ICC Commercial Crime Service

Nigeria Signs Agreement to Stop Siphoning of Funds and Curb Corruption

The Federal Government of Nigeria (FGN) recently reported that it had signed the Organisation for Economic Co-operation and Development (OECD) Multilateral Competent Authority Agreement (MCAA) and the exchange of inter-country reports.

With that action, Nigeria joins other countries that are forcing multinational companies to disclose their transfers of money from one country to another that has more favourable tax requirements. This mandate, in theory, will help revenue authorities know if a company is trying to avoid taxes and in doing so, causing economic harm to government coffers.

Upon making the announcement of the MCAA, Nigerian Information Minister Lai Mohammed reported that an estimated N1 trillion had been lost when multinational enterprises were able to easily shift their profits to other jurisdictions without disclosure.

The Agreement enables Nigeria to have access to country-by-country (CbC) reports on multinational enterprises (MNEs) operating within Nigeria, and thereby monitor transfer pricing and Base Erosion and Profit Sharing activities.

The steep decline in the price of crude oil, along with renewed disruption to production in the Niger Delta has provided increased incentive (if any was required) for the Nigerian tax authorities to seek to improve the assessment and collection of taxes on MNEs.

In addition, since the information that is shared under the MCAA includes details such as the name, address, Tax Identification Number and date and place of birth of Reportable Persons, account numbers and balances and, where accounts have been closed, information on the closure, such information could provide significant material to assist corruption investigations.

Babajide Ogundipe, co-founder of Sofunde, Osakwe, Ogundipe & Belgore in Lagos, Nigeria practices as a commercial litigator and conducts investigations into various different types of fraud and other misconduct on behalf of clients in the banking, insurance, petroleum, pharmaceutical and shipping industries. Ogundipe has also assisted numerous clients in the recovery of assets lost as a result of fraud and other misconduct and has been recognised as one of Nigeria’s leading asset-recovery lawyers.

The author would like to recognize his colleague Lateef O. Akangbe for co-authoring this article.





ICC FraudNet is an international network of independent lawyers who are leading civil asset recovery specialists in each country. Recognized by Chambers Global as the world’s leading asset recovery legal network, our membership extends to every continent and the world’s major economies, as well as leading offshore wealth havens that have complex bank secrecy laws and institutions where the proceeds of fraud often are hidden. Founded in 2004 by the Paris-based International Chamber of Commerce (ICC), the world’s business organization, FraudNet operates under the auspices of the ICC’s London-based Commercial Crime Services unit.