[Download full Judgment] Court bars Fed Govt, CBN SCUML from enforcing money laundering act on Legal Practitioners

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A federal high court, Abuja has restrained the federal government, the Central Bank of Nigeria (CBN) and the Special Control Unit against Money Laundering (SCUML) from enforcing the provisions of the Money Laundering (Prohibition) Act 2011 (MLA) against legal practitioners.

The court presided by Justice Gabriel Kolawole, gave an order of perpetual injunction restraining the Federal Government, the CBN and the SCUML from seeking to enforce Section 5 of the MLA against legal practitioners. He made no order as to costs.

In an originating summon dated March 15, 2013, the NBA had asked the court to declare that the provisions of Section 5 MLA, in so far as they purport to apply to legal practitioners, are invalid, null and void.

The originating summon was filed on behalf of the Registered Trustees of the NBA by Chief Wole Olanipekun (SAN), Mrs. Funke Adekoya (SAN), Messrs Babajide Ogundipe, Emeka Nwadioke and Davison Oturu.

The defendants in the suit were the Attorney General of the Federation (AGF) and the Central Bank of Nigeria (CBN). They were represented by Mr. M. B. Wali for the first defendant while Chief Charles Uwensuyi-Edosomwan(SAN) was lead counsel for the second defendant. The plaintiffs had sought an order of the court deleting legal practitioners from the definition of “Designated Non-Financial Institutions (DNFIs)” as contained in Section 25 MLA, an order of perpetual injunction restraining the CBN from seeking to implement its circular reference FPR/CIR/GEN/VOL.1/028 dated August 2, 2012 in relation to legal practitioners. They also sought an order of perpetual injunction restraining the Federal Government, acting through Special Control Unit against Money Laundering (SCUML), the National Financial Intelligence Unit (NFIU), the Economic and Financial Crimes Commission (EFCC) or otherwise howsoever from seeking to enforce the provisions of Section 5 MLA in relation to lepractitioners. The plaintiffs had raised three issues for determination by the court. They prayed the court to determine whether Section 5 of the MLA is unconstitutional, whether SCUML is the body authorised to regulate the conduct of legal practitioners and whether it is a juristic body, and whether in view of the Legal Practitioners Act (LPA), Evidence Act and the 1999 Constitution (as amended), the legal profession is not already well regulated?

In an 18-paragraph affidavit deposed to by Osita Okoro, NBA Executive Director, the plaintiffs had stated that the action was brought on behalf of members of the legal profession in Nigeria to challenge Nigeria’s anti-money laundering regime as set out under the MLA, and following complaints from legal practitioners all over the country regarding, among others, potential encroachment on the principle of lawyer/client privilege through the implementation of the anti-money laundering regime by the SCUML.

Arguing for the first defendant, Wali submitted that the objective of the MLA and the SCUML was not to monitor the legal practitioner but to monitor their clients who may have the potential to commit heinous crimes.

Wali stated that the MLA 2011 “is a valid and deliberate exercise of legislative power to enact a law in derogation of the rights conferred by Section 37 of the Constitution for the purposes of preventing the financing of terrorism and other criminal activities inimical to public health and safety.”

Responding to the plaintiffs’ argument that Section 192 of the Evidence Act “specifically forbids and prohibits legal practitioners from divulging to any party all the secrets or transactions or communications between them and their clients,” he contended that Section 5 MLA “which is the portion of the Act that requires reporting to SCUML apply only to legal practitioners who are engaged in cash transactions as defined by section 25 of the MLA,” adding that the section applies “to only certain classes of legal practitioners.”

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