The Central Bank of Nigeria’s Economic Intelligence Unit (EIU) and the Nigerian Financial Intelligence Unit (FIU) are working with Interpol and the US Federal Bureau of Investigation (FBI) in an investigation to uncover companies engaged in foreign exchange fraud that involves the purchase of over-invoiced foreign houses.

The central bank has also introduced product valuation mechanisms in a bid to clamp down on trade-based financial crimes that employ misinvoicing. 

Modus operandi

The companies in the foreign house-buying fraud allegedly buy properties abroad for inflated prices. They then go abroad to withdraw in foreign exchange the difference between the market price and the over-invoiced value of the house.

The companies reportedly cream off between 40 to 60 per cent of the transaction amount.

Participants

Reports in the Nigerian media suggest that Chinese, Indian and Middle Eastern companies are suspected of involvement in the fraud.

These frauds have reportedly been perpetrated by companies for decades but only now has the CBN elected to investigate these alleged malpractices.

Companies barred

As part of the investigation the central bank has placed a post-no-debit instruction on the bank accounts of 38 companies, many of them ostensibly involved in the gambling and gaming sector.

This post-no-debit instruction effectively bars the companies from purchasing houses abroad.

Price verification

In a move to stop other types of trade-based financial crime the CBN has introduced a product price verification mechanism.

This aims to help prevent overpricing or mispricing of imported goods and services.

Categories: Trade Based Financial crimes News

Tags: EIU, FIU, Nigeria