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TAX INCENTIVES AND EXPENDITURE ALLOWANCES - SEPTEMBER 2014
 
INTRODUCTION
To encourage further and continuing investments, various Tax Incentives and Tax Capital or Expenditure Allowances are embedded in the Statute Books waiting to be taken advantage of by businesses. Some of these investment incentives and expenditure allowances are succinctly highlighted in the following paragraphs.

Note however that only expenditures that are wholly, exclusively, necessarily and reasonably incurred in the trade or business of the tax payer can be claimed as a capital expenditure.

Also note that the depreciation of the assets of a company is not allowed under the Companies Incomes Tax Act in Nigeria. Instead, Capital Allowances are allowed.

PIONEER STATUS
By the Industrial Development (Income Tax Relief) Act, the Nigerian Investment Promotion Commission Act and the Pioneer Status Incentive Regulations 2014, companies engaged in gazetted pioneer industries and products are entitled to apply for Pioneer Status, and when granted, enjoy tax exemption/relief/holidays, for an initial term of three (3) years, starting from the date that the pioneer company commences business. The tax holiday period may be extended for a period of one (1) year, and a further one (1) year term, subject to the level of development and the relative importance at the time of the industry to the development of the country.

To qualify to apply for Pioneer Status however, the Applicant Company must among other things be registered as a corporate entity in Nigeria; and must have incurred qualifying capital expenditure of not less than Ten Million Naira (N10Million) in the pioneer industry concerned. Also, the application for the Pioneer Status must be submitted within one (1) year of the Applicant Company's commencement of commercial production.

SOLID MINERALS
A new company engaged in the mining of solid minerals is entitled to tax exemption for the first three (3) years of its operations.

AGRICULTURAL AND FOREIGN LOANS
Interest payable on loans granted to agricultural trade or businesses, local plant and machinery fabrication, and working capital for any cottage industry, is/are also exempted from tax provided that the moratorium of the loan is not less than eighteen (18) months, and the rate of interest on the loan is not more than the base lending rate at the time the loan was granted.
Also, losses arising from an agriculturally based trade or business are allowed to be carried forward indefinitely.
For foreign loans, interest payable on foreign loans is exempted from tax in the manner prescribed in the Table in the Third Schedule of the Companies Income Tax Act ("CITA").

HOTELS TOURIST INCOME
Twenty-five per cent (25%) of the income derived by a Hotel, in internationally convertible currencies, from tourists using the services of such a Hotel, are exempted from any form of tax, provided that such income is paid into a domiciliary account Reserve Fund, to be utilised within five (5) years in the building expansion of new Hotels, conference centres and other new facilities which promote tourism development.

RURAL INVESTMENT ALLOWANCE
Where a company provides for the purposes of its trade or business infrastructural facilities like electricity, water or tarred roads, which must be at least twenty (20) kilometres from such facilities provided by the Government, such a company will be entitled to claim both the Initial Allowance on such expenditure, and a further Rural Investment Allowance whose rate is graduated based on the scale of the facilities provided.

Where no public facilities exist, a hundred percent (100%) Rural Investment Allowance will be allowed by the tax authorities on such rural infrastructural expenditure(s).

A Rural Investment Allowance cannot however be carried forward.

RECONSTRUCTION INVESTMENT ALLOWANCE
To compensate businesses that incur expenditures on plant and machinery, CITA allows to such companies a ten per cent (10%) Reconstruction Allowance of the actual expenditure incurred on such plant and equipment. This is in addition to the initial allowance granted on such plant and equipment.

A Reconstruction and a Rural Investment Allowance cannot however be claimed on the same expenditure.

RESEARCH AND DEVELOPMENT (R & D) ALLOWANCE.
Companies and other organisations engaged in Research and Development activities ("R&D") for commercial purposes, are entitled to claim a twenty per cent (20%) investment tax credit on their R&D qualifying expenditures.
Other companies who undertake R&D activities to promote their trade or business are also entitled to claim the expenses incurred on such R&D provided that the R&D expenditures do not exceed ten per cent (10%) of the company's total profits in the financial year that the expenditure was incurred.

DEPRECIATION AND CAPITAL ALLOWANCES.
As it does not uphold of transparency and equity, the Companies Income Tax Act ("CITA") disallows a company depreciating its assets. In place of the depreciation of a company's assets, CITA makes provision for a transparent capital allowances regime which is encapsulated in CITA's Second Schedule.

It is however only the qualifying expenditure expended on the assets of a company, which assets are wholly, exclusively, necessarily and reasonably utilised in the company's trade or business, that are entitled to submit such claims for any kind of tax allowances.

INITIAL AND ANNUAL ALLOWANCES.
CITA allows a company to claim in its first year of use, an Initial Allowance on a capital expenditure expended on a business asset. The rates allowed for each asset group as an Initial Allowance is set out in Table 1 of Schedule 2 of the CITA.

For the following years that the asset is in use, the owner of the asset can claim an Annual Allowance which is the remainder of the Initial Allowance permitted under Table II of the Second Schedule of CITA.

Where a company purchases new plants and machineries in replacement of its old plants and machineries, such a company is allowed a once and for all ninety-five per cent (95%) capital allowance in the first year of the use of the asset. The remainder five per cent (5%) of the value of the asset is required to be retained in the financial books of the company until the asset is disposed off.

BALANCING ALLOWANCES AND BALANCING CHARGES
Balancing Allowances and Balancing Charges are other tax reliefs that a company can claim when it disposes of an asset.
A Balancing Allowance is the difference between the residual value of the asset and its sale value. This difference in an allowable tax deduction which can be written against the profit and loss accounts of the affected company.

Where the value of the asset at the point of its disposal is higher than the residual value of the asset, a Balancing Charge arises with the excess value written back to the profits of the company and taxed accordingly.

Note however that the maximum claim for capital and investment tax allowances that will be granted by the tax authorities is ninety-five per cent (95%) of the total cost of the qualifying asset.

EXPORT INCENTIVES
To promote the indigenous manufacture of products for export, various Export Incentives exist; like the Manufacture-In-Bond Guarantee; Duty Drawback Schemes; etc. Also in existence are Export Processing Zones for oil, gas and none oil and gas enterprises.
Products manufactured in Export Free of Export Processing Zones can only enjoy tax exemption if they are exported to another country, other than Nigeria.

CONCLUSION
In conclusion, fictitious, artificial or none bona-fide expenditures will not qualify to claim any tax allowance or relief.

DISCLAIMER NOTICE
This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to always seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also visit our website www.oseroghoassociates.com for more legal materials.

INTELLECTUAL PROPERTY PROTECTED.
This material is protected by International Intellectual Property Laws and Regulations. This material can only be re-distributed for non-profit educational purposes only on the strict condition that our authorship is acknowledged, and the Disclaimer Notice is prominently displayed.
In this Issue:-
 
1. Legal Article – August 2014 – NEW PENSION REFORM ACT 2014 – COMPLIANCE HIGHLIGHTS.
2. Disclaimer Notice.
3. Copyright Notice.

PENSION ALERT – AUGUST 2014 - NEW PENSION REFORM ACT 2014 – COMPLIANCE HIGHLIGHTS.

The Pension Reform Act, 2014 repealed the 2004 Pension Reform Act, No. 2 with the objective of improving the Uniform Contributory Pension Scheme, and the retirement benefits following thereof, for persons in the public and private sectors of the Nigerian economy. Persons in the Armed Forces, Intelligence and Secret Services continue to be exempted from this Contributory Pension Scheme.
It is now obligatory for employers in the private sector of the economy, with fifteen (15) or more employees, to register and make contributions to the Pension Contributory Scheme. Self-employed persons and employers with less than three (3) employees have the option to decide whether or not to join the Pension Contributory Scheme, in accordance with the Guidelines that the National Pension Commission may issue from time to time.

RATE OF PENSION CONTRIBUTIONS
The monthly rate of contributions to the Pension Contributory Scheme is now a minimum of ten per cent (10%) of each employee's monthly emolument to be contributed by the Employer, and a minimum of eight per cent (8%) of each employee's monthly emolument, to be contributed by the Employee.
Employers and employees are allowed to increase their pension contributions beyond the minimum rates prescribed under this Law. An employer can also elect to bear the entire monthly Pension Contribution, provided that such a contribution shall not be less than twenty per cent (20%) of the employee's total monthly emolument.
The penalty for not deducting and or remitting a Pension Contribution within seven (7) days of the payment of every employee's monthly emolument shall not be less than two per cent (2%) of the total contribution that remains unpaid or unremitted by the employer.

GROUP LIFE INSURANCE COVER
The 2014 Pension Reform Act reinstates the compulsory Group Life Insurance Cover - previously provided for under the repealed 2004 Pension Reform Act - by requiring all employers, already aliable to make compulsory monthly Pension Contribution(s), to also maintain a Group Life Insurance Policy in favour of each of their employees for a minimum of three (3) times the annual total emolument of the employee(s).
The premium for the Group Life Insurance Cover must be paid not later than the date of the commencement of the Insurance cover.
Where the death of an employee occurs with no Group Life Insurance Cover in place, the employer shall be directly and strictly liable to bear the death benefit claims of such a deceased employee's Estate.

TAX EXEMPTION.
Contributions to the Uniform Pension Contributory Scheme are tax exempted; i.e., they are tax deductible expenses in the computation of the tax payable by the Pension Contributor.
Also, all interest, dividends, profits, investments, retirement benefits, etc, arising from and paid in accordance with the provisions of the 2014 Pension Reform Act or any other income accruable to Pension Funds and Assets, are also exempted from taxation.

PROTECTION OF PENSION FUNDS.
In addition to the express prohibition of Pension Fund Administrators ("PFA'') retaining or dealing in Pension Assets, Pension Fund Administrators ("PFA") are required to maintain a statutory Contingency Reserve Fund to meet any claim that such a PFA may become liable for. Subject to such Guidelines as the National Pension Commission ("NPC") may issue, the Statutory Reserve Fund is required to be credited with 12.5% of the net profit after tax of each PFA.

Each PFA is also required to establish and maintain a Pension Protection Fund which Fund secures the benefits of eligible Pension Contributors under the 2014 Pension Reform Act.

Retirement Savings Account Holders, who have made their pension contributions for a number of years, shall be entitled to some minimum pension benefits as shall be specified in the Guidelines issued by NPC.

PENALTIES – PENSION CONTRAVENTIONS.
Any person, who without a Licence, carries on business as a Pension Fund Administrator ("PFA") or as a Pension Fund Custodian ("PFC"), or whoever misappropriates or diverts Pension Funds, commits an offence and is liable on conviction to a fine of not less than N10Million (Ten Million Naira) for carrying on pension business without a licence; and a fine of an amount equal to three times the amount misappropriated in cases of Pension Funds and Assets misappropriated; or a term of imprisonment of not less than 10 (ten) years or to both the fine and the term of imprisonment.

Where the offence is committed by a corporate body, the fine must not be less than N50Million (Fifty Million Naira); with each Director and Officer of the offending corporation liable to a fine of N5Million (Five Million Naira) or to a term of ten (10) years or to both the fine and the term of imprisonment.

In addition to the fine and imprisonment, a Court of Law may order the forfeiture of the property, asset or proceeds of the pension contravention to the National Pension Commission ("NPC"). This is also in addition to the accrued interest attached to the proceeds of the unlawful pension activity and benefit.

PENSION DISPUTE RESOLUTION
As dispute is a part of human existence, a dissatisfied employee with a pension decision has the right to formally request the National Pension Commission to review a disputed decision. The National Pension Commission is required to ensure that it reaches a decision on any pension dispute without any delay.

Where the employee, the PFA or the employer is/are dissatisfied with a decision of the National Pension Commission, such dissatisfied party has the right to refer the dispute for resolution in accordance with the provisions of Arbitration and Conciliation Act, or to the National Industrial Court, whose decision shall be final and binding on the parties.
There is no Statute of Limitation to actions for the recovery of pension contributions, penalties and other benefits under the 2014 Pension Reform Act.

OBSERVATIONS
Increments in the rate of pension contributions by compliant employers will only further increase the cost of doing business and discourage new employment. This is especially as the level of compliance and enforcement with the provisions of the repealed 2004 Pension Reform Act was very, very dismal.

Also, there is a lacuna as to whether employers with more than three (3), but less than fifteen (15) employees, are mandatorily required to comply with the provisions of the Pension Reform Act, 2014. It is hoped that the NPC Guidelines when released, will provide some direction in this area.

The confidentiality provisions in this new Pension Law are reminiscent of draconian military decrees. These confidentiality provisions are also likely to conflict with the provisions of the 1999 Constitution (as amended) and the Freedom of Information Act.
Due to the average life expectancy in Nigeria being less than 55 years, commentators have seriously questioned the propriety of the retirement age of 60 years, as provided for in the Pension Reform Act, 2014. This is especially as the principal beneficiary of the Pension Scheme is the employee and not the employee's estate on the employee's demise
There are no protective whistle-blowers provisions in this legislation. In a country with a very high unemployment rate, many employers may continue to breach the provisions of the mandatory contributory pension scheme thereby inhibiting the ability of the scheme to be self-sustaining.

DISCLAIMER NOTICE
This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to always seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also visit our website www.oseroghoassociates.com for more legal materials.

INTELLECTUAL PROPERTY PROTECTED.
This material is protected by International Intellectual Property Laws and Regulations. This material can only be re-distributed for non-profit educational purposes only on the strict condition that our authorship is acknowledged, and the Disclaimer Notice is prominently displayed.
In this Issue:-
 
1.   Legal News – July 2014 – Foreign Exchange Payment Regulations in Nigeria
2.   Disclaimer Notice.
3.   Copyright Notice.

Legal Alert – July 2014 – Foreign Exchange Payments in Nigeria
 
Despite continuing trade liberalisation, divergent opinions remain as to whether goods and services can be paid for in a foreign currency in Nigeria? This divergence in opinion is easily resolved by a review of the provisions of the Central Bank of Nigeria (Establishment) Act ("CBN Act") and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act (''Forex Act'').
 
In furtherance of the CBN and Forex Acts, the Central Bank of Nigeria (''CBN'') compiled and issued the Foreign Exchange Manual, which Manual serves as a guide to participants when processing their foreign exchange transactions.
 
Common Mode of Payment.
 
The common mode of payment in Nigeria is by cash, in the Naira currency. By Law, any person who refuses to accept payment in the Nigerian currency of the Naira is guilty of an offence and liable on conviction to a fine of N50,000; or to a term of imprisonment of six (6) months.

The CBN is empowered to prescribe the circumstances and conditions under which foreign currencies may however be accepted as a medium of exchange in Nigeria. And in furtherance of this statutory duty, the CBN issued the Foreign Exchange Manual.
Exception to the Common Mode of Payment.

Under the current CBN Foreign Exchange Manual, the payment for any goods or services, in any convertible foreign currency, is at the discretion of the person making the payment; provided that any such foreign currency payment originates from a domiciliary account, or from the payee's offshore sources.

Except expressly required by a Statute, operators of domiciliary accounts are not obligated to disclose the sources of the foreign currency or currencies in their domiciliary accounts. This is because data collated on foreign exchange transactions are primarily for statistical and foreign exchange reserve purposes.

Also, foreign currency transactions in the foreign exchange autonomous market or in domiciliary accounts are not liable to government expropriation.

Hotels and Foreign Exchange Licensing
 
Like other regulated institutions, Hotels that are registered by the Central Bank of Nigeria as Authorised Buyers of foreign currencies, may receive payment for the services that they provide in any convertible foreign currency.

Also, Hotels that are registered by the CBN as Authorised Buyers may buy from their Guests, foreign currencies, and can exchange unutilised foreign or local currencies from such Guests.

All foreign exchange receipts must however be domiciled in the Hotel's Foreign Currency Domiciliary Account with a licensed Bank in Nigeria.

It is also a mandatory requirement that all foreign exchange transactions must have documentation showing the name, address and passport number of the customer of the Hotel making the currency transaction; the name and address of the Hotel; the amount purchased; what foreign currency was involved in the transaction; the commission earned and the equivalent in Naira.
Lastly, monthly returns of all the purchased and sold foreign currencies must be submitted to the Trade and Exchange Department of CBN not later than 10 days after the end of each month. Where no foreign exchange sale or purchase is made, a Nil return is required to be filed.

Some Foreign Exchange Offences and Sanctions.
 
There are various foreign exchange offences for which stiff sanctions are prescribed. Some of these offences are the forgery of foreign currencies; the conversion of any foreign exchange sourced from the foreign exchange autonomous market to a use not approved by the applicable laws; or the negotiation of any foreign exchange or any other trading instrument contrary to the provisions of the applicable law; round-tripping of foreign exchange sourced from the autonomous foreign exchange market; failure to render monthly returns; etc.
On conviction, some of the penalties for any foreign exchange infringement include, for individuals, a term of imprisonment of five (5) years; or a fine of five (5) times the amount of the foreign exchange involved. In the case of a corporate body, the fine for contravention includes a penalty of ten (10) times the amount of the foreign exchange involved.

Further sanctions are the forfeiture of the proceeds of the foreign exchange contravention to the Federal Government of Nigeria (''FGN''); the suspension or revocation of the licence of the dealer involved; and the forfeiture of the foreign currency to the Nigerian Federal Government.

DISCLAIMER NOTICE
 
This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to always seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also visit our website www.oseroghoassociates.com for more legal materials.

INTELLECTUAL PROPERTY PROTECTED.
 
This material is protected by International Intellectual Property Laws and Regulations. This material can only be re-distributed for non-profit educational purposes only on the strict condition that our authorship is acknowledged, and the Disclaimer Notice is prominently displayed.
Legal Alert – June 2014 – Bribery, Corruption, Economic and Financial Crimes

Bribery, Corruption, Economic and Financial Crimes
 
INTRODUCTION
 
Corruption is generally described as any dishonest action or inaction, by any person, in any form of authority, to derive any form of illegitimate, illicit, immoral, incompatible or unethical advantage.
 
As bribery, corruption, economic and final crimes remain a deterrent to human capital advancement, various global bodies and countries have enacted their anti-corruption, bribery, economic and financial crimes legislations. Some of these legislations will now be reviewed in the paragraphs following underneath.
 
THE UNITED NATIONS CONVENTION AGAINST CORRUPTION
 
The United Nations Convention Against Corruption is an internationally binding Treaty designed to promote, facilitate and support transnational cooperation, technical assistance and the exchange of information which prevents, detects and deters in a more efficient and effective manner, the international transfer of  corrupt and illicitly acquired property.
 
Signatories to this Treaty are obligated to, subject to their legal systems, develop and implement Anti-corruption Policies which promote the prevention of corruption, money laundering and the proper management of public affairs, public property, integrity, transparency and accountability.
 
More than 140 member states of the United Nations have signed and ratified this Treaty and domesticated it in their statute books.
 
AFRICAN CONVENTION ON PREVENTING AND COMBATING CORRUPTION
 
The African Convention on Preventing and Combating Corruption (‘’the African Convention”) describes corruption to include the solicitation or acceptance, directly or indirectly, of anything of value in exchange for any act or omission in the course of, or in performance of any duty.
 
Illicit enrichment and the diversion of state resources by an individual or group of individuals for purposes that is unrelated to the purpose for which those resources are intended, also amounts to criminal corruption.
 
OECD CONVENTION ON COMBATING BRIBERY.
 
The Organisation for Economic Co-operation and Development (‘’OECD’’) also has a Convention on combating the bribery of foreign public officials in international business transactions. This Convention, like other similar anti-bribery conventions, seeks to enshrine effective measures which promptly deter, prevent, combat and criminalise the bribery of foreign public officials. 
Each party to the OECD Convention on Combating Bribery is required to implement measures which make it a criminal offence under its Laws for any person to intentionally offer, promise or give any undue pecuniary or other advantage to a foreign public official for the purpose of such public official acting or refraining from acting, in order for some improper advantage to be obtained.
 
Each Party to the OECD Convention on combating bribery is also enjoined to ensure by domesticated Legislation, that the bribery of a foreign public official is punishable by effective, proportionate and dissuasive criminal penalties which should include the deprivation of individual liberty and the extradition of suspected offenders to their home countries for prosecution and sentencing.
 
US FOREIGN CORRUPT PRACTICES ACT
 
The United States Foreign Corrupt Practices Act (“US FCPA”) prohibits the giving or offering of anything of value to foreign government officials or their third party proxies for the improper purpose of influencing any decision to the benefit of the giver of the bribe, or to such other parties related to the giver of the bribe.
 
Examples of “anything of value” include cash, gifts, travel, entertainment, transportation, free lodging, political or charitable donations, discounts, giving favourable employment or business opportunities, etc.
 
Under the US FCPA, there is no minimum value as to what constitutes a bribe. 
 
UK BRIBERY ACT
 
The United Kingdom (“UK”) Bribery Act is broader in scope to the US FCPA, as the UK Bribery Act prohibits the giving of a bribe to any person, whether such a person is a government official or not, for the improper purpose of influencing any benefit to the giver of the bribe.
 
Under the UK Bribery Act, both the bribe giver and the bribe receiver are subject to strict liability, which includes criminal prosecution and conviction.
 
Corporations are compulsorily required to adopt and implement an anti-bribery policy. This is as the UK Bribery Act holds corporations subject to UK jurisdiction strictly responsible where the giving and the taking of a bribe is not prevented from occurring by corporations.
 
NIGERIAN CORRUPT PRACTICES AND OTHER RELATED OFFENCES ACT
 
In Nigeria, the applicable law is the Corrupt Practices and Other Related Offences Act. The Corrupt Practices and Other Related Offences Act describes corruption to include bribery, fraud and other similar dishonest offences.
 
The Corrupt Practices and Other Related Offences Act established the Anti-Corruption Commission with a charge to investigate any corrupt practice in the public sector of the economy, and recommend appropriate cases for prosecution by the office of the Attorney-General of the Federation.
 
EXAMPLES OF CORRUPTION AND PUNISHMENTS
 
Any person, who in the discharge of his or her duties asks for, gives, receives, procures, conspires or facilitates the obtaining of any property or benefit, in return for any favour, thing, omission or commission, commits an offence which on conviction attracts a seven (7) year term of imprisonment.
 
It is also an offence for a Public Servant to acquire and hold, directly or indirectly, any private interest in any contract or agreement emanating from a public establishment. The punishment on conviction for this offence is also seven (7) years imprisonment. 
 
It is equally a criminal offence for any person to offer to a public servant any gratification as an inducement or reward for the public servant to perform, expedite, delay, hinder, prevent or abstain from performing any duty. The punishment for this offence is five (5) years imprisonment with hard labour.
 
Where a public servant uses his or her office or position to confer any corrupt or unfair advantage on himself or on any third party, an offence is committed which on conviction carries a term of imprisonment of five (5) years without the option of a fine. 
 
FORFEITURE OF GRATIFICATION
 
In addition to the term of imprisonment for bribery offences, the Corrupt Practices and Other Related Offences Act prescribes the forfeiture of the object of the gratification, and the payment of a fine that is not less than five (5) times the sum or the value of the subject matter gratification.
 
DUTY TO REPORT BRIBERY
 
Any public officer to whom any gratification is promised, offered or given; and any individual whom any gratification is solicited or obtained from; is statutorily required to report such bribery incident to the nearest office of the Anti-Corruption Commission or to a police officer.
 
Any person who fails to make such a bribery incident report, without a reasonable excuse, is guilty of an offence, and liable on conviction to a fine not exceeding One Hundred Thousand Naira (N100,000) or to a term of imprisonment not exceeding two (2) years; or to both the fine and the term of imprisonment.
 
INDEPENDENT COUNSEL
 
Where an allegation of corruption or bribery is made against the President or the Vice-President, or against any State Governor or Deputy Governor, the Chief Justice of Nigeria is required to, if reasonable cause is provided, appoint an Independent Legal Counsel to investigate the allegation and report his or her findings to the National Assembly in the case of the President or Vice-President, or to the relevant State House of Assembly in the case of a State Governor or Deputy Governor.
 
MULTI-JURISDICTIONAL LIABILITY FOR BRIBERY
 
The provisions of the Corrupt Practices and Other Related Offences Act also apply to persons who though are not Nigerian citizens, enjoy permanent residence status in Nigeria, for corrupt and bribery offences committed inside and outside Nigeria.
 
CORRUPTION AS AN ECONOMIC CRIME
 
The Economic and Financial Crimes Commission (Establishment, etc.) Act, 2004 describes an economic and financial crime to be the non-violent, criminal and illicit activity committed with the objective of gaining wealth illegally.
 
Examples of economic and financial crimes include any form of bribery, corrupt practices, advance fee fraud, narcotics, drug trafficking, money laundering, embezzlement, illegal charge transfers, contract scams, credit card fraud, human trafficking, child labour, tax evasion, foreign exchange malpractices, theft of intellectual property,  piracy, etc.
 
The Economic and Financial Crimes Commission (“EFCC”) is charged with the investigation of all economic and financial crimes in Nigeria. As part of its investigative responsibility, EFCC is enjoined to identify, trace, freeze, confiscate or seize proceeds derived from economic, financial and terrorist criminal activities.
 
SPECIAL POWERS OF EFCC
 
In addition to the statutory authority to investigate economic and financial crimes, the Economic and Financial Crimes Commission (“EFCC”) is also empowered to conduct investigations into the assets of any individual where there is a mismatch between such an individual’s lifestyle and his or her sources of income.
 
It is also the statutory responsibility of EFCC to co-ordinate the enforcement of all economic and financial crimes legislations among which are the Money Laundering Act, the Advance Fee Fraud and other Related Offences Act, the Failed Banks Act, the Banks and other Financial Institutions Act, etc.
 
PUNISHMENT FOR ECONOMIC AND FINANCIAL CRIMES
 
Other financial and economic crimes for which various punishments are prescribed under the law include financial malpractices, aiding and abetting acts of terrorism, giving false information, possessing, retaining, using, concealing and converting the proceeds of a financial or economic crime, etc.
 
And some of the punishments for the above paragraph financial and economic crimes include terms of imprisonment, fines equivalent to one hundred per cent (100%) of the value of the proceeds of the financial or economic crime; or to both the term of imprisonment and the punitive fine.
 
All the assets and properties derived or acquired from any economic or financial crime, including the international passports of the offenders, are liable to forfeiture or confiscation. Where such derived or acquired asset or property is in a foreign country, the asset or property shall be subject to any treaty or arrangement that Nigeria has with such a foreign country for the repatriation of the proceeds of any financial or economic crime.
 
CONCLUSION.
 
In practice, the Bribery, Corruption, Economic and Financial Crimes Laws are held more in disdain than in compliance. This is as a result of many reasons ranging from a continuing, overbearing, endemic bribery and corruption culture; an ill-equipped enforcement and judicial system; etc.
 
The harmonisation of the various legislations and enforcement agencies – like EFCC, the Anti-Corruption Commission, the Police, etc. – will remove the current duplication of investigative powers and streamline enforcement resources.
 
Following from the above comment is the observation that while the robustness or otherwise of bribery and corruption laws may not be comparable to those in the United Kingdom, or in the other OECD countries and in the United States, improvements in the enforcement of the current legislations with their harmonisation by parliament should improve enforcement.
 
DISCLAIMER NOTICE
This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to always seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also visit our website www.oseroghoassociates.com for more legal materials.
INTELLECTUAL PROPERTY PROTECTED.
This material is protected by International Intellectual Property Laws and Regulations. This material can only be re-distributed for non-profit educational purposes only on the strict condition that our authorship is acknowledged, and the Disclaimer Notice is prominently displayed.
 
Legal Alert – May 2014 – Smoking Regulations In Public Places
 
INTRODUCTION
SMOKING REGULATIONS IN PUBLIC PLACES
 
Legislation to control the hazards that smoking poses to human health has escalated in the last decade. In Lagos State, the Regulation of Smoking Law was assented to on 17th day of February 2014, with the full implementation of this Law commencing six (6) months afterwards.

At the Federal tier of governance, the Tobacco Smoking (Control) Act 1990, and the Tobacco Control Bill 2013, are legislations that are also worthy of review for a further appreciation of some of the legislations which regulate the smoking of tobacco products in public places.

CONTROL OF SMOKING IN PUBLIC PLACES
Save for the few exempted areas, the Lagos State Regulation of Smoking Law, 2014 forbids smoking in all public places.
One of the exceptions to this rule is the one that states that the only places where an individual can smoke, as from 16th August 2014, are on a street, a road or a highway.

A second exception to the no smoking in public places rule is the requirement that an owner, an occupier or a person in charge of a Tertiary Institution, a Bar, a Night Club or a Hotel is allowed to designate not more than Ten per cent (10%) of such a person's premises as a smoking area. A designated smoking area must however have the necessary smoking signs, with good cross ventilation, and where necessary, proper ventilating equipment.

CONDITIONS FOR NO-SMOKING AREAS
It is the duty of the owner or occupier or manager of a Tertiary Institution, a Bar, a Night Club or a Hotel to ensure that:-
(i) The internationally recognised "No-Smoking" Signs or Symbols are conspicuously displayed at each entrance and in other prominent locations of his, her or its premises.
(ii) "No-Smoking" Signs must be affixed with the Smoke Detectors in the premises.
(iii) Ensure that people that smoke on the street, near its premises, do so at least Ten (10) meters from the premises.
(iv) Ensure that Smoking outside the permitted No-Smoking area in its premises does not occur.

PENALTIES FOR BREACH OF NO SMOKING REGULATIONS
Any person who smokes in a public place that is not exempted under the Lagos State Regulation of Smoking Law commits an offence which on conviction carries a fine of not less than Ten Thousand Naira (N10,000) and not more than Fifteen Thousand Naira (N15,000); or to a term of imprisonment that is not less than One (1) month and not more than Three (3) months; or to such other non-custodial punishment as a Judge may deem fit; or to both the fine and the term of imprisonment.
Where a smoker is a repeat offender, the Lagos State Regulation of Smoking Law prescribes a fine of Fifty Thousand Naira (N50,000) or a term of imprisonment of Six (6) months; or both the fine and the term of imprisonment as the Judge deems fit.

PENALTIES FOR BREACH – SIGNS, SMOKE DETECTORS
It is an offence for the owner, occupier or a person in charge of a "No-Smoking Area" to fail to put up the "No-Smoking Signs" in such areas; or to fail to install smoke detectors; or to stop anyone from smoking in the non-exempted areas of his or her or its premises.
The penalties for the above offence, on conviction, includes a fine of One Hundred Thousand Naira (N100,000) or a term of imprisonment of Six (6) months; or to both the fine and the term of imprisonment. The Judge that hears the case is also allowed to award other non-custodial punishments.

Where the smoking control offence is committed by a corporate body, firm or association, the Directors, Managers, Partners, Company Secretary or such other similar or senior official of such an establishment could be held liable as if they personally committed the offence; and on conviction, they will suffer a fined Two Hundred and Fifty Thousand Naira (N250,000). The only permissible defence is for such an individual to establish that he took all reasonable steps to stop the smoker from smoking in his premises.

Where further or repeated violations occur, the premises so affected could be sealed up for the repeated smoking regulations violation.

SMOKING IN THE PRESENCE OF CHILDREN – SECTION 9
To protect children from third party smoking, which is arguably as harmful as direct smoking itself, it is now an offence to smoke in the presence of a child under the age of Eighteen (18) years old; or to expose a child to any form of smoking.

The punishment for smoking in the presence of a child is a fine of Fifteen Thousand Naira (N15,000), or a term of imprisonment of One (1) month; or both the fine and the term of imprisonment. The trial Judge is equally given the discretion to order a non-custodial punishment for this infringement.

For repeat offenders, who expose children to smoking, the punishment, on conviction, is a fine of One Hundred Thousand Naira (N100,000), or a term of imprisonment of One (1) year; or to both the term of imprisonment and the fine herein stated.

TOBACCO SMOKING (CONTROL) ACT – FEDERAL LAW
The existing Federal Law that regulates tobacco smoking is the Tobacco Smoking (Control) Act, 1990. This Federal Law prohibits the smoking of tobacco in certain public places like Cinemas, Theatres, Stadia, Offices, Public Transportation, Lifts, Medical establishments, Schools and Nursery Institutions.

TOBACCO PRODUCTS AND ADVERTISEMENT WARNINGS
The advertisement of tobacco products through the medium of newspapers, magazines, radio, television, cinema, billboards and handbills must contain a prominent warning which says that tobacco smoking is dangerous to health.
In furtherance of the tobacco warning requirement, all tobacco packages must have inscribed on them the following package-rotational warnings, namely:-
a. "The Federal Ministry of Health warns that tobacco smoking is dangerous to health;" and
b. "Smokers are liable to die young."
It is also compulsory that all tobacco products must state the amount of the tar, and the nicotine content in each unit of each tobacco product.

The promotion or sponsorship of sporting events by tobacco and tobacco related firms is not allowed as a medium to advertise tobacco products at such events without the tobacco warning that "smoking is dangerous to health" prominently displayed.

PENALTIES – PUBLIC SMOKING AND ADVERTISEMENT WARNINGS
Any person who smokes tobacco in prohibited public places is guilty of an offence and liable, on conviction, to a fine of not less than N200 and not more than N1000; or to imprisonment for a term of not less than one (1) month but not more than Two (2) years.

A person found guilty of smoking in prohibited public places could also suffer both a fine and a term of imprisonment as stated in the preceding above paragraph.

Any person who advertises, sells or offer for sale any tobacco product without the prescribed tobacco warning prominently inscribed on the tobacco product is liable, on conviction, to a fine of not less than Five Thousand Naira (N5,000).

Where the offending advertiser or seller of tobacco products without the statutory warning signs inscribed on the tobacco product is a corporate body, the penalty for contravention, on conviction, is a fine of not less than Five Thousand Naira (N5,000) or imprisonment for a term not exceeding Three (3) years; or to both the fine and the term of imprisonment to be borne by the key or controlling officials of the corporate body who were aware, connived or consented to the tobacco warning statutory contravention(s).

TOBACCO SMOKING (CONTROL) BILL, 2013
Numerous Tobacco Smoking Control Bills have remained un-passed into Law by the National Assembly. One of such Bills is the Tobacco Smoking (Control) Bill 2013, which seeks to provide regulations on the production, importation, exportation, advertisement, promotion, sponsorship, distribution, sale of tobacco products, and the designation of areas where tobacco products may or may not be smoked; and on other matters related to tobacco smoking.

Subject to the final deliberation and the assent to one of the versions or a harmonised version of the Tobacco Smoking (Control) Bill, it is anticipated that further legislation on the labelling of tobacco products, health warnings on tobacco products, outdoor public smoking of tobacco products, the retail selling of tobacco products to persons under the age of 18 years old, advertising and sponsorship of tobacco led events, licensing of the stakeholders in the tobacco industry, enforcement of these regulations, etc. will be captured in this awaited Federal Law.

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