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EFCC Defends Osun Account Restriction, Cites Money Laundering Act Powers

By Ayodele Quadri, Lagos Times Correspondent

ABUJA, NIGERIA — The Economic and Financial Crimes Commission (EFCC) has defended its decision to restrict the statutory allocation account of the Osun State Government, maintaining that anti-graft legislation empowers the agency to place a temporary 72-hour stop order on accounts under active investigation without prior court authorization.

The clarification follows a legal row and executive protests by the Osun State Government over a Post No Debit (PND) directive issued to First Bank on August 5, 2026, regarding an investigation into the alleged fraudulent handling of ₦11 billion in Ecology Funds, Intervention Funds, and Federation Account Allocation Committee (FAAC) transfers.

Key Operational Highlights

  • Statutory Stop Order: The commission relied on Section 7(6) of the Money Laundering (Prevention and Prohibition) Act, 2022, and Section 38 of the EFCC Establishment Act, which permit a temporary 72-hour freeze during active financial crime investigations.

  • Judicial Authorization Requirement: Senior legal experts and judicial precedents (EFCC v. Attorney-General of Benue State) note that while the commission can initiate a 72-hour temporary hold, any restriction extending beyond 72 hours strictly requires a formal court order under Section 34 of the EFCC Act.

  • Contested Outflows: The EFCC stated the emergency restriction was triggered after detecting “precipitate and unwarranted movement of funds” from state treasury accounts to suspicious accounts starting August 2, 2026.

  • Bar Association & Legal Scrutiny: Senior Advocates of Nigeria (SANs) and legal commentators emphasized that prolonged freezing of subnational public accounts without judicial oversight raises serious administrative and constitutional concerns.

┌────────────────────────────────────────────────────────────────────────┐
│             EFCC 72-HOUR ACCOUNT FREEZE LEGAL MATRIX                   │
├────────────────────────────────────────────────────────────────────────┤
│ • Targeted Institution: Osun State Government Statutory Account        │
│                                                                        │
│ • Statutory Basis     : Section 7(6) Money Laundering Act, 2022 &      │
│                         Section 38 EFCC Establishment Act, 2004       │
│                                                                        │
│ • Initial Window      : 72 Hours (Temporary stop order without court) │
│                                                                        │
│ • Extension Threshold : Section 34 Court Order required beyond 72 hrs  │
│                                                                        │
│ • Core Dispute        : Alleged ₦11bn Ecological/FAAC fund movement    │
│                         vs Subnational financial & civil operational   │
│                         autonomy                                       │
└────────────────────────────────────────────────────────────────────────┘

“72-Hour Statutory Powers Do Not Require Prior Court Order”

If the directive was intended to operate as a stop order for a period not exceeding 72 hours under Section 7(6) of the Money Laundering Act, a prior court order was not required. However, if the EFCC intended the restriction to continue beyond the statutory 72-hour period, it ought to obtain an interim freezing order under Section 34 of the EFCC Act.” Wolemi Esan, Senior Advocate of Nigeria

“The EFCC undoubtedly possesses broad investigative powers, but those powers must be exercised within statutory and constitutional limits. The restriction of a state government’s statutory allocation account without judicial authorisation raises serious constitutional and administrative law questions, particularly because the funds are intended for the discharge of governmental responsibilities.” Yinka Oyesomi, Legal Practitioner

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