on the administration of justice, so section 116 applies (if he is a peace officer or a public servant concerned with prosecuting or punishing offenders).
3. Receipt. Asking for the bribe is enough. It does not matter that he received nothing.
4. Punishment. A maximum of 14 years’ imprisonment. The video is admissible evidence.

Questions that have been asked on this topic, and how to answer them

Common mistakes in the exam

• Saying the section 116 maximum is seven years. It is 14. Seven years is for section 98.
• Saying a bribe must be received. Asking is enough.
• Mixing up the ₦5m (individual) and ₦10m (company) figures, or applying the cash limit to payments through a bank.
• Mixing up the time limits: one day for foreign transfers (2022 Act), 24 hours for a suspicious transaction report, seven days for single transactions above the limit.
• Giving US$1,000 as the transfer threshold. US$10,000 is for transfers, and US$1,000 is for casual customers.
• Saying any court may try a money laundering case. It is the Federal High Court.
• Listing fewer than the four section 84 conditions, or forgetting the certificate.
• Saying a mobile phone is not a computer. It is, with dual status.
• Saying an expert witness need not state his qualifications and reasons.

Quick revision

• Bribery: s.98 (not touching justice, seven years) and s.116 (14 years). Asking is enough. Corruptly, benefit, act by the officer. ICPC.
• Money laundering (2022 Act): cash limits ₦5m and ₦10m (s.2). Foreign transfers over US$10,000: report in one day, declare cash to Customs (s.3). Customer ID, US$1,000 casual (s.4). Suspicious: report in 24 hours (s.7). Over ₦5m or ₦10m: seven days, fine ₦250,000 to ₦1m a day (s.11). Surveillance by court order (s.15). Federal High Court.
• Section 84: regular use, regular supply, operating properly, derived from information supplied. Certificate. Email: six ways. Phone: dual status. ATM video. E-signatures: s.93(3).
• Expert witness: qualifications, reasons, ordinary course, original or certified copy, relevance.

Practice questions

These are original questions written in the style of the Institute of Chartered Accountants of Nigeria (ICAN) exam. Try each one before you open the answer. Full model answers follow the written questions.

Section A style: multiple choice

Section B style: written questions

Model answers

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