AN ANALYSIS OF THE LEGALITY AND ENFORCEABILITY

IN NIGERIA OF THE FOREIGN ACCOUNT TAX

COMPLIANCE ACT (FATCA).

BY

ZEPHANIAH, JEREMIAH OSITADINMA

MATRIC NO. 159061003

A PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE

AWARD OF THE DEGREE OF MASTER OF LAW (LLM)
UNIVERSITY OF LAGOS, AKOKA, LAGOS

MARCH 2021

1
DECLARATION

I Jeremiah Zephaniah, with matric no: 159061003 hereby declare that this project is a product

of my research work. To the best of my knowledge, this research has never been published or

presented by anybody, anywhere or by any institution or organisation.

-------------------------------------- ---------------------------------

JEREMIAH ZEPHANIAH DATE

2
CERTIFICATION

This is to certify that this dissertation written by Jeremiah Zephaniah, with matriculation number

159061003 was supervised and has been approved by me having satisfied the requirements of the

school of postgraduate studies, University of Lagos, for the award of Master of Law (L.L.M)

Degree.

………………………………… …..…………………………………..
DR M. A. AYOADE, mni DATE
THESIS SUPERVISOR

3
DEDICATION

This work is dedicated to God and all who serve humanity.

4
ACKNOWLEDGEMENTS

I would like to express my unusual thanks to my Supervisor Dr. M. A. Ayoade, mni for the

continuous support of my thesis, for his patience, motivation, enthusiasm, and immense

knowledge. His guidance helped me in all the time of research and writing of this thesis. I could

not have imagined having a better advisor

Secondly, I would also like to thank my spouse and parents for their overwhelming support through

this thesis.

Lastly, my overwhelming thanks goes to the leadership of Legal Department of Union Bank of

Nigeria Plc having granted me the requisite permission to conclude this work. Their Library

resources was also of immense importance in course of this work.

5
TABLE OF STATUTES

Local Statutes
• Banks and Other Financial Institutions Act, CAP B3, Laws of the Federation of Nigeria,

2004.

• Central Bank of Nigeria Act, (as Amended 2007), CAP B3 Laws of the Federation of

Nigeria 2004.

• Companies and Allied Matters Act, Cap C20 LFN, 2004 Company Income Tax Act, Cap

C21, Laws of the Federation of Nigeria, 2004.

• Company Income Tax Act, Cap C21, Laws of The Federation of Nigeria, 2004.

• Constitution of Federal republic of Nigeria, Cap C 24, Laws of the Federation of Nigeria,

2004 (as amended).

• Freedom of Information Act, 2011

• Interpretation Act, CAP. 123 Laws of the Federation of Nigeria, 2004.

• Nigerian Investment Promotion Commission (NIPC) Act, Cap NI 17 Laws of the

Federation of Nigeria, 2004.

Foreign Statutes
• Foreign Account Tax Compliance Act (FATCA), 2011 of the United States of America,
Public Law 111-147; 124 Stat 71, 97-117, enacted by the 111th United States Congress,
effective (March 18, 2010 (26 USC § 6038D); December 31, 2017 (26 USC §§ 1471-1474).

LIST OF CASES

• A.C.B Ltd vs. Alao (1994) 7 NWLR (Pt. 358) 614

6
• Abacha v Fawehinmi [2000] 6 NWLR Part 660 p 228.

• Alade vs. ALIC (Nig) Ltd & Anor. (2010) 12 S.C (Pt. II) 59 at 95

• Attorney General of New Zealand v Ortiz (1983) 3 All ER 93

• Belgium v Spain - Barcelona Traction, Light and Power Company, Limited (New

Application: 1962) - Judgment of 5 February 1970 - Second Phase - Judgments [1970] ICJ

1; ICJ Reports 1970, p 3; [1970] ICJ Rep 3 (5 February 1970) The Arantzazu Mendi (1939).

A. C. 256, at pp. 263-265.

• Brex v. Smith , 104 N.J Eq.386, 146 A. 34 (1929)

• Cook v. Tait, 265 U.S. 47, 56 (1924).

• Deal v. Bank of Smithville , 52 S.W 2d201(Mo.1932)

• Ekiadolor vs Osayande (2010) 6 NWLR (Pt. 1191) 423, CA.

• First State Bank v. Parker , 28 S.W 2d 269 (Tex. Civ. App. 1930)

• Foley Bros. v. Filardo, 336 U.S. 281, 285 (1949).

• Government of India v Taylor [1955] AC 491, [1955] 1 All ER 292, (1955) 27 ITR 356.

• Habib (Nig.) Bank Plc v. Koya (1992) 7 NWLR (PT.251) 43.

• International Bank of West Africa Ltd v Kennedy Transport (Nig) Ltd (1993) 7 NWLR (Pt

304) 238

• JFS Investment Ltd vs. Brawal Line Ltd & 2 Ors (2010) 12 S.C (Pt. 1) 110.

• L.E. Nwosu v. Zenith Bank Plc (2015) 9 NWLR (PT.1464) 314 at pp.333-334

• Matthews v Chicory Marketing Board (1938) 60 C.L.R. p 263 at 276

• Nigeria vs Ifegwu (2003) 5 S.C.N.J 217@ 249; (2003) 15 NWLR pt 842 113

• Offshore International vs FBIR (2011) 4 TLRN 59.

• Okoko vs The State (1967) NMLR 189; Alli vs Okulaja (1971) 1 (U.I.L.R) 72

7
 • Parry-Jones v Law Society [1969] 1 Ch. 1 and Banker Trust Co v Shapira [1980]1

W.L.R. 1274; [1980] 3 All E.R. 353.

• Schrems v. Data Protection Commissioner 6th October, 2015, Court of Justice of the

European Union (Case C-362/4)

• The Apollon, 22 U.S. 362, 370 (1824).

• Tournier v National Provincial and Union Bank of England [1924] 1 K.B. 461.

• Unilife Development Company Ltd vs. Adeshigbin (2001) 2 SC 43;

• United Bank for Africa Plc v. Eye-Gymineral Resources Ltd (2009) All FWLR (PT. 486)

1951.

• United Bank for Africa Plc v. Wasiu (2017) 4 NWLR (Pt. 1555) 318 at 339 C-

• United States v. First National Bank, 67 F.Supp.616 (S.D Ala.1946).

TABLE OF ABBREVIATION

• ADCS- Alliance for the Defence of Canadian Sovereignty.

• AEOI- Automatic Exchange of Information.

• BRS- Business Requirement Specification.

• CBN- Central Bank of Nigeria.

• CRA- Canada Revenue Agency.

• DOJ- United States of America, Department of Justice.

• FATCA- Foreign Account Tax Compliance Act.

• FBAR- Report of Foreign Bank and Financial Accounts.

• FFI- Foreign Financial Institutions.

8
• G7- Group of Seven.

• GIIN- Global Intermediary Identification Number.

• HIRE ACT- The Hiring Incentives to Restore Employment Act, 2010.

• IGA- Intergovernmental Agreements.

• IRC- Internal Revenue Code (of United States of America).

• IRS- Internal Revenue Service (of United States of America).

• NATO- North Atlantic Treaty Organization.

• NFFE- Non-financial Foreign Entities.

• NORAD- North American Aerospace Defence Command.

• OVDP- Overseas Voluntary Disclosure Program.

• US- United States of America.

9
ABSTRACT

Over the years, tax evasion, had remained a never-ending nightmare for virtually all sovereign

states. This usually takes the shape of offshore tax abuses primarily from the use of concealed and

undeclared accounts held by tax-payers or their controlled foreign entities. Series of international

and bi-lateral tax treaties had existed amongst nations as a panacea, but same had relatively

remained elusive as tax defaulters had increased by the day. Ideally, these existing tax treaties, had

recognised the importance of individual territorial sovereignty of respective states.

The Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 by the Congress of

United State of America and came into effect on January 1, 2013. FATCA is by far the most

extraordinary example of Congressional extraterritorial legislation in United State of America’s

(US) history. Shunning the traditional practice in international law of limiting national legislation

to the territory of the sovereign, the U.S. Congress explicitly crafted FATCA to impose egregious,

continuing due diligence and reporting obligations on virtually all financial institutions in the

world, Nigeria inclusive.

This work tends to, within the International and Nigerian context, examine the legality and

enforceability of this Act. The work also reviews the dilemma faced by commercial institutions

especially in Nigeria, between complying with the provisions of this extra-territorial law and

breach of extant local laws, regulating banker-customer relationship in Nigeria. The writer also

10
reviewed the operations, applicability and reach of FATCA, in some selected jurisdiction drawing

workable recommendations for the Nigerian financial sector. Reviewed Jurisdiction were selected

in line with their international importance, regional proximity and ideological preference.

AN ANALYSIS OF THE LEGALITY AND ENFORCEABILITY IN NIGERIA OF THE

FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

TABLE OF CONTENTS
PRELIMINARY
I. Declaration
II. Certification.
III. Dedication
IV Acknowledgement.
V Table of Statutes
VI List of cases
VII Table of abbreviations.
VIII Abstract.
IX Table of contents
X Bibliography.
XI Appendix

CHAPTER ONE
INTRODUCTION
1 Introduction/Background of the Study 1

1.1 Statement of Problem 4

1.2 Significance of the study 4

1.3 Objectives of the Study 5

11
1.4 Research Questions 5

1.5 Research Methodology 6

1.6 Scope/Limitation of the Research 6

CHAPTER TWO
CONCEPT OF FOREIGN ACCOUNT TAX COMPLIANCE ACT
2.1 What is Foreign Account Tax Compliance Act? 7
2.2 How FATCA Works? 9

2.2.1. Withhold able Payment 12

2.2.2 How FATCA Applies to FFIs? 13

2.2.3 What is an FFI? 13

2.2.4 US Account of an FFI 14

2.2.5 US Persons Are Covered 15

2.2.6 IRS Agreement and Registration 16

2.2.7 Exempted Entities 17

2.2.8 Failure to Register and Report 18

2.2.9 FATCA and Intergovernmental Agreements (IGA's) . 18

2.2.10 General Criticism of FATCA. 20

2.3 Introduction of Foreign Account Tax Compliance Act in Nigeria. 28

CHAPTER THREE

12
APPLICABILITY AND ENFORCEABILITY OF THE FATCA IN NIGERIA
3.1 FATCA in Nigeria. 30
3.2 Criticism of the Application in Nigeria. 31
3.2.1 Banker-Customer Duty of Confidentiality. 32
3.2.2 Applicability of Foreign Laws in Nigeria. 38
3.2.3 Cost Implication on Nigerian Banks. 42
3.2.4 National Security. 42
3.3 Reactions of Nigerian Commercial Banks. 43
3.4 Critique of the Positions Adopted by Nigerian Banks. 56
3.4.1 Banks Complying without Customer’s Consent. 56
3.4.2 Banks with Contractual Right of Compliance. 58
3.4.3 Non-Compliant Commercial Banks. 59

CHAPTER FOUR
APPLICATION OF FATCA IN SOME SELECTED JURISDICTIONS

4.1 Canada 60
[

4.2 Russia 68

4.3 South Africa 73

4.4 Lessons for Nigeria. 75

CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion 77
5.2 Recommendations 79

13
CHAPTER ONE

GENERAL INTRODUCTION

1. Background of the Study

The Foreign Account Tax Compliance Act (FATCA) is a United States (US) statute which require

all Financial Institutions (FIs) outside the territorial jurisdiction of the US (also known as Foreign

Financial Institutions, or FFIs) to regularly and consistently submit information on financial

accounts held and owned by US persons to the US Internal Revenue Service (US IORS). The

reason and intent of the US in the enactment of this law is to deter and detect US tax evasion using

foreign financial accounts. Therefore, failure to comply with the reporting obligations under

FATCA will result to the US government imposing a 30% withholding Tax on certain gross

payments made from the US to non-compliant FFIs.1

For over a century, progressive ideology has methodically eroded American principles and

freedoms. The roots of progressivism stem from socialism and subscribes to the misguided belief

that America, her freedoms and capitalism stand in the way of a utopian secular society. The term

“Progressive” is descriptive of the agenda itself; gradual steps towards an end goal which condition

the masses for change. Progressivism is slowly eroding our individual freedoms while at the same

time bolstering ideas of global government and so-called collective rights.2

1
Foreign Account Tax Compliance Act (FATCA), 2011 of the United States of America, Public Law 111-
147; 124 Stat 71, 97-117, enacted by the 111th United States Congress, effective (March 18, 2010 (26 USC §
6038D); December 31, 2017 (26 USC §§ 1471-1474).; Available at www.irs.gov Accessed on 28 January 2021.
2
Jennifer Grant. It is About Control: Progressivsm, FATCA and Global Law Prospectives on Federalsim,
Volume 8, Issue 3, 2016 P.87.
Available on https://content.sciendo.com/configurable/contentpage/journals$002fpof$002f8$002f3$002farticle-pE-
87.xml#affiliation. Accessed on 28 January 2021.

14
To ultimately achieve the redistributive goals of progressivism, global control is a necessary

precursor. As such, principles of freedom, specifically those of individual liberties and national

sovereignty, must be eroded. This is precisely why progressives argued that the United States

Constitution and other founding documents are outdated, “living documents” that can change over

time. This is because those documents lay out that individual rights do not come from government,

as such the government’s only role is to protect them. Global control is not possible without the

erosion of such principles.

The Foreign Account Tax Compliance Act (“FATCA”) is a Progressive step towards global

economic control.3 From 2008-2010, Progressives in the United States controlled both Houses of

Congress and the White House. Not surprisingly, several highly controversial laws were passed

during this time. One such piece of legislation is FATCA. FATCA’s stated goal is to deter tax

evasion. That, however, is nothing but a talking point. FATCA is a Progressive step which slowly

normalizes ideas of (1) global control, (2) violations of national sovereignty and (3) loss of

individual rights, especially privacy.4

The FATCA was passed as a part of the HIRE Act generally requires that the foreign financial

institutions and certain non-financial foreign entities give a report of all the assets held by citizens

of the US or be subject to withholding on withholdable payments. The HIRE Act also contained

legislation requiring U.S persons to report, depending on the value, their foreign financial accounts

and foreign assets. 5 With the passage of the Foreign Account Tax Compliance Act (FATCA) by

the United States congress, it seems the fears of all global operators have been heightened. By this

3
Ibid
4
Ibid
5
Ibid

15
law, all nations of the world have been thrown into the mercies of financial reporting of specified

accounts to the United States Government without a corresponding duty from the United States.

Although immense power is given to the Internal Revenue Service (“the Service”) under the

FATCA regime, it will eventually succumb to the weight of global authorities. Once the rest of the

world is conditioned to report to a global authority, the United States will find it impossible not to

conform. As it has been predicted, “over the next 20 to 30 years, we are going to end up with

world government. It is inevitable FATCA has thrust (the world) toward global, centralized

control.6

The implementation of FATCA has been surrounded by many controversies. FATCA itself was

never passed as legislation on its own. It is stealth legislation. In theory, all federal laws should be

revenue neutral going forward. Therefore, FATCA was included in the bill as an offset to costs in

the HIRE Act. Although the strategy of passing stealth legislation without public support or debate

is contrary to America’s founding principles, it is not shocking considering the political climate at

the time. What is shocking, however, is the unprecedented nature of FATCA. Although FATCA

was signed into law in 2010, a full implementation was not attempted until 2014 due to difficulties

caused by the far-reaching arms of this legislation.

Therefore, this work shall attempt to investigate the enforceability and legality and how successful

and effective its implementation in Nigeria has gone since its inception despite the numerous

controversies surrounding it.

6
Ibid

16
1.1 Statement of Problem

The Foreign Account Tax Compliance Act is an innovation in form of legislation by the

Government of the United States to checkmate and ensure tax compliance by its citizens who have

assets and account outside the territorial boundaries and borders of the United States. The hub and

crux of this research is centred at looking at the how effective or successful the implementation of

this seemingly controversial legislation has been within the territorial space of Nigeria.

Therefore, the writer or researcher shall examine its implementation. To be considered also is the

reactions and/or criticisms of the various commercial banks in Nigeria regarding the legality of the

FATCA placing side by side with the duties of confidentiality that exists and guides their

relationships with the customers.

The legality of the strict implementation of the FATCA which some commercial banks have

viewed as a breach of their duties of confidentiality with the customers is also necessitated by the

fear of sanctions to be imposed by the U.S Government for non-compliance. This has led to players

in the financial sector, adopting and adapting serial modes and means of implementation,

obviously differing from one commercial bank to the other. The works carefully examines the

what and how.

1.2 Significance of the study

The main aim and purpose of this research is to critically examine the legal status of the application

and enforcement of the Foreign Account Tax Compliance Act, especially in Nigeria. A good

knowledge of same, would assist define its impact and effectiveness. This is significant in the

sense that it would assist as a guide, most importantly to Nigerian commercial banks who bear the

major burden of the enforceability of the very criticized provisions of FATCA.

17
The study is also interested in knowing how to balance up between the implementation of the

FATCA and the numerous duties owed the customers of commercial banks including the duty of

confidentiality and a host of others. Having known this, the researcher is also interested in knowing

the illegality as canvassed by several customers of commercial banks and what measures are

employed by these commercial banks in maintaining the balance between implementation of the

FATCA and customer satisfaction.

1.3 Objectives of the Study

The objectives of this research are as follows:

(i) To critically examine the FATCA and its provisions in knowing the legality Act in relation

to bank-customer relationship.

(ii) To highlight and review the modes and procedure of implementing the FATCA.

(iii) To critically examine the effectiveness of the implementation of the FATCA in some

jurisdictions of the world.

(iv) To analyse the enforcement procedures and the legality of the enforcement of the FATCA

in Nigeria.

(v) To scrutinise the means adopted by commercial banks to avoid a breach of the duty of

confidentiality owed customers in the interpretation of the FATCA.

1.4 Research Questions

The very dominant questions the researcher seeks to answer in this work are:

i) What are the provisions in FATCA that define and protect the bank-customer relationship?

18
(ii) What are the modes and procedure of implementing the FATCA used by commercial

banks?

(iii) What is the effectiveness of the implementation of the FATCA in some jurisdictions of the

world?

(iv) What are the enforcement procedures and the legality of the procedures in enforcing the

FATCA in Nigeria?

(v) What are the means adopted by commercial banks to avoid a breach of the duty of

confidentiality owed customers in the interpretation of the FATCA?

1.5 Research Methodology

The methodology to be employed is qualitative essentially library based. The research shall rely

on both primary and secondary sources of information. The primary sources shall include,

interviews and surveys; while the secondary sources cover; text books, journal articles, reports,

periodicals and internet materials. The data to be obtained there from shall be subject to content

analysis. The work also made use of written materials by relevant authors in the financial industry

and employed results of empirical research and statistics of current events and trends in the

industry.

1.6 Scope/Limitation of the Research

The scope of this research will revolve and centre around the Foreign Account Tax Compliance

Act and its application within some jurisdictions of interest. The research will go deep in finding

and/ or tracing the root the legality of the enforceability of the FATCA in Nigeria.

19
CHAPTER TWO

FOREIGN ACCOUNT TAX COMPLIANCE ACT7

2.1 What is FATCA?

FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using

foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS

(Internal Revenue Service) information about financial accounts held by U.S. taxpayers, or by

foreign entities in which U.S. taxpayers hold a substantial ownership interest. 8

FFIs are encouraged to either directly register with the IRS to comply with the FATCA regulations

(and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements

(IGA) treated as in effect in their jurisdictions.

While describing FATCA, an author stated that:

FATCA, requires foreign financial institutions to provide information to the US

government regarding US account holders for the purpose of reducing offshore tax
evasion9.
It was further stated that FATCA focuses on taxes believed to be unpaid by individuals with assets

hidden outside the United States.10 Given that there was at that moment no effective way to track

such accounts, FATCA is specifically designed to deal with this information deficit by imposing

extensive reporting obligations upon foreign financial institutions (FFIs).

7
Sourced from https://tax.thomsonreuters.com/fatca-crs/what-is-crs-fatca/ accessed 22 January 2021.
8
As described by the Internal Revenue Service (United States of America), available at
https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca accessed on 22 January 2021
9
De Simone, Lisa, et al. “Transparency and Tax Evasion: Evidence from the Foreign Account Tax Compliance
Act (FATCA).” Proceedings. Annual Conference on Taxation and Minutes of the Annual Meeting of the National
Tax Association, vol. 110, 2017, pp. 1–49. Available on, www.jstor.org/stable/26794455. Accessed 22 January 2021.
10
Bean, Bruce W. and Farnsworth, Abbey, The U.S. Foreign Account Tax Compliance Act: American Legal
Imperialism? (February 25, 2015). ILSA Journal of International & Comparative Law, Vol. 21, No. 2, 2015.

20
This prompted the direct description by ING Bank that, the Foreign Account Tax Compliance Act

(FATCA) is a US law designed to prevent offshore tax evasion by US persons.11

In United States, all assets of American taxpayers, are subject to the provisions of the Internal

Revenue Code (IRC).12 The essence of FATCA is thus to enhance global reporting and provide a

presumed effective system of tracking offshore assets held by American tax payers.

FATCA enacted Section 6038D, which generally requires individuals holding “specified financial

assets” in excess of $50,000 during a year to report these assets with their Form 1040.13 The

reporting requirement takes effect on preceding year basis.14 This requirement applies in addition

to the requirement to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts

(FBAR), with the US, Treasury.15

To review its extraterritorial reach, an author has explained that:

FATCA is the most extraordinary extension of Congressional extraterritorial

overreach ever enacted. Traditionally, acts of Congress are deemed to apply only
domestically unless there is an explicit intention to have an impact beyond the
territory of the United States.16
After years of talk and numerous Congressional hearings, FATCA was finally introduced in 2009

by Representatives Charles Rangel of New York and Richard E. Neal of Massachusetts. Additional

hearings on the offshore tax problems of the IRS were held and FATCA was ultimately

11
Foreign Account Tax Compliance Act - Frequently Asked Questions. Available at
https://www.ing.com/About-us/Compliance/FATCA.htm, accessed on 27th January 2021.
12
See 26 U.S.C. § 1471; 26 Internal Revenue Code § 61(a) (2012) (“[I]ncome from whatever source
derived”); Cook v. Tait, 265 U.S. 47, 56 (1924) (upholding constitutionality of imposing taxes on
income outside the United States).
13
R. C. 6038D (West 2011).
14
Ibid
15
31 C.F.R. 103.24 (2011)
16
Andrew F. Quinlan, FATCA and US Fiscal Imperialism Threaten To Sink Global
Economy, THE DAILY CALLER (Mar. 19, 2013), available at www http://dailycaller.com/2013/03/19/fatcaand-us-
fiscal-imperialism-threaten-to-sink-global-economy/2. Accessed on 27th January 2021

21
enacted as an addendum to the Hiring Incentives to Restore Employment Act (HIRE Act) and

signed by President Obama on March 18, 2010.17

2.2 Commencement of the Act

The commencement of enforcement of the law was nonetheless delayed due to international

pressure. However, the final Foreign Account Tax Compliance Act (FATCA) regulations issued

in the United States of America on January 17, 2013, outlined far-reaching new U.S. tax

compliance obligations effective January 1, 2014.18

2.3 Objective of the Act.19

The overall purpose is to detect, deter and discourage offshore tax abuses through increased

transparency, enhanced reporting and strong sanctions. The ultimate goal of the legislation is for

the United States to obtain information with respect to offshore accounts and investments

beneficially owned by US taxpayers rather than to collect any tax through the new withholding

regime.20

In more specific terms, the purpose of FATCA is to ensure that US can identify and collect the

appropriate tax from US Persons holding financial assets outside the USA.21

As a check to tax evasion, the TMF Group observes that:

17
HIRE Act: Questions and Answers for Employers, IRS (Oct. 14, 2014),
Available at www. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/HIRE-Act-Questions-and-
Answersfor-Employers. Accessed on 27th January 2021.
18
Ibid
19
Marsan, Dean, FATCA: The Global Financial System Must Now Implement a New U.S. Reporting and
Withholding System for Foreign Account Tax Compliance, Which Will Create Significant New Exposures –
Managing this Risk (Part I) (July 1, 2010). Taxes – The Tax Magazine, Vol. 88, No. 7, pp. 27-92, 2010.
20
Ibid, also, at www. https://www.citi.co.in/portal/standalone/Dec15/Banking/pdf/FATCA-PADD-FAQs.pdf
accessed on 27th January 2021.
21
Foreign Account Tax Compliance Act: New Tax Information Reporting and Withholding Regime: Amicorp.
https://www.amicorp.com/AmiNews/FATCA/pdf/English.pdf accessed on 27th January 2021.

22
 The fundamental objective of FATCA is to identify those U.S. persons who may
be evading tax using offshore investment vehicles and to ensure that the Internal
Revenue Service ("IRS") can identify and collect the appropriate amount of tax
from all U.S. persons.22

2.4 Reasons for the Act

Based upon some compelling commentary suggesting that Americans may not enjoy paying

income taxes, one way for a few Americans to reduce income taxes paid to the IRS has apparently

been to sequester funds outside the territorial limits of the United States. People associate such

offshore accounts with sophisticated criminals and money laundering, spies, and corrupt third

world politicians. But in the view of the IRS, many American foreign account holders who do not

self-identify as spies, criminals or politicians seek to reduce their personal income taxes by

stashing funds in Switzerland and elsewhere.23

Early efforts to deal with offshore accounts held by Americans include the Foreign Bank Account

Report (FBAR) first mandated in 1970 by the Bank Secrecy Act24.

The FBAR is a form required by the Treasury Department to be filed each year separately from

income tax filings with the IRS. The purpose of the FBAR mandate is to collect information to aid

in exposing money laundering and terrorist financing. FBAR filing continues to be required for

U.S. citizens with foreign accounts, but this self-reporting system is insufficient and ineffective on

its own as it were.25

22
FATCA Policy: TMF Group: Available at https://www.tmf-group.com/en/about-us/who-we-are/fatca-
policy/ accessed on 28 January 2021.
23
Bean, Bruce W., Ibid.
24
31 U.S.C. § 5314(a).
25
Melissa A. Dizdarevic, The FATCA Provisions of the Hire Act: Boldly Going Where No
Withholding Has Gone Before, 79 FORDHAM L. REV. 2967 (2011).

23
To remedy the underreporting system with FBAR, pursuant to Treasury Regulation 1.1441-1, the

IRS attempted to enlist foreign banks in a reporting scheme to provide the identity of U.S. citizens

having offshore bank accounts with the Qualified Intermediary Program. The program required

foreign banks to report details of accounts registered in the names of American citizens but

excluded identities of non-U.S. clients and corporations if the FFI found that the appropriate

amount of tax was being withheld on payments deemed to be paid from a “U.S. source” to the non-

U.S. clients. Not surprisingly, international banks quickly found ways to defeat the program and

aid their U.S. clients by suggesting and encouraging loopholes to avoid exposure.26

The Qualified Intermediary Program also soon, lent itself to abuse and could no longer yield

required result, the IRS established the Overseas Voluntary Disclosure Program (OVDP) in 2009.

This program was reopened with less advantageous terms in 2011 and again in 2012.

These programs provided incentives directly to U.S. taxpayers, including reduced civil penalties

and freedom from criminal prosecution for voluntary disclosure of previously unreported offshore

accounts. The limited success of the QI and OVDP programs has led to the remarkably more

aggressive and innovative mechanisms of FATCA.27

It has been argued by the IRS that this legislation (FATCA) is a direct result of the focus by the

United States (and other industrialized and developing countries) on combating offshore tax

evasion and recouping much needed tax revenues.

The legislation was proposed to remedy perceived deficiencies in the current methods used by the

US Internal Revenue Service (IRS) and the US Department of Justice (DOJ) to identify US persons

26
Bean, Bruce W,Ibid.
27
Ibid,

24
who utilize foreign financial accounts or foreign entities and thereby provide more information to

the IRS to enforce compliance.

ShieldGeo, succinctly captures the summary, when it states that, the real purpose of FATCA is to

uncover the accounts and assets of US citizens, in order to reduce tax evasion by locating accounts

held in foreign jurisdictions.28

2.5 How FATCA works?

The basic requirements of FATCA command Foreign Financial Institutions (FFIs) and certain

other Non-financial Foreign Entities (NFFE) to disclose information directly to the IRS about

financial accounts held by U.S. taxpayers or face harsh penalties. The IRS has sought to make

certain that no potentially qualifying institutions will slip through the cracks by including the

broadest possible definition of “foreign financial institution” and with holdable payments in

FATCA.

2.5.1. Withhold able Payment.

A Withhold able Payment, except as otherwise provided by the IRS pursuant to its broad grant of

regulatory authority, means (1) any payment of interest (including any original issue discount),

dividends, rents, salaries, wages, premiums, annuities, compensation, remunerations, emoluments

and other fixed or determinable annual or periodical gains, profits and income from sources within

the United States; (2) interest paid on deposits by foreign branches of domestic banks (which

normally would be foreign source income); and (3) gross proceeds from the sale or other

28
FATCA Tax Compliance, ShieldGeo Publications. Available at www. https://shieldgeo.com/tax-
compliance-what-is-fatca-and-who-is-affected/ accessed on 27th January 2021.

25
disposition of US stocks and securities. This is however subject to certain exceptions as specified

under the Act.29

2.5.2 How FATCA Applies to FFIs?

An FFI that derives a Withhold able Payment is subject to a 30% US withholding tax unless:

• The FFI enters into an IRS agreement and complies with its terms and conditions;

i.e., Participating FFI.

• The FFI is deemed to meet the IRS reporting requirements; i.e., a Deemed Compliant

FFI.

• The FFI is exempted from application of the FATCA rules; e.g., such as a governmental

entity.30

2.5.3 What is an FFI?

The IRS has sought to make certain that no potentially qualifying institutions will slip through the

cracks by including the broadest possible definition of “foreign financial institution” in FATCA

The term FFI is broadly defined and includes three categories of non-US entities:

• Entities that accept deposits in the ordinary course of a banking or similar

business, to include commercial banks, savings banks, savings and loan

associations, thrifts, credit unions, building societies and other cooperative banking

institutions.

29
I.R.C. §§ 1441–1443, 1445, 1446 (2006). Tax Withholding Types, Internal Revenue Service, available at
http://www.irs.gov/businesses/small/international/article/0,,id=104910,00.html accessed on 27 th January 2021.

30
26 U.S.C. § 1471(d)(4)

26
 • Entities that as a substantial portion of their business hold financial assets for the

account of others, to include broker-dealers, clearing organizations, trust

companies, custodial banks and entities acting as custodians with respect to the

assets of employee-benefit plans.

• Entities that are engaged or hold themselves out as being primarily engaged in the

business of investing, reinvesting or trading in securities, partnership interests,

commodities or any derivative interest therein, to include mutual funds (or their

non-US equivalents), hedge funds, private equity and venture capital funds, other

managed funds and investment vehicles whether widely held or privately owned.31

2.5.4 US Account of an FFI32

For an account to be covered by FATCA, it must constitute a financial account that is owned,

directly or indirectly, by a United State person (US Account). Financial account herein, except as

otherwise provided by the IRS, means with respect to an FFI: (1) any depository account

maintained by the FFI; (2) any custodial account maintained by the FFI; and (3) a non-publicly

traded debt or equity interest in an FFI. Accounts which does not exceed $50,000.00 are not

compulsorily covered.

31
U.S.C. § 1471(d)(4) (“Foreign financial institution: The term “foreign financial
institution” means any financial institution which is a foreign entity. Except as otherwise provided by
the Secretary, such term shall not include a financial institution which is organized under the laws of any
possession of the U.S.”); at § 1471 (d)(5). Except as otherwise provided by the Secretary, the term “financial
institution” means any entity that:
(A) accepts deposits in the ordinary course of a banking or similar business, (B) as a substantial portion of its
business, holds financial assets for the account of others, or (C) is engaged (or holding itself out as being engaged)
primarily in the business of investing, reinvesting, or trading in securities (as defined in section 475(c)(2)
without regard to the last sentence thereof), partnership interests, commodities (as defined in section 475(e)(2)), or
any interest (including a futures or forward contract or option) in such securities, partnership interests, or
commodities. Also available at https://www.irs.gov/businesses/corporations/information-for-foreign-financial-
institutions, accessed on 27 January 2021.
32
Id. at 5876 (“The final regulations exempt from review entirely any preexisting accounts
held by individuals with a balance or value of $50,000 or less.”).

27
2.5.5. US Persons are Covered.

A specified US person as defined by the Act includes;

i) a US citizen and resident,

ii) a privately-owned domestic corporation (but does not include a publicly traded

company and its more than 50 percent controlled affiliates),

iii) a domestic partnership,

iv) a domestic trust, if a court within the United States is able to exercise primary

supervision over the administration of the trust (the “Court test”) and one or more

US persons have the authority to control all substantial decisions of the trust (the

“Control test”)

v) US Owned Foreign Entity. The foreign entity covered is a foreign entity which has

one or more Substantial US Owners. A Substantial US Owner means, with respect

to a corporation, any specified US person that owns, directly or indirectly, more

than 10% of the stock of such corporation by vote or value

vi) The government of the United States, any State, municipality or other political

subdivision, any wholly owned agency or instrumentality of such governments.33

On who is a US citizen, the United States Constitution provides a very broad definition of what

constitutes a US citizen34.

33
26 U.S.C. § 1471(b)(1)(A)‒(B); 7701(a)(30) ; see also Regulations Relating to Information Reporting
by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions
and Other Foreign Entities, IRS § III (Apr. 8, 2013), available at http://www.irs.gov/irb/2013-
15_IRB/ar16.html (visited on 27th January 2021). “Section 1471(b)(1)(A) and (B) requires an FFI that
enters into an FFI agreement (a participating FFI) to identify its U.S. accounts and comply with
verification and due diligence procedures prescribed by the Secretary.”
34
8 U.S.C. § 1401(c) (2012); 8 U.S.C. § 1401(d); 8 U.S.C. § 1401(e)

28
 Each person born in the United States is by default a U.S. citizen pursuant to Section

1 of the 14th Amendment to the U.S. Constitution. A person born outside of the

United States who has two parents who are U.S. citizens, one of whom is a resident

of the United States, is a citizen of the United States); A person born outside of the

U.S. and its outlying possessions of parents one of whom is a citizen of the U.S.

who has been physically present in the U.S. or one of its outlying possessions for a

continuous period of one year prior to the birth of such person, and the other of

whom is a national, but not a citizen of the U.S. A person born in an outlying

possession of the U.S. of parents one of whom is a citizen of the U.S. who has been

physically present in the U.S. or one of its outlying possessions for a continuous

period of one year at any time prior to the birth of such person.

This in turn shows broaden the net and reach of FATCA, casting doubt on the right of individual

persons to determine country of origin in terms of fiscal relation.

2.5.6 IRS Agreement and Registration35

Under FATCA, to avoid being withheld upon, Foreign Financial Institutions (FFIs) may register

and enter into an agreement with IRS. The IRS agreement requires that the FFI (to include its more

than 50% owned affiliates, unless an affiliate enters into a separate IRS agreement) to agree:

a. To obtain such information regarding each holder of each account maintained by the FFI

as is necessary to determine which accounts (if any) are US Accounts;

35
78 Federal Regulation. at 5874, also available at http://www.irs.gov/pub/irs-drop/ accessed on 27th January
2021.

29
 b. To comply with IRS verification and due diligence procedures with respect to the

identification of U.S. accounts;

c. To annually report US Account information to the IRS as specified by the Act;

d. To withhold 30% on Pass thru Payments; i.e., withhold able Payments made by an FFI to

a Recalcitrant Account Holder or a Non-Compliant FFI.

e. To comply with additional IRS information requests with respect to US Account

f. Holders; and

g. To attempt to obtain a waiver in any case in which any foreign law would (but for the

waiver) prevent the reporting of information as required under this provision, and if a

waiver is not obtained within a reasonable period of time, to close the account.

Currently, the IRS, has established a FATCA Online Registration System is a secure, web-based

system that financial institutions (FIs) and direct reporting non-financial foreign entities (NFFEs)

may use to register themselves.36

An FFI that registers on the “FATCA Registration Website” (“Website”), upon approval, will

receive a Global Intermediary Identification Number (GIIN) from the IRS, unless the FFI is treated

as a Limited FFI.37

2.5.7 Exempted Entities.38

The Act exempt from its operations any payment beneficially owned by any:

• Foreign government (to include political subdivisions) and wholly owned agencies or

instrumentalities of a foreign government.

• International organizations (or wholly owned agencies or instrumentalities thereof).

36
Available at https://www.irs.gov/pub/irs-pdf/p5118.pdf, accessed on 27th January 2021.
37
Ibid
38
Ibid

30
 • Foreign central bank of issue.

• Any other class of persons identified by the IRS as posing a low risk of tax evasion.

2.5.8 Failure to Register and Report

Unless otherwise exempt, FFIs that do not both register and agree to report face a 30% withholding

tax on certain U.S. source payments made to them. This specifically means that the unregistered

FFI runs the risk of having its 30% of its funds of U.S origin withheld by the U.S government if

the IRS feels it is within the ambit of this reporting schedule.39

It has been argued that, aware of the enormity of obligations it was imposing upon the rest of the

world, the American Congress carefully crafted a draconian penalty to insure compliance.40

2.5.9 FATCA and Intergovernmental Agreements (IGA's)41

Due to the difficulty encountered in enforcement of FATCA in other jurisdictions, discussions

from financial industry lobbyists resulted in the creation of Intergovernmental Agreements (IGA's)

between the Executive Branch of the United States government with foreign governments. This

development resulted in foreign governments having to implement the US FATCA requirements

into their own legal systems, which in turn allowed those governments to change their privacy and

discrimination laws to allow the identification and reporting of US persons via those

39
Op cit; sections 1471 and 1472.
40
Robert W. Wood, FATCA Registration Goes Online, available at
http://www.forbes.com/sites/robertwood/2013/08/23/fatca-registration-goes-online/ accessed on 27 January 2021.
41
There are about 116 sovereign nations that have subscribed to the IGA with the US. Sourced from
https://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx. Accessed on 22/03/2017 by
10:00am. Unfortunately, no country in West Africa is under this list. This mean that, all compliant West African
countries have their FFIs reporting directly to the IRS.

31
governments.42 In an IGA, a government agrees that all of its financial institutions shall comply

with FATCA (whereas without the IGA each FFI would have been able to decide if it were to

comply with FATCA or not). With the IGA's, the private data of suspected US persons would be

collected and handled by the FFI's, whereas the governments would then collect and store that data

for further transmittal.

According to Deloitte categorization43, there are two categories of IGAs that are currently being

implemented, namely:

I. Model 1 regime:

FFIs that sign up to this IGA are required to report details of US account holders to the respective

governments of their jurisdictions, which will in turn pass them on to the US IRS. 5 out of the G7

countries (i.e. Canada, France, Germany, Italy and United Kingdom), as well as Australia, China,

Brazil, South Africa, Mexico, France and the Netherlands are some of the jurisdictions that have

signed up for this class of IGA. About 39 countries have signed up for this category in total.

II. Model 2 regime:

Under this regime, financial institutions report details of US account holders directly to the IRS.

Japan is the only G7 country that signed up for this category of IGA. Other jurisdictions that have

opted for this category are Chile, Switzerland, Bermuda and Austria.

42
Christians, Allison, What You Give and What You Get: Reciprocity Under a Model 1 Intergovernmental
Agreement on FATCA (April 12, 2013). Cayman Fin. Rev. April 2013, Available at SSRN:
https://ssrn.com/abstract=2292645. Accessed on 10 February 2021.
43
“Alleviating the Compliance Burden of US FATCA on Nigeria's Financial Services Industry
A Case for Government Intervention.” A Publication of Deliotte. Sourced from
https://www2.deloitte.com/ng/en/pages/tax/articles/inside-tax-articles/alleviating-the-compliance-burden-of-us-
facta-on-Nigeria-financial-services-industry.html. Accessed on 27 January 2021. Also, available at
https://www.irs.gov/pub/irs-pdf/p5118.pdf, accessed on 27th January 2021.

32
Another version of Model 1 IGA is Model 1B, which is available to jurisdictions like Nigeria that

do not have Tax Information Exchange Agreement or Double Taxation Agreement with the US. It

places an obligation on the government of such a country to obtain the information required under

FATCA with respect to all US' reportable accounts and to annually exchange this information with

the US on an automatic basis. It also accords such a country's government the right to determine

the amount and characterization of payments that will be covered by FATCA in that country.

Morse Susan44, while summarizing the relevance of the IGA, argued that, The IGAs address the

potential problem of lack of enforceability presented by FATCA. They have at least three

important components that contribute to relief from FATCA’s withholding tax. First, they allow

the rerouting of information about non-U.S. accounts. Rather than requiring direct reporting from

FFIs to the U.S. government, the IGA framework permits a nonU.S. government with jurisdiction

over an FFI to collect and forward information about U.S. accounts at the FFI to the U.S.

government. Second, the IGAs clarify and in some ways soften the due diligence requirements that

apply to determine whether an account is a reportable U.S. account. Third, the IGAs create explicit

exceptions for some types of exempt entities, financial institutions, or accounts.45

2.5.10 General Criticism of FATCA

The applicability of this Act has been criticized by US nationals and other international

commentators on the following grounds;

44
Morse, Susan C., Why FATCA Intergovermental Agreements Bind the U.S. Government (April 15, 2013).
Tax Notes International, Vol. 70, No. 3, 2013, Available at SSRN: https://ssrn.com/abstract=2252843. Accessed on
14 February 2021.
45
Ibid

33
 1. Heavy Implementation Cost.

The mechanics of FATCA compliance are unnerving all around and no attempt will be made in

this article to detail them46. Broadly speaking, to achieve initial compliance foreign banks must

enter into an agreement with the IRS, determine which of their accounts are “U.S. Reportable

Accounts,” and categorize the individuals and entities having accounts with that institution

according to FATCA. FATCA requires, foreign banks must identify all “U.S. persons” who have

accounts in excess of at least $50,000. U.S. persons who trigger the FFI due diligence and reporting

obligations for FFIs include U.S. legal entities of every kind, plus U.S. citizens. This is a continuing

requirement and thus some means of continuously tracking the amounts in accounts of U.S.

persons will need to be established.

One additional consequence of FATCA is that FFIs will henceforth need to conduct more

extensive due diligence on new customers to determine whether they are “U.S. persons.” Current

“know your customer” practices in place to deal with local AntiMoney Laundering protocols will

not be enough. As to existing accounts, the burdens are extremely cumbersome. Each FFI must

search its existing accounts for existing accounts for “indicia” which might suggest that the

account is associated with a U.S. person “indicium” which might suggest that the account is

associated with a U.S. person. This enforcement mechanism has been called a “death

sentence” and “[devastatingly] destructive.47 The technological, legal, and operational cost cannot

be over emphasized in light of existing rights and regulations in resident states.

46
Don Ryu., Setting the Stage: FATCA Compliance, An Oracle White Paper
January 2013. Available at https://www.oracle.com/us/industries/financial-services/setting-stage-fatca-compliance-
wp-1668471.pdf. Accessed on 28 January 2021.
47
Robert W. Wood, FATCA Registration Goes Online, available at
http://www.forbes.com/sites/robertwood/2013/08/23/fatca-registration-goes-online/ accessed on 27 January 2021.

34
 2. Possible capital flight.

The primary mechanism for enforcing the compliance of foreign financial institutions is a punitive

withholding levy on U.S. assets which The Economist speculated in 2011 might create an incentive

for foreign financial institutions to divest or not invest in U.S. assets, resulting in capital flight.48

3. Relevance.

United States does not have a wealth tax or any other tax upon financial assets. A wealth tax would

impose a levy on assets owned by an individual or household — as opposed to, for example, an

income tax. A wealth tax is usually defined as an annual tax levied on the net worth, or total assets

net of all debts, of an individual or household above an exemption threshold. Net worth is made

up of financial assets — such as bank accounts, bonds, stocks, and mutual funds — as well as non-

financial assets.49 Without a tax upon wealth, it is questioned as to why wealth is required to be

reported.50

4. Fairness.

Residents of the United States have not, in general, been required to report their financial assets to

the Internal Revenue Service. Non-residents are required to report asset values. A writer posits that

taxpayers in a favorable tax payment position are more likely to comply with tax authorities than

those in an unfavorable tax payment position. It was also the writers observation that, perceptions

of distributive and procedural fairness jointly moderate taxpayer compliance. Distributive fairness

48
The Economist. November 26, 2011
49
Peter G. Peterson Foundation: What is a Wealth Tax, Should the United States Have one? Available at
https://www.pgpf.org/blog/2020/01/what-is-a-wealth-tax-and-should-the-united-states-have-one accessed on 28th
January 2021.
50
Ibid.

35
is whether taxpayers have paid their fair share of taxes, and procedural fairness is the even-

handedness in procedures used to collect taxes.51

5. Foreign relations/Sovereignty.

Forcing foreign financial institutions and foreign governments to collect data on U.S. persons at

their own expense and transmit it to the IRS has been called divisive. It was also criticized on the

grounds of possible clash with foreign laws on non-disclosure, especially EU states, this had made

a writer describe it as the most extraordinary extension of Congressional extraterritorial overreach

ever enacted.52 A Grinberg, aptly stated thus:

FATCA seeks to require financial institutions with no jurisdictional nexus to the

United States whatsoever, to report account activity of a broad range of persons and
entities to the IRS. There is no doubt that in FATCA, Congress clearly and
explicitly determined that the U.S. Government was going to impose its will on
many tens of thousands of private organizations, wherever located on our small
planet.53
It is clearly the case, that FATCA seeks to impinge on the territorial integrity of other nations of

the world54. Despite, the expensive and expansive nature of complying with FATCA however,

about 375,895 entities all over the world and 108 entities in Nigeria has registered with the IRS as

51
Farrar, Jonathan & Thorne, Linda. (2012). The Effect of Outcome Favorability and Fairness on Tax
Compliance. SSRN Electronic Journal. 10.2139/ssrn.2194551. accessed on 28 January 2021.
52
Bean, Bruce W., ibid
53
Grinberg, Itai, Beyond FATCA: An Evolutionary Moment for the International Tax System (January 27,
2012). Available at SSRN: https://ssrn.com/abstract=1996752 or http://dx.doi.org/10.2139/ssrn.1996752 accessed on
28th January 2021.
It should be noted that, the US Supreme Court has repeatedly proclaimed that Congress legislates solely for the
territories of the United States, unless there is an express determination to the contrary. “[L]egislation
of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of
the U.S.” Foley Bros. v. Filardo, 336 U.S. 281, 285 (1949). This canon of construction has been
applied through much of our history. See, e.g., The Apollon, 22 U.S. 362, 370 (1824). The doctrine set
out in The Apollon has evolved a great deal since 1824, however, since Justice Story wrote: “The laws
of no nation can justly extend beyond its own territories except so far as regards its own citizens. They
can have no force to control the sovereignty or rights of any other nation within its own jurisdiction.” Id.
54
Cavelti, Luzius U., Automatic Information Exchange versus the Withholding Tax Regime Globalization
and Increasing Sovereignty Conflicts in International Taxation (June 1, 2013). World Tax Journal (IBFD), Vol. 5,
No. 2, pp. 172 (2013), Available at SSRN: https://ssrn.com/abstract=2362498. Accessed on 12 February 2021.

36
at 31st December 2020.55 The reason for this massive compliance is not far-fetched and has been

succinctly summarized:

The wrath of FATCA leaves FFIs with little or no room to “just say no” to the IRS.
While a select few small financial institutions may be able to escape FATCA, either
because the American accounts of the institution do not exceed $50,000 or by
refusing to maintain or open accounts for U.S. persons, this is the exception. Larger
and more prominent FFIs do not realistically have the same option, because of the
thirty-percent withholding penalty and the potential to be cut out of the largest
equity and bond markets in the world…56
In contrast, some stronger European banks such as Deutsche Bank, Commerzbank, HSBC, and

Credit Suisse have been closing brokerage accounts for all US customers since early 2011 citing

"onerous" US regulations, which FATCA made more complex when it went into effect in 2013.57

Under this consideration, Byrnes who has been very critical of FATCA aptly stated:

FATCA’s primary purpose was for the U.S. government to obtain otherwise private
financial information and exercise control of the global financial industry. Unlike
a conventional withholding tax which actually intends to collect tax, FATCA
imposes penalties based upon non-compliance with tax.
The tax revenue projections, which were used to validate the passage of FATCA
did not show FATCA raising any significant tax revenue annually. In fact, except
for the extraordinary penalties assessed, little additional tax has been collected. In
comparison to the annual on budget spending by the U.S. government, the actual
amount of tax collected by FATCA is statistically insignificant.58

55
Available at https://apps.irs.gov/app/fatcaFfiList/flu.jsf accessed on 28th January 2021.
56
Scratched by the FATCA, ECONOMIST (Nov. 24, 2011), available at
http://www.economist.com/node/21540270?fsrc=scn/tw/te/ar/scratchedbyfatca accessed on 28th January 2021.
57
European Banks Stop Serving American Customers". Der Spiegel. 14 December 2011. Available at
https://www.spiegel.de/international/business/reaction-to-us-tax-law-european-banks-stop-serving-american-
customers-a-803742.html. Accessed on 28 January 2021.
58
Byrnes, IV, William H., Background and Current Status of FATCA and CRS (Sept. 2017 edition)
(September 29, 2017). William Byrnes, Guide to FATCA and CRS Compliance, Lexis (Sept. 2017), Texas A&M
University School of Law Legal Studies Research Paper No. 17-75, Available at SSRN:
https://ssrn.com/abstract=3045459. Accessed on 12 February 2021.

37
 6. Differentiation by national origin and discrimination.

In each country of the world, those residents which are suspected to be U.S. citizens are separated

out at their financial institutions for differential treatment, based upon their place of birth and

nationality. Discrimination according to national origin is prohibited in most countries.

7. Effect on "accidental Americans".

The reporting requirements and penalties apply to all U.S. citizens, including accidental

Americans, those who are unaware that they have U.S. citizenship. Since the U.S. considers all

persons born in59 the U.S., and most foreign-born persons with American parents, to be citizens,

FATCA affects a large number of foreign residents, who are unaware that the U.S. considers them

citizens. Regardless of when they left the United States and regardless of their knowledge of our

unique basis for taxing, such “accidental” or “incidental” citizens are subject to the provisions of

the IRC.60 Though not the initial primary target of FATCA, the millions of Americans living

abroad are now faced with the decision on whether or not to remain citizens of the United States.61

8. Lack of reciprocity.

It has been argued that even in the presence of IGA, there still does not exist the same measure of

information exchange with the US as required from other countries. In fact, there would be need

59
Issues of Concern for U.S. Citizens Working Abroad, AMERICAN RESIDENTS WORKING
ABROAD GROUP (ARWAG) (Mar. 2014), available at https://americansabroad.org/
files/2813/6456/7161/final_arawg2.pdf accessed on 28 January 2021.
60
Ibid
61
Siri Srinivas, 'I was terrified we'd lose all our money': banks tell US customers
they won't work with Americans, GUARDIAN (Sept. 24, 2014), available at http://www.theguardian.com/
money/2014/sep/24/americans-chased-by-irs-give-up-citizenship-after-being-forced-out-of-bankaccounts accessed
on 28 January 2021.

38
for enactment of new laws by the American parliament if information exchange is to be at per62.

This many has argued is practically impossible in the US, at least at the moment. Although a

current decision of District Court, of Columbia Circuit in the case of Florida Bankers Association

and Texas Bankers Association, Appellants. v. United States Department of the Treasury63 has

suggested that, the US may be shifting towards are more liberalised information exchange system.

However, many commentators doubt the quality and quantity of information viz-a-viz FATCA

stipulation64. In that case, the Court has upheld the validity of Treasury regulations requiring U.S.

banks to report interest paid to account holders residing in 70 foreign countries. Pursuant to treaty

obligations, this information can then be shared with the revenue authorities in those countries.65

9. Conflict with Bank Secrecy Laws.

The essence of FATCA is information reporting of account details for accounts in which the IRS

has an interest. Reporting information includes the name of the U.S. person, the related Tax

Identification Number, the account number for each such account, the highest balance in such

accounts for the prior year, and the gross proceeds from such accounts. In many developed nations,

this information is protected as highly confidential including Nigeria66. In Switzerland, as much

of the movie-going public knows, releasing any portion of that information is a crime.67

62
Harvey, J. Richard, Offshore Accounts: FATCA Background, Developments, and Key Issues (March 24,
2014). Villanova Law/Public Policy Research Paper No. 2014-1006, Available at SSRN:
https://ssrn.com/abstract=2410846 or http://dx.doi.org/10.2139/ssrn.2410846. Accessed on 12 February 2021.
63
US District Court of Columbia, Civil Action n13. 529; Florida Bankers Ass’n v. U.S. Dep’t of Treasury, ___
F. Supp. 2d ___, 2014 WL 114519 (D.D.C. Jan. 13, 2014).
64
Op cit.
65
Steve Johnson, Florida Bankers Ass’n v. Treasury: Court Upholds Reporting Requirements Facilitating IRS
Information Sharing with Foreign Revenue Authorities. International Insight. Available at
https://jtlpblog.wordpress.com/2014/03/02/florida-bankers-assn-v-treasury-court-upholds-reporting-requirements-
facilitating-irs-information-sharing-with-foreign-revenue-authorities/#_ftnref21. Accessed on 16 February 2021.
66
Berta E. Hernandez, RIP to IRP - Money Laundering and Drug Trafficking Controls Score a Knockout
Victory over Bank Secrecy, 18 N.C. J. Int'l L. & Com. Reg. 235 (1992). Available at:
http://scholarship.law.unc.edu/ncilj/vol18/iss2/1, accessed on 28 January 2021.
67
Ibid,

39
It is has further be argued that, FATCA, would create a wide and resistive conflict with various

Bank Secrecy Laws of most sovereign states. However, in recent times, Foreign partner

jurisdictions are apparently agreeing to enter IGAs with the U.S. based on incentives such as

reduced burdens in applying FATCA regulations and a promise of reciprocal information

exchange by the IRS. It turns out the United States is not the only country plagued by tax evasion,

and the thought of discovering hidden accounts of their own citizens has nations the world over

bowing to FATCA.68

FATCA is a US-centric law that imposes expansive compliance obligations on FFIs, which

are subject to local-centric laws and oversight. FFIs are subject to regulatory oversight and laws

in their home country and in countries in which they conduct business through branches and

subsidiaries. Questions will arise whether an FFI will be violating local laws in taking such

actions, thereby exposing it to potential regulatory sanctions and potential lawsuits from account

holders or others. Further, if an FFI has branches in other countries, it may not be possible for these

branches to transmit account information to the home office based on constraints of local law in

the jurisdiction in which the branch is located. These local law constraints may conflict with the

implementation of FATCA unless rationalized.69

68
Nathan Newman, Explaining The Wormy Morass Of Obama’s FATCA Tax Evasion Law,
FORBES.COM (May 30, 2014). Available at http://www.forbes.com/sites/realspin/2014/05/30/explaining-the-
wormymorass-of-obamas-fatca-tax-evasion-law/ accessed on 28 January 2021.
69
Ibid.

40
2.3 Introduction of Foreign Account Tax Compliance Act in Nigeria

It cannot be over-emphasized that the legal system in Nigeria does not in most cases allow the

application of international instruments in Nigeria except they have been enacted as in Act of the

National Assembly70, this is simply referred to as the “domestication rule.” Treaties, conventions,

protocols or the regulations of international bodies of which Nigeria is a member or have ratified,

remains in abeyance until same is enacted into our local laws.

The locus classicus on the question of domestic application of international treaties in Nigeria is

the Supreme Court’s decision in Abacha v. Fawehinmi71 where the Supreme Court held, interalia,

…that the provisions of the African Charter on Human and People’s Right has become part
and parcel of the corpus of the Nigerian law as same has been re-enacted by the National
Assembly72.
In MHWUN V Minister of Health & Productivity & Ors73, the Court of Appeal held that the

provisions of an international labour convention cannot be invoked and applied by a Nigerian

Court until same has been re-enacted by an Act of the National Assembly. His lordship, Muntaka-

Coomassie JCA had this to say on domestic application of International Labour Convention in

Nigeria:

... There is no evidence before the court that the ILO Convention, even though signed by
the Nigerian Government, has been enacted into law by the National Assembly... In so far
as the ILO convention has not been enacted into law by the National Assembly, it has no
force of law in Nigeria and it cannot possibly apply....where, however, the treaty is enacted

70
Section 12(1) 1999 Constitution of Federal republic of Nigeria, Cap C 24, Laws of the Federation of
Nigeria, 2004 (as amended). Provides: No treaty between the Federation and any other country shall have the force
of law to the extent to which any such treaty has been enacted into law by the National Assembly.
(2) The National Assembly may make laws for the Federation or any part thereof with respect to matters not
included in the he Exclusive Legislative List for the purpose of implementing a treaty.
(3) A bill for an Act of the National Assembly passed pursuant to the provisions of subsection (2) of this section
shall not be presented to the President for assent, and shall not be enacted unless it is ratified by a majority of all the
House of Assembly in the Federation.
71
(2000) 4 SC, (2000) 6 NWLR (Pt. 660) 228
72
Supra, p 230
73
2005) 17 NWLR pt. 953 p. 120.

41
 into law by the National Assembly as was the case with the African Charter which is
incorporated into our municipal (i.e domestic) law by the African Charter on Human and
People’s Rights (Ratification and Enforcement Act, Cap. 10, Laws of the Federation of
Nigeria, 1990.... It becomes binding and our courts must give effect to it like all other laws
falling within the judicial powers of the Courts.74
Despite these legal restrictions, FACTA had found its way into Nigeria and currently being

implemented by virtually all commercial banks and other major non-banking financial institutions.

This would be broadly examined in the subsequent chapters.

74
Supra, at p.155 – 157

42
CHAPTER THREE

APPLICABILITY AND ENFORCEMENT OF FATCA IN NIGERIA

3.1 Applicability in Nigeria.

On January 22 201575, the Central Bank of Nigeria (CBN) issued a directive to Nigerian banks,

discount houses and other financial institutions to comply with the requirements of the US Foreign

Account Tax Compliance Act (FATCA). The law was introduced as part of the US Hiring

Incentives to Restore Employment Act 2010, to check offshore tax evasion by US subjects

(account holders).

The circular as reproduced stated;

The United States of America (US) enacted the Hiring Incentive to Restore Employment
(HIRE) Act, otherwise, referred to as Foreign Accounts Tax Compliance Act (FATCA),
on March 18, 2010, which took effect from July 1, 2014. The Act sought to broaden tax
coverage to foreign financial assets (FFA), including offshore accounts of US "persons".
The Act defines US "person" to include US tax payers or foreign businesses where a US
tax payer holds substantial ownership interest. The US IRS requires certain categories of
foreign financial institutions (FFIs), especially banks, to enter into agreement with it in
order to provide periodic information to US persons' accounts with them to the IRS.
For effective implementation of the Act, the US IRS has provided two possible options;
the option for individual financial institutions to register with the IRS through the latter's
portal for Compliance or FFIs provide the required information through an inter-
governmental agreement (IGA) option using the relevant agency. We are, by this circular,
advising76 banks, discount houses and other financial institutions that are yet to comply
with the FATCA to do so, and in complying with the requirement, to take cognizance of
banker-customer relationship with regards to the duty of care and confidentiality.77

75
Circular to all Banks, Discount Houses and other Financial Institutions on Compliance with the United
States of America’s Foreign Account Tax Compliance Act (FATCA), 2010. Central Bank of Nigeria Circular, with
reference FPR/DIR/GEN/CIR/04/004. Available at
https://www.cbn.gov.ng/out/2015/fprd/circular%20january%2027,%202015.pdf. Accessed on February 2 2021.
76
Emphasis mine.
77
Ibid,

43
The write wonders, while a Regulator, like the Central Bank of Nigeria, be dishing out advise, on

an issue of this nature, instead of issuing out directives.

Towards mitigating the harshness of the withholding penalty and easing the procedure of

compliance, the US has entered into intergovernmental agreements (IGAs) with various countries.

Nigeria has no IGA with the US, this thus mean that Nigerian financial institutions with US

accounts holders on their books are required to enter into FFI agreements and report directly to the

IRS.

As at December 31 2021, about 108 entities78 in Nigeria, have registered with the IRS.

Some commentators had argued that FPR/DIR/GEN/CIR/04/004, are incoherent, lacking in clarity

and direction.79 These commentators were further of the opinion that, the Nigerian government

together with relevant authorities may need to take active steps in negotiating an Inter-

governmental Agreement (preferably model 1 for reciprocity and a better uniform governmental

reporting framework) between FFIs in Nigeria and the U.S.80

3.2 Critique of the Application of FATCA in Nigeria.

It is worthy of note that compliance with FATCA entails total disclosure of a customer’s

information to a third party. The following critique has been made by respective authors81 on the

applicability of the Act in Nigeria, viz;

78
Available at https://apps.irs.gov/app/fatcaFfiList/flu.jsf accessed on 28th January 2021.
79
Babalola, Jide, Foreign Account Tax Compliance Act (FATCA) – A Nigerian Perspective. Available at
http://www.odujinrinadefulu.com/content/foreign-account-tax-compliance-act-fatca-%E2%80%93-nigerian-
perspective accessed on 4th February 2021.
80
Ibid,
81
Available at http://www.iflr.com/Article/3429737/Nigeria¬The¬importance¬of¬Fatca.html. Accessed
February 1 2021; Babalola, Jide, Ibid.

44
3.2.1. Banker – Customer Duty of Confidentiality82:

In Nigeria all banks and their staff are obliged to keep secret information regarding the business

and account of customers83. For the above reason every bank official is required to sign a

declaration of secrecy in respect of the bank’s business. This duty has been drawn from common

law of England84 and was well established and illustrated in the English case of Tournier v

National Provincial and Union Bank of England85, where the court held that it is an implied term

of contract between a banker and his customer that the banker will not divulge to third parties

either the state of the customer’s account or any of his transactions with the bank or any

information relating to the customer acquired through the keeping of his account. In this case, the

plaintiff’s account with the defendant has been continually overdrawn and he under took to pay

off the overdraft in instalments. When he failed to meet the schedule, the bank manager obtained

his personal address through his employees and in course of the bank manager’s discussion with

Plaintiff’s employer, the bank manager disclosed that the plaintiffs account was over drawn and

that transactions in the account indicated that the plaintiff was betting heavily and dealing with

bookmakers. As a result of this information, the plaintiff’s employer refused to renew the plaintiff

82
The Chartered Institute of Bankers of Nigeria (CIBN), while reiterating this duty, stated in Section 3.7(a) of
the General Standards Expected of Bankers & Banking Institutions, as contained in The Professional Code of Ethics
and Business Conduct, 2014; that a) Observe strict duty of confidentiality about their customers’ and former
customers’ affairs and shall not disclose details of customers’ accounts/transactions or their names and addresses to
any third party, including other companies in the same group, other than in the four exceptional cases as stated in
Section 1.2 above. Section 1.2 provides situation that may defeat the duty: a). Where a bank is compelled by a court
of competent jurisdiction or regulatory provision to do so; b). Where there is a duty to the public to disclose; c). Where
the interest of the bank requires disclosure; and d). Where disclosure is made at the request, or with the consent
(express or implied) of the customer.
This duty is placed on both the Bank as a corporate entity and every member of the Chartered Institute of Bankers).
Also see Central Bank of Nigeria, Consumer Protection and Education.
Available at https://www.cbn.gov.ng/Supervision/cpdconedu.asp. Accessed on 4th February 2021.
83
Adeniji, Kola. “The Banker-Customer Relationship: Perspectives On Nigerian Banking Law.” Malaya Law
Review, vol. 20, no. 2, 1978, pp. 344–361.
84
Oloyede, E. O. “The Bank Customer and Banking Law in Nigeria.” Journal of African Law, vol. 19, no. 1/2,
1975, pp. 66–72.
85
Tournier v National Provincial and Union Bank of England [1924] 1 K.B. 461, see also Parry-Jones v Law
Society [1969] 1 Ch. 1 and Banker Trust Co v Shapira [1980]1 W.L.R. 1274; [1980] 3 All E.R. 353

45
employment agreement. The plaintiff sued the bank inter for breach of duly not to disclose to third

party the state of his account or any transactions concerning his account. This contention was

upheld by the Court.

Enunciating the nature and extent of this duty, Lord Atkin LJ posited that,

….This duty clearly goes beyond the state of the account, that is, whether there us
a debit or a credit balance and the amount of balance. It extends to at least all the
transactions that go through the account and the securities, if any…. It must, I think
extend beyond the period when the account is closed or ceases to be an active
account….86
This position of the law has been adopted by plethora of Court’s decisions in Nigeria87.

The nature of a banker to a customer relationship is that of a fiduciary. The banker manages money

and all agreed banking transactions on behalf of the customer. The banker must exercise a standard

of care in such management activity imposed by law of contract. Fiduciary relationship is one

founded on trust or confidence by one person in the integrity and fidelity of another.88

This nature of the relationship between the banks and their customers was lately reiterated in the

case of United Bank for Africa Plc v. Wasiu89, where the court held that a bank in possession of a

customer’s money by a similar reasoning is in the position of a trustee or other fiduciary and

whenever there is a loss of such beneficial customer’s fund, such customer and the bank will be

entitled to trace such fund to wherever it is. It can thus not be undervalued that one of the functions

the bankers owe its customers is to maintain secrecy concerning the customer’s account and other

affairs.90 Banks thus must be careful not to divulge account details of their customers to a third

86
Supra, p485.
87
L.E. Nwosu v. Zenith Bank Plc (2015) 9 NWLR (PT.1464) 314 at pp.333-334; Habib (Nig.) Bank Plc v.
Koya (1992) 7 NWLR (PT.251) 43
88
United Bank for Africa Plc v. Eye-Gymineral Resources Ltd (2009) All FWLR (PT. 486) 1951.
89
(2017) 4 NWLR (Pt. 1555) 318 at 339 C-E
90
L.E. Nwosu v. Zenith Bank Plc (Supra)

46
party. The obvious rationale for this proposition is that disclosure of matters related to the financial

position of a customer may cause considerable harm to his credit and business.91

This duty is however subject to certain specified exceptions. These exceptions92 are:

Where disclosure is required by law:

In any proceeding before the court of law any of the parties may make an application to the Court

for the inspection of the Banker’s book. Where such order is granted, the Bank is under obligation

to disclose the books of the customer to the extent of the Court Order.

Also, Section 317 of CAMA empowers inspectors of companies during investigation to inspect all

books and documents relating to the company or in their custody or power. In the case of Corporate

Affairs Commission v. United Bank For Africa Plc And Others93 the Court of Appeal, upheld the

powers of the Corporate Affairs Commission to obtain Bank entries of Corporate account holders

without the need for a court order.

Abimbola Osarugue Obaseki-Adejumo. JCA, while delivering the lead judgment observed that;

I believe clearly that the essence of the specific and distinct provision of section 315(2)/317
of CAMA it to allow the Appellant Commission as the regulatory body set up pursuant to
section 7 of CAMA (through inspectors appointed) engage in what I deemed to be a "in
house cleaning" of the company records and also decide the line of action to take, most
especially in cases where there is deliberate and misleading information found as a result
of the investigation. To construe the provision otherwise will result in rendering the
commission as a toothless bulldog contrary to the intendment of the draftsman.

91
Orji, Uchenna. (2011). A Review of the Special Duties of Banks under the Nigerian Money Laundering
Act. Journal of International Banking Law and Regulation. Vol 26, pp 299-305.
92
Tournier v National Provincial and Union Bank of England (Supra). See also, Tade, Oludayo. “Policing
Looted Funds with the Whistle: Newspaper Coverage of the Anti-Corruption Crusade in Nigeria.” Africa Development /
Afrique Et Développement, vol. 44, no. 4, 2019, pp. 73–90.
93
(CA/L/443A/2014)[2016] NGCA 76 (30 March 2016) (CA/L/443A/2014) [2016] NGCA 76 (29 March
2016)

47
Also, the Nigerian Money Laundering (Prohibition) Act 2004, provides series of reporting

requirements for Bank customer’s transaction. It also empowers relevant Agencies of Government

to secure details and copies of vital documents and transactions of a customer’s account.94

It should also be mentioned that court orders, inform of garnishees, marevas, and such sundry

orders compelling such disclosures are covered under this premise.95

Where the bank has a duty to the public to do so:

The extent of this duty is uncertain and certainly seldom invoked. It could probably apply in war

times if the bank discovers that one of its customers is trading with the enemy.

Where the bank’s own interest requires disclosure:

This occur for example where legal proceedings are required to enforce the repayment of an

overdraft or where a surety must be told the extent to which his guarantee is being relied upon.

Where the bank has the express or implied consent of its customer to do so:

Where he supplies a reference to its customer or where it replies to a status inquiry from another

bank.

It should be noted that despite these laudable exceptions, under the common law, there is none

justifying malicious and reckless disclosure96. It has been further argued that, disclosure even with

respect to Security Agencies, must be proportionate to the objectives to be achieved. The

information between a bank and its customer is a privilege one, thus an unauthorized disclosure

94
Suberu, Rotimi T. “Strategies for Advancing Anticorruption Reform in Nigeria.” Daedalus, vol. 147, no. 3,
2018, pp. 184–201.
95
International Bank of West Africa Ltd v Kennedy Transport (Nig) Ltd (1993) 7 NWLR (Pt 304) 238
96
Schrems v. Data Protection Commissioner 6th October, 2015, Court of Justice of the European Union (Case
C-362/4)

48
would naturally give rise to action for libel and slander. If a bank therefore negligently, wilfully or

maliciously divulged information concerning its customer’s account to third parties, the bank

would naturally be made liable for breach of implied contractual promise.97

This is also the case in Nigeria, a Bank can not disclose the books of his customer to a third party

outside the dictates of the law in Nigeria.

The rule as set out above is in tandem with the provisions of Freedom of Information Act, 2011.

It would be worthwhile to reproduce the vital provisions of the Act.

Section 1(1) provides that:

1. (1) Notwithstanding anything contained in any other Act, law or regulation, the right of
any person to access or request information, whether or not contained in any written form,
which is in the custody or possession of any public official, agency or institution howsoever
described, is established.
(2) An applicant under this Act needs not demonstrate any specific interest in the
information being applied for.
(3) Any person entitled to the right to information under this Act, shall have the right to
institute proceedings in the Court to compel any public institution to comply with the
provisions of this Act.98
A public institution has been defined as:

means any legislative, executive, judicial, administrative or advisory body of the

government, including boards, bureau, committees or commissions of the State, and any
subsidiary body of those bodies including but not limited to committees and subcommittees
which are supported in whole or in part by public fund or which expends public fund and
private bodies providing public services, performing public functions or utilizing public
funds.99

97
First State Bank v. Parker , 28 S.W 2d 269 (Tex. Civ. App. 1930), Deal v. Bank of Smithville , 52 S.W
2d201(Mo.1932), Brex v. Smith , 104 N.J Eq.386, 146 A. 34 (1929), United States v. First National Bank , 67
F.Supp.616 (S.D Ala.1946)
98
Freedom of Information Act, 2011.
99
Section 2(7); 30, Freedom of Information Act, 2011. It has been held in the unreported case of Suit No.
FHC/L/CS/1154/14- Anamalechi Iteogu vs Union Bank of Nigeria Plc, delivered on 20th May 2016 by Justice, R. N.
Ofili-Ajumogobia, that the definition of public institution under the Freedom of Information Act, can be extended to
include all financial institutions in the Country.

49
In the case of Anamalechi Iteogu vs Union Bank of Nigeria Plc100, while applying the provisions

of Freedom of Information Act to banking institution has this to say;

A cursory look at the above reproduced provisions of FOI Act persuades me that it is not
only Government or Public Corporations that fall within the definition of Public institution.
It is my view that any public institution howsoever described which may include a private
body providing public services, performing public functions or utilizing public funds.
It is my view that a company, who provides services such as banking which is strictly
regulated by law, cannot be said not to provide public services. Such company registered
as a public company under the Companies and Allied Matters Act and operates as a banking
institution must definitely be categorized as a public institution.
I therefore hold that the Defendant, Union Bank of Nigeria Plc is a Public Institution within
the meaning of FOI Act, 2011 whose record can be accessed or required in accordance with
the provisions of the Act. 101
Despite this laudable provision of Freedom of Information Act, a public institution has been

required to refuse request regarding personal information. Section 14(1) (2) of the Act102 provides;

14. (1) Subject to subsection (2), a public institution must deny an application for
information that contains personal information and information exempted under this
subsection includes –
(a) files and personal information maintained with respect to clients, patients, residents,
students, or other individuals receiving social, medical, educational, vocation, financial,
supervisory or custodial care or services directly or indirectly from public institutions;
(2) A public institution shall disclose any information that contains personal information if
-
(a) the individual to whom it relates consents to the disclosure; or
(b) the information is publicly available
Information may however be disclosed with the private person’s consent or where same is publicly

available. Thus, for FATCA to operate in Nigeria, it would require manoeuvring through various

laws and regulatory policies affecting the privacy and confidentiality of banker -customer

relationships, and in commercial transactions, contractual duties of confidentiality are sacrosanct.

100
Supra
101
Supra, p6-7.
102
Freedom of Information At, 2011

50
This then follow that; a recalcitrant or non-consenting account holder may institute a lawsuit for

breach of confidentiality. A bank may however disclose on the mandate or with the concurrence

of the customer.

3.2.2 Applicability of Foreign Laws in Nigeria

It is not in doubt that it is only the Legislatures of Nigeria that can enact laws that binds within the

territory of the country. The only known foreign laws applicable in Nigeria are:

…the common law of England and the doctrines of equity and the statutes of general
application which were in force in England on 1st January 1900.103
The Courts have however held in series of cases, that, where a local law exist viz-a-viz a Statute

of General Application, the Nigerian law shall be giving effect to.104

This is even more so, as International laws and Conventions are taking not to be binding except

domesticated.

Section 12(1) of the 1999 Constitution of the Federal Republic of Nigeria (as Amended) provides

thus:

No treaty between the Federation and any other country shall have the force of law except
to the extent to which any such treaty has been enacted into law by the National
Assembly.105
The provision of this Section of the Constitution was vigorously considered by the Supreme Court

of Nigeria in the case of Abacha v Fawehinmi106. In that case, the Respondent at the Supreme

Court was Chief Gani Fawehinmi was arrested without warrant at his residence and detained for

several days without trial/charge by official of the State Security Service (SSS) and the Nigerian

103
S 45(1), Interpretation Act, CAP. I 23 Laws of the Federation of Nigeria, 2004
104
See the cases of Okoko vs The State (1967) NMLR 189; Alli vs Okulaja (1971) 1 (U.I.L.R) 72
105
See the case of Nigeria vs Ifegwu (2003) 5 S.C.N.J 217@ 249; (2003) 15 NWLR pt 842 113
106
Abacha v Fawehinmi [2000] 6 NWLR Part 660 p 228.

51
Police Force. Dissatisfied with the arrest and detention, he applied through his counsel, to the

Lagos Division of the Federal High Court, for the enforcement of his fundamental human rights.

Amongst the reliefs he sought in court was for the Court to declare that his arrest and detention

was illegal and contrary to the Articles 4, 5, 6 and 12 of the African Charter on Human and Peoples’

Rights (Ratification and Enforcement) Act (ACHPR Act). The Appellants (who were Defendants

at the Federal High Court and Respondents at the Court of Appeal), raised a preliminary objection

to the jurisdiction of the Court. In allowing the preliminary objection and striking out the

Appellant’s case, the Court decided that the Inspector General of Police had power to detain a

person by the provisions of the State Security (Detention of Persons) Decree No. 2 of 1984 as

amended by the State Security (Detention of Persons) (Amendment) Decree No. 11 of 1994. In

specific reference to the ACHPR Act, the Court decided that any of the provisions of the African

Charter on Human and peoples’ Rights which was inconsistent with the Constitution (Suspension

and Modification) Decree No. 107 of 1993 was void to the extent of its inconsistency. The Court

held in addition that, “the African Charter on Human and Peoples’ Rights has no legs to stand on

its own under the Nigerian law. It cannot be enforced as a distinct law. As such, it is subject to our

domestic law and ouster decree."107 The matter was taken to the Court of Appeal which partly

allowed the appeal and remitted the case to the Federal High Court for trial in respect of detention

of the Respondent on days that were not covered by any detention order. In arriving at this

conclusion, the Court of Appeal held that the learned trial judge was right in concluding that the

Inspector-General of Police was “empowered to issue a detention Order under the provisions of

Decree No. 2 of 1984 as amended and that he had no jurisdiction to entertain the matter in that by

virtue of the provisions of section 4 of Decree No. 2 of 1984 as amended and Decree No. 11 of

107
Abacha v Fawehinmi (Supra) p287.

52
1994, the jurisdiction of the court is ousted to entertain the appellant’s case."108 With specific

reference to the ACHPR Act, the Court of Appeal held that “it is a legislation with international

flavour and the ouster clauses contained in Decree No. 107 of 1993 or No. 11 of 1994 cannot affect

its operation in Nigeria.” It held further that the provision of the ACHPR Act “are provisions in a

class of their own. While the Decrees of the Federal Military Government may over-ride other

municipal laws, they cannot oust the jurisdiction of the court whenever properly called upon to do

so in relation to matters pertaining to human rights under the African Charter. They are protected

by the International law and the Federal Military Government is not legally permitted” to legislate

its way out of its international obligations.109

On appeal, the Supreme Court, among other things, considered the ACHPR Act in the light of

section 12 (1) of the 1979 Constitution of the Federal Republic of Nigeria and held among other

things that:

…..before its enactment into law by National Assembly, an international treaty (law0 has
no such force of law as to make its provisions justiciable in our courts….110
One can thus safely say that no foreign treaty in extension foreign laws can be binding in Nigeria

unless enacted/adopted/ratified by the National Assembly as a law in Nigeria. This meant thus,

that the FATCA being purely a foreign enactment cannot be operative in Nigeria. Any action done

under same is totally unlawful.

It may also be argued that Central Bank of Nigeria (CBN) having issued the circular authorizing

Banks to comply, the Banks are bound by same.

The question then is, does CBN has the power to mandate compliance to a foreign
enactment not domesticated in Nigeria?

108
Supra.
109
Supra, p 258
110
Abacha v Fawehinmi [2000] 6 NWLR Part 660

53
Although, CBN is statutorily empowered to regulate the activities of Banks and other financial

institution. It is worthy of mention that the CBN is a public body or authority created by the

National Assembly with general and specific powers under a statutory duty to carry out the

functions in accordance with the provisions of its enabling statutes and other related statutes. It is

fundamentally under a duty in carrying out these functions to adhere to the provisions of the 1999

constitution (as amended).

The powers of CBN to make regulations binding on Banks is derived from Central Bank of Nigeria

Act (as amended), 2007 and the Banks and other Financial Institutions Act (BOFIA)111.

Section 57(1) of the BOFIA112 gives the Governor of the Central Bank powers to make regulations

to give full effect regulating the objects and objectives of the Act. Section 57(2)113 gives the

Governor powers to make “rules and regulations for the operations and control of all institutions

under the supervision of the Bank.”

There is no provision in both BOFAI and the CBN Act, empowering CBN to authorize or mandate

Nigerian financial institutions to either obey or give effect to a foreign law. In fact, if such a right

exist in Nigeria, it is only within the competence of the National Assembly and that must be by

way of a formal enactment. As such it can be argued that, the CBN circular authorizing Banks to

comply with reporting under FATCA is unlawful, hence of no effect.

Despite, this lack of legal basis on the path of CBN, it has further been argued, that the directives

in its circular FPR/DIR/GEN/CIR/04/004, are incoherent, lacking in clarity and direction.

111
Cap B3, Laws of the Federation of Nigeria, 2004
112
Ibid
113
Ibid

54
This legal impediment has prompted some authors to strongly advocate for countries to execute

the Inter-Government Agreement114, and for Nigeria, specifically domesticating same, by a law of

the National Assembly.

3.2.3 Cost Implication on Nigerian Banks.

Implementation of FATCA may also lead financial institutions in Nigeria to incur additional

overhead costs in terms of the manpower, skill and technology required to effect compliance,

which may be passed on to the account holder.115

The difficult scenario was aptly captured by Deloitte thus,

Nigerian financial institutions are expected to comply with FATCA by either registering
with IRS or indicating to IRS that they do not maintain accounts for US nationals or
companies. They are also expected to modify their internal control systems and processes
in order to ensure compliance with the reporting requirements of FATCA. This additional
compliance cost imposed on FFIs has the potential of growing to unimaginable proportions
should the revenue agencies of other countries with substantial economic clout seek to
follow the example of the US IRS116.

3.2.4 National Security.

It is not in doubt that one of the key bases of any economy is its financial structure. The whole

essence of FATCA is disclosure, disclosure in this sense, not just any kind of information but

financial information. Financial secrets are valuable information that are guided by all sovereigns,

114
Phua, Stephen. “CONVERGENCE IN GLOBAL TAX COMPLIANCE.” Singapore Journal of Legal
Studies, 2015, pp. 77–104. JSTOR, www.jstor.org/stable/24872273. Accessed 5 Feb. 2021.
115
Banji Adenusi and Tolu Adetomiwa. Nigeria: The Importance of FATCA. Available at
https://www.iflr.com/article/b1lsqg79db3czr/nigeria-the-importance-of-fatca. Accessed on 5th February 2021. See
also Taiwo Oyedele, how to curb tax evasion the American way, FATCA implementation and
lessons for Nigeria. PWC, Tax Watch Publications. Available at https://www.pwc.com/ng/en/assets/pdf/tax-watch-
june-2014.pdf. Accessed on 5th February 2021.
116
Alleviating the Compliance Burden of US FATCA on Nigeria's Financial Services Industry
A Case for Government Intervention. A Publication of Deliotte.
Available at https://www2.deloitte.com/ng/en/pages/tax/articles/inside-tax-articles/alleviating-the-compliance-
burden-of-us-facta-on-Nigeria-financial-services-industry.html. Accessed on 5th February 2021.

55
most are usually referred as classified information. It has been observed that full compliance with

FATCA without more, may likely lead to disclosures of some guarded sovereign classified

financial information.

This was appositely captured by an article from the US Congress Office of Security Assessment

thus;

Sovereign nations assert legitimate reasons for and to monitor and control financial
information. The primary among this reason is the protection of the privacy of citizens,
industrial development and national security.117

3.3 Reactions of Nigerian Commercial Banks

As the author identified above, there is currently no clear-cut policy from the apex bank in Nigeria

on how the details set out by FATCA would be implemented. The banks in the country where thus

left in the wilderness of concern and indecision. Bearing in mind the huge disadvantage in non-

compliance and the mouth-watering benefit for compliance, banks in the country had devised

means of complying with FATCA without falling foul of local laws and contractual obligations.

Under this section, we would identify and evaluate these strategies adopted by some Nigerian

banks in their bid to comply with FATCA in the absence of a central coordination.

A search at the IRS data base indicates that as at 31st December 2020, about 109 entities listed in

(Appendix 1 of this work), has registered with the IRS118. 119

117
Gibbons, J. The Effect of Information Technology on Financial Services Systems. (Washington, D. C.: US.
Congress, Office of Technology Assessment, OTA-CIT-202 September, 1984)p 164. See also Bildt, H.E. Carl, et al.
Reinforcing Transatlantic Data Protection and Privacy. Atlantic Council, 2016, pp. 25–30, Building a Transatlantic
Digital Marketplace: Twenty Steps Toward 2020, www.jstor.org/stable/resrep03652.11. Accessed 5 Feb. 2021.
118
Available at https://apps.irs.gov/app/fatcaFfiList/flu.jsf. Accessed on 5th February 2021.
119
GIIN is an abbreviation of Global Intermediary Identification Number. The FATCA Registration System
approves foreign financial institutions (FFI), financial institution (FI) branches, direct reporting non-financial
foreign entities (NFFE), sponsoring entities, sponsored entities, and sponsored subsidiary branches. Institutions and

56
A practical review on the mode and means of compliance by Nigerian Banks would be attempted

below. The Banks are reviewed in alphabetical order.

3.3.1 Access Bank of Nigeria Plc120

The position in Access Bank of Nigeria Plc is one of blanket compliance. Every account identified

as FATCA related account is marked and required to complete a form as required by FATCA. For

individuals, the qualified citizen completes Form W-9 and for a corporate body, Form W-8 BEN-

E (W-8 BEN) is completed. These forms are such as ordinarily required by the FATCA. The forms

merely elicits vital information from the customer for the use of the IRS. This is the position for

both existing and newly opened accounts. It should be noted that, these identified accounts are

placed on hold until, the holders completes the requested forms. The Bank is also registered with

the IRS as required by FATCA.

3.3.2 CitiBank Nigeria Limited

Citibank Nigeria Limited has a very robust system in dealing with FATCA related accounts. As

for existing accounts affected by FATCA, the account holders were required to compete additional

authorization which would grant the Bank the right to make the necessary reporting to IRS. The

affected accounts were also mandated to fill the relevant forms. Account holders who failed to

entities assigned a GIIN can use it to identify themselves to withholding agents and tax administrators for FATCA
reporting purposes. The GIIN, formatted as XXXXXX.XXXXX.XX.XXX, is a 19-character identification number
made up of several identifiers. These characters will never contain the letter “O”. Available at
https://www.irs.gov/businesses/corporations/fatca-registration-and-ffi-list-giin-composition-information. Accessed
on 5th February 2021
120
Available at https://www.accessbankplc.com/index.php/resource-centre. Accessed on 5th February 2021.

57
give the necessary authorization where required to close the affected accounts within a specified

period else same would be placed on indefinite hold.

Dealing with prospective accounts are much easier in the Bank. This is because, the Account

Opening Form of the Bank made elaborate provisions for FATCA. The FATCA provision of the

Account Opening Form of the Bank permits the Bank to make necessary disclosures relating with

FATCA. Identified US citizens are also required to fill other forms which mandates the Bank to

make necessary disclosure to IRS.

3.3.3 Diamond Bank of Nigeria Plc (Now Access Bank of Nigeria Plc)121

In Diamond Bank Plc, the position is somewhat different from what goes on in other Access Bank

Plc especially as it relates to new accounts. For affected existing accounts, they are required to fill

and complete the relevant Form W-9 for individuals and Form W-8 BEN-E for corporate bodies.

For new accounts/customers, a totally different position plays out. The revised Account Opening

Form of the Bank made copious provisions for complying with FACTA. Clause 19122 of the Form,

clearly recognised the place of FATCA. The Form US citizens to consent to their details being

disclosed in accordance with FATCA.

121
Available at http://www.diamondbank.com/resources/download-centre/ . Accessed on 5th February 2021.
122
The provision of the clause is as follows;

CLAUSE 19
Diamond Bank Plc is in compliance with the provisions of the Foreign Account Tax Compliance Act (FATCA).
FATCA requires notification to the US Internal Revenue Service and other actions on certain transactions conducted
on accounts belonging to USA Nationals, Residents and persons with addresses in the USA. Account holder hereby
consents to the above.
Available http://www.diamondbank.com/download/Account-Opening-Form-Personal_2.PDF. Accessed on 5th
February 2021.

58
There is also a form known as FATCA Disclaimer Form123 which all prospective customers are

required to complete. This form requires prospective customers to declare if they are US citizens

or not.

The approach of Diamond Bank Plc certifies the quest of the Bank to comply with the FATCA in

the absence of a clear-cut regulatory guideline by the apex bank in the country and also protective

of the Bank from being unduly harassed with court suit by customer for breach of confidentiality

agreement. The disclaimer form is also an avenue to ensure that prospective customers who falls

under FATCA are not left out.

3.3.4 Eco Bank Nigeria Plc124

In Eco Bank Nigeria Plc, the position is the same as in Diamond Bank Plc. As it relates to affected

existing accounts, they are required to fill and complete the relevant Form W-9 for individuals

and Form W-8 BEN-E for corporate bodies.

123
FATCA DISCLAIMER
I _________________________________________, certify that I am NOT reportable under the Foreign
Account Tax Compliance Act (FATCA) and DO NOT meet any one of the indicia listed as follows:
A U.S. place of birth
A current U.S. residential address or U.S. mailing address which includes U.S post office box
address;
Designation of the account holder as a U.S. citizen or resident;
A current U.S telephone number;
Standing instruction to pay amounts from the account held by the individual to an account
maintained in the U.S.;
A current Power of Attorney or signatory authority granted to a person with a U.S. address;
An “in care of” address or a “hold mail” address that is the sole address we as the foreign
financial institution have identified for you as the account holder.
Signature:
Name:
Date:
Available at http://www.diamondbank.com/download/FATCA-DISCLAIMER.pdf. Accessed on 5 February 2021
124
Available at
https://www.ecobank.com/upload/publication/20160812011136909GAUNAWFV76/20160812011127580D.pdf.
Accessed on 5 February 2021

59
For prospective customers, Eco Bank adopts the same style as Diamond Bank. The revised

Application to Open Account Form of the Bank made copious provisions for complying with

FACTA.

Clause E125 of the Form, clearly recognised the place of FACTA. The Form requires intending

applicants to declare their citizenship status and where US citizens, they are made to execute right

to confidentiality waiver clause. This is actually a very laudable step by the Bank as it exculpates

the Bank from liability on the duty of confidentiality owed the customer.

Just like Diamond Bank, the approach of Eco Bank Plc certifies the quest of the Bank to comply

with the FATCA in the absence of a clear-cut regulatory guideline by the apex bank in the country

and also protective of the Bank from being unduly harassed with court suit by customer for breach

of confidentiality agreement.

125
The provision of the clause is as follows;
CLAUSE E

FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

DO YOU HOLD A DUAL CITIZENSHIP YES/ NO
IF YES PLEASE CONFIRM THE COUNTRY
OF YOUR DUAL CITIZENSHIP:
DO YOU HOLD A UNITED STATES OF AMERICA (U.S.A) PASSPORT/CITIZENSHIP? YES/ NO
IF YES DO YOU WANT YOUR DETAILS REPORTED TO THE I.R.S? YES/ NO
PASSPORT Nº : SSN:
TAX IDENTIFICATION Nº:
FATCA WAIVER REQUIRED IF YOU ARE A US CITIZEN:
I hereby irrevocably and unconditionally DISCHARGE AND RELEASE Ecobank Nigeria (“the Bank”), from any
duty or obligation of confidentiality owed to me in respect of the account(s) held with the Bank and I do also
irrevocably and unconditionally DISCHARGE AND RELEASE the Bank from all and any claims, demands,
liabilities, interest, damages, expenses, costs and penalties, present or in future in respect of any actions or
liability whatsoever arising from the disclosure of information by the Bank to the US Internal Revenue Services (IRS)
or other governmental authority of the United States of America.

SIGNATURE:

60
3.3.5 Fidelity Bank Plc126

Fidelity Bank Plc adopts the same method as Access Bank of Nig Plc. Every account identified as

FATCA related account is marked and required to complete a form as required by FATCA. For

individuals, the qualified citizen completes Form W-9 and for a corporate body, Form W-8 BEN-

E (W-8 BEN) is completed. These forms are such as ordinarily required by the FATCA. The forms

merely elicit vital information from the customer for the use of the IRS. This is the position for

both existing and newly opened accounts. It should be noted that, these identified accounts are

placed on hold until, the holders complete the requested forms. Curiously, Clause 17127 of Fidelity

Account Opening Form subjects all account related relationship solely on Nigeria laws. One

wonders the effect this would have on FATCA designated transactions.

3.3.6 First Bank of Nigeria Limited128

As with all other Banks in Nigeria, First Bank of Nigeria Ltd had categorically stated that it is fully

FATCA compliant. The Bank had noted that, effective from 1st July, 2014 it would require

additional information from prospective customers to determine if they are US citizens. The Bank

also, stated that had reviewed all its existing accounts to determine accounts which fall within

FATCA and report same accordingly. The Bank is registered with IRS with Global Intermediary

Identification Number (GIIN) as F8DB0C.00010.ME.566.

First Bank adopts the same procedure that obtains in Access Bank of Nigeria Plc. However, the

Confidentiality Clause in the Account Opening form of the Bank, gives the Bank or any its

126
Available at https://www.fidelitybank.ng/wp-content/uploads/2015/08/Diaspora-account-opening-form.pdf.
Accessed on 5th February 2021
127
Agree that the account relationship hereby established shall be governed and construed in accordance with
Nigerian law and by reference to the accepted principles and practices of banking.
128
Available at https://www.firstbanknigeria.com/foreign-account-tax-compliance/. Accessed on 5 February
2021

61
subsidiary or member, to disclose or share any information relating to the customer’s account, the

customer or transaction or any related matter to any entity or person, whether local or foreign 129.

This clause tends to lift the burden of confidentiality from the Bank.

3.3.7 First City Monument Bank Ltd (FCMB Ltd)130

FCMB Ltd adopts the same method as Access Bank of Nigeria Plc. It complies strictly without

any form of complimentary agreement with a FATCA affected customer.

3.3.8 Guaranty Trust Bank Plc (GT Bank Plc)

GT Bank Plc, adopts the same system as Access Bank of Nigeria Plc. It is registered with IRS and

strictly complies with FATCA. Like Access Bank, the Bank has no special agreement with

customers whether existing or prospective, authorizing it to report FATCA affected transactions

or accounts to IRS. However, the Bank may find some respite in Clause 8131 of its Account Opening

Documentation (Corporate) and Clause 16 of Account Opening Documentation (Personal). The

clauses which are similar in context provide that;

Subject to the provisions of all laws, rules and/or regulations, the customer hereby agrees
that the Bank or any of its subsidiaries and/or affiliates can share information related to
their account (s) with any domestic or overseas regulators or tax authorities where
necessary to establish their tax liability in any jurisdiction. Where required by any domestic
or overseas regulators or tax authorities, the customer agrees that the Bank may withhold
and pay out from their account (s) such amounts as may be required according to applicable
laws, rules and regulations.

129
Clause 16, Account Opening Form, First Bank of Nigeria Limited. Available at
https://www.firstbanknigeria.com/assets/PDFs/Forms/Individual-Account-Opening.pdf. Accessed on 5 February
2021
130
Available at https://onlineaccount.fcmb.com/current1.php#. Accessed on 5 February 2021.
131
Available at http://gtbank.com/images/documents/business/Entities_CorporateAcct.pdf. Accessed on 5th
February 2021.

62
It can safely be argued that, this clause protects the Bank from any adverse claims that may arise

from compliance with the FATCA requirements.

3.3.9 Heritage Bank Limited132

3.3.10 Keystone Bank Ltd

The compliance procedure adopted in Keystone Bank Ltd is similar with that obtainable in Access

Bank of Nigeria Plc.

3.3.11 Skye Bank Plc.

Skye Bank Plc observes the same procedure as Access Bank Plc. Just like Fidelity and some other

Banks however, all account related transactions are subject solely to Nigerian laws 133. This

definitely poses a conflict of law risk as FATCA is not a Nigerian law.

3.3.12 Stanbic Ibtc Bank Plc134.

Stanbic Ibtc Bank Plc has one of the most elaborate provisions on FATCA compliance. Existing

accounts are subjected to the same procedure by other Banks. There is however detailed

contractual obligation and requirements for prospective customers while dealing with FATCA.

Even though, the Bank is partly an International Bank, the Bank understood the need to protect

itself while complying with a foreign requirement. The Banks’s Account Opening Form dedicated

a whole section to the provisions of and compliance with FATCA.

132
Heritage Bank Limited runs the same system as Access Bank Plc.
133
The Account Holder and the Bank agree that the operation of the account(s) is subject to laws and regulations
at anytime existing in the Federal Republic of Nigeria, and to be bound by the terms and conditions herein.
Clause 12 (26) of Skye Bank Account Opening Form.
Available at https://www.skyebankng.com/images/downloads/SkyeBankAccountOpeningForm-Individual.pdf.
Accessed on 5th February 2021.
134
Available at http://www.stanbicibtcbank.com/Nigeria/AboutUs/News/Stanbic-IBTC-Bank-Complies-With-
The-Foreign-Account-Tax-Compliance-Act-(FATCA). Accessed on 5 February 2021.

63
It would be worthwhile to state of the provisions on FATCA of the Account Opening forms;

I/We understand that as part of your obligations in regard to US Foreign Account Tax
Compliance Act (FATCA), financial institutions and banks, including the Bank are
required to obtain my/our tax related information to determine whether my/our account is
a US Account, account held by a recalcitrant account holder, or non-participating financial
institution or bank.
I/We provide the Bank my/our consent to:
a) obtain from me/us such tax related information as is necessary and in the format
determined by the Bank to determine whether I/we fall within any of the above categories
in which case my/our demographic transactional data (as determined from time to time by
the US IRS, we be reportable by the Bank to the US IRS….135
These provisions are elaborate enough not only to protect the Bank, but also to intimate the

customer of the requirement of FATCA.

In addition to this copious provisions, prospective FATCA affected customers are required to

complete Form W-9 for individual and for a corporate body, Form W-8 BEN-E (W-8 BEN).

3.3.13 Standard Chartered Bank Limited

Clause 11, of the Standard Terms of Account Opening Form136 of the Bank provides that,

We will keep information provided by you or relating to you confidential except that We
may disclose such information to:
(a) any Bank Member;
(b) any Bank Member’s service provider or professional advisor who is under a duty of
confidentiality to the discloser;
(c) any actual or potential participant, sub-participant or transferee of Our rights or
obligations under any Transaction between the Parties (or any of its agents or professional
advisors);
(d) any rating agency, insurer or insurance broker, or direct or indirect provider of credit
protection;
(e) as required by law or any Authority.

135
Sourced from the Account Opening Form of Stanbic-Ibtc Bank Plc. Obtained and accessed on 5 February 2021.
136
Available at https://www.sc.com/global/av/ng-account-terms-standard-terms-and-supplement.pdf. Accessed
on 5 February 2021.

64
The above stated clause tends to drive a picture of a Bank which is generally confidential on

information relating to activities of its customers. This clause is not only a mission statement but

a binding agreement between the Bank and its customers.

Further to this Clause is the provisions of Clause 18137. This Clause restricts accounts held to the

governing laws of the service location. This basically meant that, any account opened in Nigeria

would be governed by Nigerian laws.

The biting question is, despite the provision of these clauses imbedded into the account opening

documents of Standard Chartered Bank Ltd, is the Bank FATCA complaint. It should be recalled

that, the whole essence of FATCA is to disclose the daily financial dealings of US citizens residing

in foreign countries.

Having considered the position of Standard Chartered Bank Ltd as it relates to customer

confidentiality, we would review the extent of the Bank’s compliance with FATCA.

3.3.14 Sterling Bank Plc

In Sterling Bank Plc, just as is the case in Eco Bank Nigeria Plc, the Banks Account Opening

Forms makes very elaborate provisions for implementation of FATCA. The Account Opening

Forms has a separate and specialized provision on FATCA related accounts. It makes provision

for questionnaires which seeks to elicit vital information on the citizenship and other personal

137
The Clause provides that,

The contractual relationship between the Parties relating to: (a) opening and operation of Accounts, is
governed by the laws of the Service Location in which an Account is maintained; (b) Services (other than
Services relating to the opening and operation of Accounts) provided to a Client Group Member in one
Service Location, is governed by the laws of that Service Location.

65
information on a FATCA related account. In addition to this data sourcing clauses, it also has well

worded provision authorizing the Bank to make necessary FATCA related disclosures.138

The Bank’s Account Opening Form also has a ‘false declaration indemnity clause’139. This Clause

tends to make an account holder liable to indemnify the Bank for any false or wrong information

provided. This thus protects the Bank should a FATCA related account is not declared, wrongly

declared or falsely declared.

In addition to the provisions of the Account Opening Forms, prospective and existing customers

who are US citizens are required to fill Form W-9 for individuals and for a corporate body, Form

W-8 BEN-E (W-8 BEN).

3.3.15 United Bank for Africa plc

FATCA in United Bank for Africa Plc, is treated exactly same way as in Guaranty Trust Bank Plc.

The contents of the Banks Account Opening Form are almost similar in nature. The Account

Opening Form of the Bank like Guaranty Trust Bank Plc gives it the right to share information

with both domestic or overseas regulators and tax authorities140. Prospective customers are also

required to intimate the Bank of any change in citizenship, especially when they become a US

138
Clause 10 (4-6) of the Account Opening Form, provides that;
I/We authorize Sterling Bank Plc to disclose relevant account and/or personal information to the US tax authorities
for the purpose of Sterling Bank Plc complying with its obligations under the US Foreign Account Tax Compliance
Act (”FATCA”).
I/We will undertake to fully cooperate with Sterling Bank Plc to ensure it meets its obligations under FATCA in
connection with my/our account.
I/We will indemnify and hold harmless Sterling Bank Plc from any loss, action, cost, expense (including, but not
limited to sums paid in settlement of claims, reasonable attorneys’ and
consultant fees, and expert fees), claim, damages, or liability which arises or is incurred by Sterling Bank Plc in
discharging its obligations under FATCA and/or as a result of disclosures to the US tax authorities. Sourced from
https://sterlingbankng.com/assets/usercontents/forms/Acc_Individual.pdf. Accessed on April 21, 2017.
139
Ibid, Clause 10 (2)
140
Clause 27- 30 of Account Opening Form of United Bank for Africa.

66
citizen. These clauses give the Bank unfettered right to disclose not only the details of US citizens

but that of all account holders that signed its current Account Opening Form.

3.3.16 Union Bank of Nigeria Plc

The position in Union Bank of Nigeria Plc is one of blanket compliance. Every account identified

as FATCA related account is marked and required to complete a form as required by FATCA. For

individuals, the qualified citizen completes Form W-9141 and for a corporate body, Form W-8

BEN-E (W-8 BEN)142 is completed. These forms are such as ordinarily required by the FATCA.

The forms merely elicit vital information from the customer for the use of the IRS. This is the

position for both existing and newly opened accounts. It should be noted that, these identified

accounts are placed on hold until, the holders complete the requested forms. The Bank is also

registered with the IRS as required by FATCA.

3.3.19 Wema Bank Plc

Wema Bank Plc observes the same procedure as Access Bank Plc and Union Bank. Also, like

Fidelity and some other Banks, all account related transactions are subject solely to Nigerian

laws143. This poses a conflict of law risk as FATCA is not a Nigerian law.

141
This Form was reviewed in December 2014 by the Department of the Treasury Internal Revenue Service
142
The Form W-8BEN-E reflects changes made by the Foreign Account Tax Compliance Act (FATCA) and is for
use by beneficial owners that are entities. Entities also may use the Form W-8BEN (revision date February 2006)
through December 31, 2014.
143
Clause 7 of Fixed Call/Deposit Terms and Conditions of the Account Opening Form for Unity Bank Plc, provides;
This Agreement shall be governed by the laws of the Federal Republic of Nigeria. This Agreement shall not
be amended, modified, released, discharged, abandoned or otherwise terminated prior to expiration, in whole
or in part, except by written agreement signed by the parties hereto.
Sourced from http://www.wemabank.com/media/109702/wb-individual-account-opening-form-web-version-.pdf.
Accessed on April 23, 2017.

67
3.3.19 Zenith Bank Plc

Zenith Bank Plc observes the same procedure as Access Bank Plc and Union Bank.

In summary, as it relates to compliance with FATCA Nigerian commercial banks can be grouped

as stated in Figure 3.1;

Mode of Compliance with FATCA by Nigerian Commercial Banks

S/N BLANKET/ABSOLUTE CONTRACTUAL NON

COMPLIANCE (A) COMPLIANCE (B) COMPLIANT
BANKS (C)
1 Access Bank of Nigeria Plc CitiBank Nigeria Limited

2 Fidelity Bank Plc Diamond Bank of

Nigeria Plc

3 First City Monument Bank Ltd Eco Bank Nigeria Plc

4 Heritage Bank Limited First Bank of Nigeria

Limited

5 Keystone Bank Ltd Guaranty Trust Bank Plc

6 Skye Bank Plc Stanbic Ibtc Bank Plc

7 Union Bank of Nigeria Plc Standard Chartered Bank

Ltd.

8 Unity Bank Plc Sterling Bank Plc

9 Wema Bank Plc United Bank for Africa

plc

10 Zenith Bank Plc

Figure 3.1

68
3.4 Critique of the Positions Adopted by Nigerian Banks.

In this section, the author attempts a critique of the various procedures adopted by Nigerian

Commercial Banks in their bid to comply with the requirements of FATCA.

The critique would be made in three specific segments, that is;

• Banks with Blanket (Absolute Compliance)

• Banks with contractual right to comply.

• Non-Complaint Banks.

3.4.1 Banks with Blanket Compliance (Banks Complying fully without further

Agreement or Consent of the Account Holder).

These sets of commercially banks144, comply absolutely with the requirement of FATCA. That is,

the Banks ensures all the reporting requirements of FATCA are met without any formal agreement

or concurrence with the account holder. Existing accounts discovered to be FATCA affected

accounts are placed on hold and the holder of the account is required to complete the relevant

documentation forms before the hold is lifted. For prospective accounts, once same have been

identified as FATCA subjected, the account holder is required to fill the relevant forms. The

account is declared inchoate until the holder completes and returns the forms.

Salient issues requiring clarification are;

• How are FATCA subjected/related account identified?

144
Figure 3.1 (A)

69
 • What is the legal effect of unilateral disclosure of account details under FATCA by

commercial Bank?

One the first issue, in the account opening documentation of all commercial banks in Nigeria,

prospective customers are usually required to disclose their nationality. Once a FATCA related

account is identified, they are isolated and treated accordingly. This forms part of the condition

embedded in the form. As a cushion to this requirement, a clause which warrants the veracity of

information provided in the account opening forms is inserted. This clause tends to compel

prospective customers to make accurate disclosure of all information sought.

It is the position of the author that this method adopted by some commercial Bank leaves them

vulnerable to law suit. This is the position especially with existing accounts are placed on hold.

There is nothing in all the reviewed account opening forms of commercial Banks that authorizes

such unilateral action.

Furthermore, it was also observed that, transactions under the account opening documents are

subject to Nigerian laws and regulations. FATCA is not a Nigerian law.

On the legal effect of unilateral disclosure of customers details. As has been identified by the

author and a well-established banking principle, confidentiality of customers account information

is basic.

All relevant account opening forms reviewed within this group indicates that, a customer’s details

would only be made available to a third party with the consent of the account holder or as required

by law. The relevant FATCA forms usually issued to affected account holders are strictly data

collation forms. Nothing in the forms as sighted can be construed as express authorization by the

account holder to disclose the details of his account to a third party without consent.

70
Finally, it can be safely argued that, FATCA cannot safely be accommodated in the laws which

can compel disclosure of an account holders account information in Nigeria. The reason has earlier

been identified. Foreign laws are not applicable in Nigeria. This is a general norm of sovereignty

of nations.

3.4.2 Banks with contractual right to comply.

These sets of Banks had considered the best way in complying with the FATCA requirements,

especially with prospective customers, without falling foul of the law. They must have been

advised on the consequences of breaching the duty of secrecy due to the provisions of a law which

is not binding in Nigeria. As parties to a contract have the right to determine the terms of the

contract if same does not breach the content of enabling laws 145. Other major exceptions to this

rule are that parties cannot contract to commit a crime or to perpetuate an illegal act, such as fraud,

duress and misrepresentation.146 As put by Brian A. Blum:

The power to enter contracts and to formulate the terms of the contractual
relationship is regarded in our legal system as an exercise of individual autonomy – an
integral part of personal liberty. 147
It, therefore, follows that once parties have entered into an agreement, which said agreement has

been reduced into writing, the said contract forms a ‘’matrimonial’’ union between the parties with

regard to the terms stated therein. Such contract is regarded as sacrosanct and the only jurisdiction

145
Printing and Numerical Registering Co v Sampson (1875) 19 Eq 462; see also Glynn v. Margetson & Co.
[1893] A.C. 351 ; London and North Western Railway Co. v. Neilson [1922] 2 A.C. 263; Unilife Development
Company Ltd vs. Adeshigbin (2001) 2 SC 43;
146
A.C.B Ltd vs. Alao (1994) 7 NWLR (Pt. 358) 614; JFS Investment Ltd vs. Brawal Line Ltd & 2 Ors (2010)
12 S.C (Pt. 1) 110.
147
Blum A. Brian, Contracts: Examples and Explanations (4th Ed) (New York: Aspen Publishers, 2006) p.8.

71
which courts can exercise over same is their interpretative jurisdiction (as courts cannot make

contracts for parties)148.

These set of Banks149 must have explored this contractual opportunity to protect themselves of any

form of contest in future by affected customers of the Bank.

Although the clauses giving the right to disclose customer’s information to third parties whether

local or abroad are differently worded in the account forms of these Banks. The clauses one way

nor the other provided a measure of cover from possible suit by customers. Theirs is a better

position as compared to the banks with blanket compliance without any form of concurrence by

the customer.

It would be right to re-emphasize that the various forms completed by US citizens as identified in

this segment, are basically information collation forms and do not form a direct consent of the

customer for the disclosure of his financial details outside the provision of local laws.

3.4.3 Non-Compliant Commercial Banks.

There is currently no Commercial Bank in Nigeria that is non FATCA compliant. The obvious

sanction is enough to compel all commercial Banks to comply.

148
Alade vs. ALIC (Nig) Ltd & Anor. (2010) 12 S.C (Pt. II) 59 at 95; Ekiadolor vs Osayande (2010) 6 NWLR
(Pt. 1191) 423, CA.
149
Listed in Figure 3.1 (B)

72
CHAPTER FOUR

APPLICATION OF FATCA IN SELECTED JURISDICTION

4.1 Canada

The United States and Canada share the longest international border in the world and their bilateral

relationship is one of the closest and most extensive in the world. It is reflected in the high volume

of bilateral trade—more than $1.8 billion a day in goods and services—and in people-to-people

contact. About 380,000 people cross between the countries every day by all modes of transport. In

fields ranging from security and law enforcement to environmental protection to free trade, the

two countries work closely together on multiple levels, from federal to local.150

U.S. defence arrangements with Canada are more extensive than with any other country. The

Permanent Joint Board on Defence provides policy-level consultation on bilateral defence matters.

The United States and Canada share North Atlantic Treaty Organization (NATO) mutual security

commitments, and U.S. and Canadian military forces cooperate on continental defence within the

framework of the binational North American Aerospace Defence Command (NORAD).151

Considering the extent of financial and economic corporation existing between US and Canada

one would easily agree with the fact that FATCA would be readily embraced in Canada.

On February 5, 2014152, the Canadian government announced that it had entered into an

intergovernmental agreement with the U.S. government under the existing Canada-U.S. Tax

150
Available at https://www.state.gov/r/pa/ei/bgn/2089.htm. Accessed on 15 February 2021.
151
Ibid
152
Theophilos Argitis and Doug Alexander, Canada Signs FATCA Tax Pact With U.S. Bloomberg. Available
at https://www.bloomberg.com/news/articles/2014-02-05/canada-signs-fatca-tax-pact-with-u-s-. Accessed on 15
February 2021.

73
Convention. The requirements of the IGA are reflected in the Income Tax Act so financial

institutions in Canada do not have to follow FATCA requirements.153

Under the IGA, financial institutions in Canada now report relevant information on accounts of

U.S. persons to the Canada Revenue Agency (CRA) rather than directly to the IRS 154. The CRA

will then exchange the information with the IRS through the provisions in the existing Canada-

U.S. Tax Convention. The 30 per cent FATCA withholding tax no longer applies to retail clients

of Canadian financial institutions. The CRA has issued detailed technical guidance for financial

institutions to follow to help them meet their reporting obligations under the IGA. Under these

requirements, customers of Canadian financial institutions may be asked to certify or clarify their

U.S. tax status.155

In accordance with the IGA requirements, financial institutions in Canada began applying their

due diligence procedures starting July 1, 2014. Information reporting by financial institutions to

the CRA and the exchange of information began on July 1, 2015.

The IGA requirements are part of Canadian tax law and all financial institutions, including banks,

credit unions, brokerage firms, insurance companies and mutual fund companies, have to abide by

these Canadian laws. Some categories of financial institutions have reduced requirements, such as

small deposit-taking institutions and those that only serve local clients or only issue credit cards.

153
Foreign Account Tax Compliance Act (FATCA) in Canada, Scotia Bank Publications. Available at
https://www.scotiabank.com/ca/en/about/inside-scotiabank/foreign-account-tax-compliance-act.html . Accessed on
15 February 2021.
154
Reporting and sharing of financial account information with the United States. Available at
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/enhanced-financial-account-
information-reporting/reporting-sharing-financial-account-information-united-states.html. Accessed on 15 February
2021.
155
Ibid.

74
Very small deposit-taking institutions with assets of less than $175 million are exempt from

reporting.

It has been reported that further to the IGA between Canada and the US, initial compliance has

cost Canada's five biggest banks a combined sum of about 750 million Canadian dollars ($687

million)156. Also, amid the crackdown, record numbers of Americans have renounced their

citizenship. 157

Certain, Canadian commentators nevertheless resourcefully argued in favour of the IGA. In

addition to having a more harmonized system and enhanced data sharing mechanism among the

countries, it also lifted a great deal of compliance burden on Canadian Banks.158

The validity of this IGA between Canada and the US, came under scrutiny sometime in 2014159,

when the duo of Virginia Hillis, a retired lawyer and Gwendolyn Louise Deegan, filed a suit against

the Canadian Government160161. The two American-Canadian dual citizens (women) in their suit

claimed (among other things) that; the intergovernmental U.S.-Canadian agreement that

implements FATCA violates the Canadian Charter of Rights and Freedoms, particularly the

156
Rita Trichur. Canada Banks Tally Their Tax-Compliance Tab. The Wall Street Journal. Available at
https://www.wsj.com/articles/expats-in-canada-sue-over-u-s-effort-to-collect-taxes-abroad-1407856738. Accessed
on 16 February 2021.
157
Liam Pleven et al. Record Numbers Living Abroad Renounce U.S. Citizenship over IRS Reporting
Requirements. The Wall Street Journal. Available at https://www.wsj.com/articles/more-expatriate-americans-break-
up-with-uncle-sam-to-escape-tax-rules-1402972439. Accessed on 16 February 2021.
158
James Fitz-Morris, FATCA tax deal with U.S. takes some heat off Canadian banks, CBC News
Publications. Available at https://www.cbc.ca/news/politics/fatca-deal-takes-some-heat-off-canadtreaian-banks-
1.2524444. Accessed on 15 February 2021.
159
Virginia Hillis and Gwendolyn Louise Deegan v. the Attorney General of Canada and the Minister of
National Revenue
160
Patrick Cain, Dual citizens sue feds over FATCA tax deal with U.S. Global news. Available at
https://globalnews.ca/news/1504452/dual-citizens-sue-feds-over-fatca-deal-letting-banks-pass-info-to-irs/. Accessed
on 16 February 2021.
161
Ryan Remiorz, Group plans constitutional challenge to budget bill. The Globe and Mail. Toronto.
Available at https://www.theglobeandmail.com/news/politics/group-plans-constitutional-challenge-to-budget-
bill/article19399762/. Accessed on 16 February 2021.

75
provisions related to discrimination based on citizenship or national origin. Both Ontario women

were born in the United States but have lived in Canada since age five, never worked in the U.S.

and never filed U.S. tax returns. The lawsuit seeks to overturn that deal (IGA), arguing that it

violates section 15 of the Charter, which prohibits discrimination, and sections 7 and 8, which

protect “life, liberty and security of the person” and forbid “unreasonable search or seizure”.162

In addition to claiming the tax agreement violates the Charter, the suit also argues Parliament went

beyond its jurisdiction in imposing the FATCA reporting structure on credit unions, which are

provincially regulated.163

The suit was prepared by a group called the Alliance for the Defence of Canadian Sovereignty

(ADCS).

In 2015, the Federal Court of Canada dismissed the suit, upholding the intergovernmental

agreement.164 Rejecting the plaintiffs’ arguments, the Federal Court concluded "that the collection

and automatic disclosure of account holder information about US reportable accounts

contemplated the IGA is legally authorized in Canada by the provisions of the IGA Implementation

Act."165 Moreover, it found that the collection and automatic disclosure of any such information is

not inconsistent with the provisions of the Canada-US DTA.166

163
Rita Trichur. U.S. Expats Sue Over Canadian Deal to Tell Washington About Their Accounts. The Wall
Street Journal. Available at https://www.wsj.com/articles/expats-in-canada-sue-over-u-s-effort-to-collect-taxes-
abroad-1407856738. Accessed on 16 February 2021.
164
Canadian Court Denies FATCA Challenge – Door Open For Appeal. Pearse Trust. Available at
https://www.pearse-trust.ie/blog/canadian-court-denies-fatca-challenge-door-open-for-appeal. Accessed on 16
February 2021.
165
Federal Court dismisses FATCA charter challenge. The Canadian Press. Available at
https://www.advisor.ca/tax/tax-news/federal-court-dismisses-fatca-charter-challenge/. Accessed on 16 February
2021.
166
Canadian Court Dismisses FATCA Lawsuit. Sovos. Available at
https://sovos.com/blog/2015/10/03/canadian-court-dismisses-fatca-lawsuit/. Accessed on 16 February 2021.

76
The Court however observed that, its decisions were "without prejudice to the plaintiffs' right to

pursue their claim that the impugned provisions are ultra vires or inoperative because they are

unconstitutional or otherwise unjustifiably infringe Charter rights,"167 The plaintiffs had appealed

the decision.168

FATCA has also been severally criticized by both financial and civil organizations in Canada.

Even though there exists a reciprocal treatment from the US, FATCA has remained unpopular and

has received severe criticism.

Rick Waugh, chief executive of the Bank of Nova Scotia, was foremost on this, when he stated

that:

In the wake of recent revelations about surveillance activities by governments

around the world, it's clear that electronic espionage is a major threat for Canadian
banks…FATCA may make this threat…a reality….169
Opinions in Canada have criticized FATCA and the IGA on the following light;

(I) The Importance of Canada as a Sovereign Country

In their arguments, the Isaac Brooks Society decried that,

Any country that enters into an IGA with the US is surrendering its fiscal
sovereignty – control over its finances – to the US Furthermore, to agree to an IGA
is to become a division of the IRS in Canada. Therefore, when Canada considers
whether to sign a FATCA IGA, it must ask herself one simple question:
Do we want Canada to continue to exist as a sovereign country?
If the answer is NO, then sign the agreement. History will remember Prime Minister
Harper as the man who, on the 200th anniversary of the War of 1812, surrendered
Canada to the U.S. What then, would the War of 1812 have been for?

167
Op cit.
168
Cristian Angeloni Canadian duo takes Fatca fight to court of appeals. International Adviser. Available at
https://international-adviser.com/canadian-duo-takes-fatca-fight-to-court-of-appeals/. Accessed on 16 February 2021
169
John Greenwood, Electronic spying 'a big issue' for banks, Scotia CEO Waugh says. Financial Post
Publications. Available at https://financialpost.com/news/fp-street/electronic-spying-a-big-issue-for-banks-scotia-
ceo-waugh-says?r. Accessed on 15 February 2021.

77
 If the answer is YES, then simply tell the US that there will no FATCA agreement.
Not now. Not ever!170

(II) The IGA proposed by the IGA is unfair Because it gives everything to the US and

Nothing to Canada – Furthermore, the US Treasury is attempting to offer what it

has no authority to offer.

Under this clause comes two distinct arguments and facts;

A. It has been argued that the most that Canada can possibly get out of the deal is information on

bank accounts held in the U.S. by Canadian Residents. Canada (like the rest of the world) imposes

taxes based on Canadian residence and not based on citizenship.171

B. The proposed agreement does not guarantee that Canada will even get this information. On

careful review of the wordings of the US-Canadian IGA. The agreement does NOT say that Canada

will get the information. Rather the agreement states that:

…the United States shall continue to cooperate with (FATCA Partner) to respond to
requests pursuant to the Convention to collect and exchange information on accounts held
in US financial institutions by residents of (FATCA Partner)172.

170
The Isaac Brook Society; Ten Reasons Canada Must Say No to FATCA-
.Available at http://isaacbrocksociety.ca/2012/11/22/seven-reasons-canada-must-say-no-to-fatca/.
Accessed on 15 February 2021 and http://www.huffingtonpost.ca/howard-green/td-bank-in-us_b_2490354.html. 15
February 2021.
171
Theresa Tedesco, Ottawa had little choice in signing controversial deal with U.S. tax man. Financial Post.
Available at https://financialpost.com/news/fp-street/ottawa-had-little-choice-in-signing-controversial-deal-with-u-s-
tax-man?r. Accessed on 15 February 2021.
172
Available at Article 7 of the IGA between US-Canada. Sourced from
http://isaacbrocksociety.ca/2012/11/22/seven-reasons-canada-must-say-no-to-fatca/. Accessed on 15 February 2021.

78
 (III) From the perspective of Canada an IGA with the US is a legally binding treaty,

from the US perspective it is at best an “Executive Agreement” falling far short

of being a Treaty.

From the US perspective, the US Treasury is just “promising the world”173. It is possible that the

US Treasury does not even have the legal authority to make the promises they are.

(IV) The US Treasury has confirmed that a FATCA IGA will not require US banks to

do anything that they are not already doing and will not give FATCA Partners

the same kind of information that the US receives.

Commentators in Canada have argued that, US will never bend to sharing like information as

they are seeking from other nations under an IGA174. This they argued can be gleaned from the

speech made on October 12, 2012 by, Mark J. Mazur, Assistant Secretary, Department of the

Treasury. Where he was quoted as saying:

The Information that the United States would agree to exchange under the
reciprocal version of the Model Agreement differs in scope from the information
the foreign governments would agree to provide to the IRS…
While the reciprocal version of the Model Agreement includes a policy
commitment to pursue equivalent levels of reciprocal automatic exchange in the
future, no additional obligations will be imposed on the US financial institutions
unless and until additional laws or regulations are adopted in the United States.175
This had made financial analyst in Canada to contest that, it would be prudent for all countries into

IGAs with the US to make sure that the reciprocal agreements the US offers to enter with other

countries includes the statement that the US will create additional laws or regulations in the US so

173
Ibid,
174
Theresa Tedesco, Ibid; Mark Fleming and Ralph Awrey, Canada’s FATCA pact. Step Journal. Available at
https://www.step.org/step-journal/step-journal-may-2014/canadas-fatca-pact. Accessed on 16 February 2021.
175
Available at http://isaacbrocksociety.ca/wp-content/uploads/2012/11/12SE001798-SIGNED-Paul.pdf.
Accessed on 15 February 2021.

79
there is not different scope for the US IRS and US financial institutions than for that which the

foreign governments will agree to provide to the United States.

Theresa Tedesco continued in his argument that:

Canada negotiated reciprocity from the U.S., which has in theory agreed to share
financial information about foreign residents on a bi-lateral basis. In other words,
Canada received a pledge that the U.S. will share similar information. The problem
is the U.S. government hasn’t quite figured out how American financial institutions
will scour their own books and records in search of tax evading Canadians. In fact,
few expect the U.S. government will actually be able to deliver on this promise –
and if so, in a timely fashion. After all, reciprocity is all in the details and it may
not only be Canadians left fuming by this controversial initiative.176
Another argument that has existed is on the US retaining the power to amend the definition of “US

Persons” and the fact that the US can use the IGA as a means to steal more and more from the

Canadian economy.

(V) “US Persons”, the injustice of Citizenship-Based Taxation and fact that Canadian

citizens are included as US Persons.

As is the case in all countries, U.S. residents are subject to U.S. tax laws. But the US goes further.

It is not just US residents who are subject to US tax laws. The US requires all “US Persons” to be

subject to US tax laws. This is true regardless of where they live. It is understood that there are

approximately one million U.S. citizens who are residents of Canada. Therefore, for Canada to

sign an IGA is to agree to turn over the banking information of not only U.S. residents who have

bank accounts in Canada, but Canada/US dual citizens who reside in Canada (and therefore have

bank accounts in Canada). By this a Canadian expert177 have argued that, the IGA is one sided and

should not have been entered.

176
Theresa Tedesco, Ibid,
177
James Fitz-Morris, Ibid

80
 (VI) Citizenship-based Taxation as a Violation of Human Rights.

Under this context, it has been argued178 that in Canada, FATCA would constitute a violation of

human right under the following context;

- It violates the human right of US citizens abroad.

- It violates International Human Rights Treaties.

- It violates International Law by invading the sovereignty of other nations.

Citizenship-based taxation steals from the Treasuries of other nations.

4.2 Russia179

At the earlier stage of FATCA, it was even muted that resistance to FATCA could get a major

boost if Russia and China choose to not go along180. Is this however the case?

Russia and the United States maintain diplomatic and trade relations. The relationship was

generally warm under Russia's President Boris Yeltsin (1991–1999) until the NATO bombing of

the Federal Republic of Yugoslavia in the spring of 1999 and has since deteriorated significantly

under Vladimir Putin. In 2014, relations greatly strained due to the crisis in Ukraine, Russia's

annexation of Crimea, and, in 2015, by sharp differences regarding Russian military intervention

178
John S. Wisiackas, Foreign Account Tax Compliance Act: What It Could Mean for the Future of Financial
Privacy and International Law. Emory International Law Review. Vol 31. Issue 4.; FATCA: An Introduction for
Americans to the “Worst Law Nobody Has Ever Heard Of,” Isaac Brock Soc’y (Nov. 4, 2014). Available at
http://isaacbrocksociety.ca/wp-content/uploads/2015/07/Introduction-to-FATCA-for-Canadians.pdf. Accessed on 15
February 2021. See also See Robert Goulder, Litigating FATCA: Rand Paul and Financial Privacy, Forbes (Sept. 16,
2015, 10:36 AM), http://www.forbes.com/sites/taxanalysts/2015/09/16/litigating-fatca-rand-paul-and-financial-
privacy/.
179
Robert W. Wood, FATCA, IRS Global Tax Law, Is Everywhere -- Even Russia & China. Available at
https://www.forbes.com/sites/robertwood/2014/07/01/fatca-is-finally-here-even-in-russia-china/?sh=6d7dacfb30cb.
Accessed on 15 February 2021.
180
Nick Giambruno. Will Russia and China Slay the FATCA Beast? Doug Casey’s International Man
Publications. Available at https://internationalman.com/articles/will-russia-and-china-slay-the-fatca-beast/. Accessed
on 16 February 2021.

81
in the Syrian Civil War. Mutual sanctions imposed in 2014 remain in place. It is thus obvious that

the two countries are not at best in friendship.181

The frosty relationship between both countries, was clearly expected when FATCA was enacted,

for which the Russian Federation is required to comply.

Just like all sovereign nations, Russian laws does not accommodate the operation of laws of other

sovereign nations in Russia. The attendant sanctions and other diplomatic squabbles left the

Russian Federation with no choice but to seek for avenue to settle the national vice seem to be

created by FATCA.

Generally, Russia takes part in the OECD’s Common Reporting Standard (the “CRS”) which

provides for automatic exchange of taxpayer information between the tax authorities of the

participating countries. This means that (i) Russian financial institutions (including banks) are

obliged to disclose information on their clients who are tax residents of other CRS participating

countries to the Russian tax authorities; and (ii) the Russian tax authorities will engage in further

exchange. Russia started to exchange financial information in September 2018.182

Specifically, as it relates to FATCA, on 30 June 2014 Russian Law No. 173-FZ “On specifics of

financial operations with foreign citizens and legal entities, on amendments to the Code of the

Russian Federation on Administrative Offences (…)” dated 28 June 2014 (the “Law”) entered into

force.183

181
"Bush and Putin: Best of friends". BBC. June 16, 2001. Retrieved October 23, 2015. Sourced from
http://news.bbc.co.uk/2/hi/europe/1392791.stm. Accessed on February 2, 2017.
182
Available at https://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/exchange-
relationships/#d.en.345426. Accessed on 15 February 2021.
183
Irina Dmitrieva and John T. Lillis, Legal framework for FATCA in the Russian Federation. White & Chase
LLP Publication. Available at https://www.lexology.com/library/detail.aspx?g=ff639adb-d5c2-4ea5-8c29-
2d46233b02bb.

82
The Law establishes the legal framework for Russian financial institutions to comply with

reporting obligations imposed by the U.S. Foreign Account Tax Compliance Act (known as

FATCA)184. The Law does not expressly mention FATCA but refers to “foreign states’ laws on

foreign account taxations that are in effect when the Law enters into force”. As on 30 June 2014

FATCA was the only such “foreign law”.

The Law applies to certain financial institutions that operate in Russia with regard to their

reportable persons. The scope of financial institutions under the Law (matches to a greater extent

but not fully to FATCA definition of FFIs) includes the following:

- credit organizations;

- voluntary life insurance organizations;

- professional securities market participants such as brokers, securities’ management

companies, depository institutions, clearing institutions;

- asset management companies;

- non-state pension funds, non-state pension funds’ management companies;

- joint stock investment funds, investments funds management companies, mutual funds

management companies.

The Law does not define the scope of reportable persons (i.e., persons that are subject to foreign

states’ laws on foreign account taxation). Instead it delegates the determination of the criteria of

reportable persons (i.e., US persons) to Russian financial institutions that in turn have obviously

to follow the FATCA directly.

184
Russia not intend to change plans on signing deal with US to join FATCA. Russian News Agency.
Available at https://tass.com/economy/697262. Accessed on 15 February 2021.

83
The following persons are explicitly excluded from the reporting obligation (“non-US persons”):

- Russian citizens except for those who have other (different from Kazakhstan, Belarus)

states’ citizenship(s) or residence permit(s) (e.g., a green card);

- Russian legal entities that are by more than 90%, directly or indirectly, controlled by

the Russian state or Russian citizens (as described above).

Notably, the Law deals only with reporting obligation but does not address tax withholding

requirements under FATCA. Financial institutions are required to adopt “internal regulations”

determining (i) criteria of reportable persons (US persons) and (ii) information collection methods.

Regulations shall be published on an official website of the respective financial institution and are

subject to monitoring by the Russian Central Bank.185

Reasonable measures are to be undertaken to identify US persons among current or new clients

entering into financial services agreements with financial institutions.

For transfer of the information to the IRS, a customer’s consent is required. Such consent

simultaneously covers the transfer of the information to the Russian Central Bank, the Federal Tax

Service, and Federal Service for Financial Monitoring (Rosfinmonitoring) (“authorized bodies”).

Financial institutions must render the following notifications (within specific deadlines):

- on registration with the IRS – to the Russian Central Bank;

- on reportable customer (once identified) – to the “authorized bodies” in accordance

with procedure to be enacted;

185
Stella Gukova. FATCA (Foreign Account Tax Compliance Act) Requirements. Russian Aspects. 6
International In-House Counsel Journal. 1 (2012-2013). Vol 6. No. 24.

84
 - on information request (once received from the IRS) – to the “authorized bodies” in

accordance with procedure to be enacted;

- on information transfer to the IRS (at least ten days prior to transfer) – to the

“authorized bodies” in accordance with procedure to be enacted.

The Law permits reporting only if the customer’s consent is received and no prohibition on the

information transfer is issued by the Rosfinmonitoring.

If a customer fails to respond to due diligence requests and/or to provide consent within specific

term (e.g. fifteen days for consent), the financial institution is allowed to stop operations for such

a customer (except for payments under enforcement documents, salary, mandatory social

contributions, taxes, transfers to the customer’s other bank accounts, disbursements), or to

unilaterally terminate the customer’s contract186. About new customers, the financial institution

can refuse the contract signing. The Law introduces administrative fines for non-compliance with

notification requirements by financial institutions.187

Lastly, it would be worthwhile to mention that, the Law introduces the obligation for foreign

financial institutions to (by 30 September of a following year) report annually to the Russian

Federal Tax Service details of all financial accounts opened for Russian citizens and Russian legal

entities abroad.188

186
FATCA, a publication of National Settlement Repository. Available at
https://www.nsd.ru/en/documents/fatca/. Accessed on 15 February 2021.
187
Delphine d'Amora. Putin Signs Last-Minute Law to Satisfy FATCA. The Moscow Times June 30, 2014.
Available at https://www.themoscowtimes.com/2014/06/30/putin-signs-last-minute-law-to-satisfy-fatca-a36882
accessed on 16 February 2021.
188
White & Case LLP, Legal framework for FATCA in the Russian Federation. Available at Sourced from:
http://www.lexology.com/library/detail.aspx?g=ff639adb-d5c2-4ea5-8c29-2d46233b02bb. Accessed on 15 February
2021.

85
In the absence of an intergovernmental agreement on a FATCA compliance mechanism between

the US and Russian Governments and but for the adoption of Federal Law No. 173-FZ2 regulating

how Russian financial institutions can report to foreign (in particular US) tax authorities, these

institutions (or more specifically, their officials), would have faced administrative sanctions and

criminal charges for breaching Russian bank secrecy legislation following any transfer of data to

the IRS189. This law was, to an extent, to the relief of Russian financial institutions, but also

imposed certain new reporting obligations on their officials, including an obligation on them to

disclose to the Russian tax authorities that a client is a foreign taxpayer.

It should be noted that the Russian Federation does not have an IGA with US IRS.

4.3 South Africa190

An intergovernmental agreement (IGA) to improve international tax compliance and to implement

the U.S. Foreign Account Tax Compliance Act (FATCA) was signed by the South African

Minister of Finance, Mr Nhlanhla Nene and U.S. Ambassador to South Africa Mr Patrick H.

Gaspard on 9 June 2014.

The IGA, which is an international tax agreement under the Tax Administration Act 2011, was

approved by both Houses of Parliament in terms of section 231(2) of the Constitution and entered

into force on 28 October 2014.

189
FATCA and CRS. CMS Law Tax publication. Available at https://cms.law/en/rus/publication/doing-
business-in-russia-2020/banking-sector/fatca-and-crs. Accessed on 15 February 2021.
190
Available http://www.sars.gov.za/Media/MediaReleases/Pages/26-March-2015---Update-on-
implementation-of-FATCA-in-South-Africa.aspx. Accessed 16 February 2021 https://www.treasury.gov/resource-
center/tax-policy/treaties/Documents/FATCA-Agreement-South-Africa-6-9-2014.pdf. Accessed on 16 February
2021; http://www.sars.gov.za/AllDocs/LegalDoclib/Agreements/LAPD-IntA-EIA-2014-04%20-
%20FATCA%20IGA.pdf and http://www.savca.co.za/wp-content/uploads/2015/01/SARS-releases-guideline-notice-
on-FATCA.pdf. Accessed on 16 February 2021.

86
In terms of the IGA and Public Notices 508 and 509, published in Government Gazette 37778 on

27 June 2014 under the Tax Administration Act, South Africa’s financial institutions are required

to maintain records, collect and submit a return containing the information referred to in the IGA,

to South African Revenue Service (SARS) with effect from 1 July 2014.

In maintaining records and collecting the information, financial institutions must comply with the

due diligence requirements as mandated by the Tax Administration Act and set out in the

prescribed Business Requirement Specification: Foreign Account Tax Compliance Act Automatic

Exchange of Information (BRS: FATCA AEOI) return required under Public Notice 509.

SARS will exchange information with the U.S. Treasury through a process of automatic exchange

of information under Article 26 of the Convention for the Avoidance of Double Taxation and

Prevention of Fiscal Evasion that exists between the two countries. The legal framework for the

implementation of the IGA is therefore completed and firmly in place.

SARS has been working closely with industry bodies to ensure that all financial institutions are

fully prepared to comply with the reporting requirements under the IGA and that deadlines will be

met. In addition, SARS has also published a draft general guide on the implementation of the IGA

to provide further assistance to financial institutions.191

The first reporting period in terms of the IGA closed on 28 February 2015. South African financial

institutions were required to submit the required information for the period from 1 July 2014 to 28

191
Available at
http://www.sars.gov.za/Media/MediaReleases/Pages/26-March-2015—Update-on-implementation-of-FATCA-in-
South-Africa.aspx. Accessed on 16 February 2021.
Where is FATCA in South Africa now? An article published by KPMG South Africa.
Available at https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/Where-is-FATCA-in-South-Africa-now.pdf.
Accessed on 16 February 2021.

87
February 2015 to SARS by 30 June 2015. SARS, in turn, exchanged the information with the U.S.

Treasury by 30 September 2015.

Thereafter, the required information is being submitted annually at the end of May for the reporting

period ending February.

The implementation of the IGA is an important stepping stone for South Africa in preparation for

Automatic Exchange of Information in terms of the Common Reporting Standard, which is the

Global Model for automatic exchange of information. South Africa is one of the early adopters of

the standard and has committed to commence exchange of information automatically on a wider

front from 2017.

On 1st February 2017, the South African Revenue Service (SARS) released Issue 2 of the Guide

for Implementation of the U.S. Foreign Account Tax Compliance Act (FATCA). Issue 2 provides

guidance on the application and interpretation of specific issues arising from the statutory

obligations placed on South African FIs under the FATCA IGA between South Africa and the

United States.

4.5 Lessons for Nigeria.

In this chapter, the writer has carefully, reviewed how FATCA applies in some selected

jurisdiction, specifically, Canada, Russia, and South Africa. Canada represents, the business,

political and financial allies of the US. It is thus not farfetched good reasons, FATCA has been

embraced by the Canadian government, howbeit through an IGA. The Canadian government is

using the same scheme to collate financial data of its citizens resident in the US (although some

commentators has queried, the scale of possible compliance by the US).

88
The IGA in no doubt also presents a harmonized system of reporting and would also reduce

compliance cost on Canadian Banks. Like, Canada, the Nigerian Government can push for an IGA.

The Nigerian system currently lacks coordination, its costly and currently has no benefit for the

Nigerian Government. The information sharing opportunity presented by the IGA, is an advantage

worth considering by Nigerian Government.

Furthermore, the Russian disposition is worth commending. The Russian government, desirous to

comply with FATCA, took steps to enact a law legalizing FATCA reporting in Russian. The law

thus gives the enabling legal environment for financial institutions in Russia to effectively comply

with reporting under FATCA. Nigeria can also adopt this system. Enacting a law to cover FATCA

in Nigeria, would clear the way for effective and more efficient application of same in Nigeria.

Since total non-compliance would occasion harm for financial institutions in the country. Such a

law would also provide relevant regulatory frame work, which would in-turn ensure uniformity,

accuracy and probably a central channel of reporting.

89
CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

The writer has been able to trace and identify the international and local crises that has surrounded

this current requirement of the world police that all financial institutions in the world should

disclose some specified details of US citizens to IRS.

This mandate is not an obligation built as a result of the collective agreement or consensus of all

the nations of the world. It is not a mandate set out in any international protocol, treaty, norm, rule,

or law. But a unilateral act of imposition by a sovereign government over all other sovereigns of

the world.

The Foreign Account Tax Compliance Act can eliminate financial privacy, a right protected by the

by virtually laws of all foreign nations, including the US. As a cushion to International protest and

facilitate international compliance, the U.S. Treasury Department has been negotiating IGAs that

they likely do not have the constitutional standing to make.

The work has firmly established that the Act (FATCA) is not only riddled with issues but has

remained a course of international and domestic concern.

If FFIs can be forced to change the reporting of private financial information despite the laws of

their home countries, what does this mean for the future of financial privacy around the world? If

the United States or any other nation can compel global compliance for one of its regulations, does

this change our understanding of the process by which legislation can rise to the level of

international law? FATCA opens the door to a possible future where international law is

90
established not necessarily because it is universally accepted but because other nations and their

citizens are faced with financial threats that force compliance, especially from the super-powers

of the world.

There is no harm in nations of the world sharing information on vital issues, after all, the world is

recently turned to a global village. The manner and mode of this request is rather selfish, antique,

barbaric and a show of might by a sovereign over other nations of the world.

Howbeit, nations of the world in fear of being black-listed as non-cooperative, and attendant

financial, economic, even security disadvantage from non-compliance, had encouraged their

financial institutions to cooperate as much as possible.

Some of these nations in a bid to comply and keep the integrity of their sovereignty had entered

IGA with the US. Some had also enacted local laws authorizing compliance.

It is however, the writer’s position that the sovereignty of every state is sacrosanct hence same

should be respected by others. But what can be done against the might of the world police? In this

respect, wisdom is advised.

91
5.2 Recommendations.

The writer has in this work assessed the general scope and hardship posed by the subject under

discussion, the following recommendations are therefore advised as possible panacea to both the

Government and financial institutions in Nigeria.

What should the Nigerian Government do?

- The Government where it feels obliged to comply with FATCA, upon acceptance of

reciprocity by the US government, should enact a law authorizing compliance with

FATCA. The Government should also enter IGA with the US which ensures reciprocity.

- The Government should design means of central compliance. That is, all reports under

FATCA should be channelled through a unified or singular entity, such as the Central Bank

of Nigeria or the Federal Inland Revenue Service. This will assist in scrutinizing and

harmonizing the level of information being disclosed.

- If the Government does not feel itself obliged to create the necessary instrument legalizing

the application of FATCA in Nigeria, then it should be bold enough to ask all Banks not to

comply. This will save the institution the uncertainty created by the Legal loop-hole.

What should the Banks do?

- A delegation of the Bankers committee through the Central Bank of Nigeria, should lobby

the National Assembly to promulgate a law adopting or domesticating FATCA.

- In the absence of any law domesticating FATCA, Banks should seek for the closure of all

FATCA related account until the holders signs a pact with the Banks authorizing them to

be FATCA compliant.

92
- The Banks should pass all the charges required for the operation of FATCA on the affected

accounts.

- The Banks should either train their staff or hire relative experts, who would be able to

ensure compliance with FATCA and while ensuring that non-related and other restricted

or protected information are not let out to third parties.

- Banks should by way of contract (through its account opening forms) elicit the necessary

consent from customers/account holders in order to enable the Banks transmit the required

records to IRS. This would shield Banks from possible suits against right to privacy.

93
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104
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APPENDIX 1.

LIST OF FINANCIAL INSTITUTIONS IN NIGERIA THAT HAS REGISTERED

WITH THE IRS AND THEIR GIIN.

Global Intermediary NAME OF ENTITY COUNTRY

Identification Number
(GIIN)192
8SN0RB.99999.SL.566 AB MICROFINANCE BANK NIGERIA NIGERIA
LTD
93ZBFM.00057.ME.566 ABSA CAPITAL MARKETS NIGERIA NIGERIA
LIMITED
ZGJY42.00000.LE.566 ACCESS BANK PLC NIGERIA
D6DG95.99999.SL.566 ADVANS LAFAYETTE MFB NIGERIA
2G50ZA.99999.SL.566 AFRICA FINANCE CORPORATION NIGERIA
VXC9F0.00000.LE.566 AIICO INSURANCE PLC NIGERIA
GAYSRS.99999.SL.566 ALLAN GRAY INVESTMENT NIGERIA
MANAGEMENT NIGERIA LIMITED
9P3BAJ.99999.SL.566 ALLAN GRAY NIGERIA EQUITY NIGERIA
FUND
ZAYJZP.00193.ME.566 ALLIANZ NIGERIA INSURANCE PLC NIGERIA
0AH3P9.00006.ME.566 ASHA MICROFINANCE BANK NIGERIA
LIMITED
0AH3P9.00005.ME.566 ASIEA (NGO) NIGERIA
GTIM4K.00000.LE.566 ASSET AND RESOURCE NIGERIA
MANAGEMENT HOLDING COMPANY
LIMITED
XRT953.00000.LE.566 AXA MANSARD INSURANCE PLC NIGERIA
XRT953.00001.ME.566 AXA MANSARD INVESTMENTS NIGERIA
LIMITED

105
EECSR7.99999.SL.566 CAN PRIVATE EQUITY FUND LP NIGERIA
1ZB0FH.00000.LE.566 CARDINALSTONE PARTNERS NIGERIA
LIMITED
NPLRGC.99999.SL.566 CARDINALSTONE SECURITIES NIGERIA
LIMITED
IXJ603.00003.ME.566 CHAPEL HILL DENHAM ADVISORY NIGERIA
LIMITED
IXJ603.00002.ME.566 CHAPEL HILL DENHAM NIGERIA
MANAGEMENT LIMITED
IXJ603.00001.ME.566 CHAPEL HILL DENHAM SECURITIES NIGERIA
LIMITED
T04M9Y.00069.ME.566 CHERROOTS NIGERIA LIMITED NIGERIA
NXUTG8.00308.ME.566 CITIBANK NIGERIA LIMITED NIGERIA
C2WKNF.99999.SL.566 CORONATION ASSET NIGERIA
MANAGEMENT LIMITED
K54DG4.99999.SL.566 CORONATION MERCHANT BANK NIGERIA
LIMITED
BDJDDS.99999.SL.566 CORONATION SECURITIES LIMITED NIGERIA
FSKPW6.99999.SL.566 CSL STOCKBROKERS LIMITED. NIGERIA
LVG30T.99999.SL.566 DIAMOND BANK PLC NIGERIA
XGSINK.99999.BR.566 ECHOVC PAN-AFRICA FUND I LTD - NIGERIA
BRANCH
1HX7QV.99999.SL.566 ECOBANK DEVELOPMENT NIGERIA
COMPANY LIMITED
H2YNI5.99999.SL.566 ECOBANK NIGERIA LIMITED NIGERIA
ET7CYH.99999.SL.566 EDC FUND MANAGEMENT LIMITED NIGERIA
RYQRKV.99999.SL.566 EDC SECURITIES LIMITED NIGERIA
DBPZZG.00014.ME.566 EFG HERMES NIGERIA LIMITED NIGERIA
TFVHX1.00000.SP.566 FBN CAPITAL ASSET MANAGEMENT NIGERIA
LIMITED
F8DB0C.00000.LE.566 FBN HOLDINGS PLC NIGERIA
F8DB0C.00002.ME.566 FBN INSURANCE LIMITED NIGERIA
F8DB0C.00006.ME.566 FBNQUEST ASSET MANAGEMENT NIGERIA
LIMITED
F8DB0C.00019.ME.566 FBNQUEST CAPITAL LIMITED NIGERIA
F8DB0C.00008.ME.566 FBNQUEST FUNDS LIMITED NIGERIA
F8DB0C.00018.ME.566 FBNQUEST MERCHANT BANK NIGERIA
LIMITED
F8DB0C.00007.ME.566 FBNQUEST SECURITIES LIMITED NIGERIA
F8DB0C.00009.ME.566 FBNQUEST TRUSTEES LIMITED NIGERIA
EQF9H9.99999.SL.566 FIDELITY BANK PLC NIGERIA
F8DB0C.00010.ME.566 FIRST BANK OF NIGERIA LTD NIGERIA
ZCHTBN.99999.SL.566 FIRST CITY MONUMENT BANK NIGERIA
LIMITED.

106
7JNBJX.99999.SL.566 FSDH ASSET MANAGEMENT NIGERIA
LIMITED
3C6SG2.99999.SL.566 FSDH MERCHANT BANK LIMITED NIGERIA
D9UTYV.99999.SL.566 FSDH SECURITIES LIMITED NIGERIA
9YS2FE.99999.SL.566 GLOBUS BANK LIMITED NIGERIA
664XFX.99999.SL.566 GREENWICH MERCHANT BANK NIGERIA
LIMITED
9NT1QL.99999.SL.566 GUARANTY TRUST BANK PLC NIGERIA
WTYDP3.99999.SL.566 HALAL CREDIT MICROFINANCE NIGERIA
BANK
PWE5FG.99999.SL.566 HERITAGE BANK PLC. NIGERIA
6CN8UC.00019.ME.566 INTL CAPITAL AND TREASURY NIGERIA
GLOBAL SERV.
JPD06M.00000.LE.566 INVESTMENT ONE FINANCIAL NIGERIA
SERVICES LIMITED
JPD06M.00001.ME.566 INVESTMENT ONE FUNDS NIGERIA
MANAGEMENT LIMITED
C8XUDL.99999.SL.566 JAIZ BANK PLC NIGERIA
XVAZM9.99999.SL.566 KEYSTONE BANK LIMITED NIGERIA
IB8WRL.99999.SL.566 LEADWAY ASSURANCE COMPANY NIGERIA
LIMITED
F0AC04.99999.SL.566 LOTUS BANK LIMITED NIGERIA
XHD5FS.99999.SL.566 LOTUS CAPITAL LIMITED NIGERIA
83F0J5.99999.SL.566 MERISTEM WEALTH MANAGEMENT NIGERIA
LIMITED
NXUTG8.00309.ME.566 NIGERIA INTERNATIONAL BANK NIGERIA
NOMINEES LTD
F0KFJA.99999.SL.566 NIGERIA MORTGAGE REFINANCE NIGERIA
COMPANY
4J0WWX.99999.SL.566 NIGERIAN INTERNATIONAL NIGERIA
SECURITIES LIMITED
JAGSU5.99999.SL.566 NOVA MERCHANT BANK LIMITED NIGERIA
Y9T11T.00001.ME.566 OLD MUTUAL NIGERIA LIFE NIGERIA
ASSURANCE COMPANY LIMITED
V0XJW6.99999.SL.566 PARALLEX BANK LIMITED NIGERIA
1XB4BP.99999.SL.566 PIONEER MANAGEMENT & NIGERIA
BUSINESS VENTURES LLP
AMLLRJ.99999.SL.566 POLARIS BANK LIMITED NIGERIA
NV995Y.99999.SL.566 PROVIDUSBANK NIGERIA
IBT87I.00437.ME.566 PRUDENTIAL ZENITH LIFE NIGERIA
INSURANCE LIMITED
GDV2UQ.00036.ME.566 RAND MERCHANT BANK NIGERIA NIGERIA
LIMITED
GDV2UQ.00079.ME.566 RMB NIGERIA NOMINEES LIMITED NIGERIA

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28H1SE.99999.SL.566 SAFARI TRUST NIGERIA
NT5AZL.00005.ME.566 SAFETRUST MORTGAGE BANK NIGERIA
LIMITED
1VEJ6S.00000.SP.566 STANBIC IBTC ASSET NIGERIA
MANAGEMENT LTD
YGTJ4N.00001.ME.566 STANBIC IBTC ASSET NIGERIA
MANAGEMENT LTD
YGTJ4N.00000.LE.566 STANBIC IBTC BANK PLC NIGERIA
41R5AJ.00000.SP.566 STANBIC IBTC CAPITAL LTD NIGERIA
YGTJ4N.00004.ME.566 STANBIC IBTC HOLDINGS PLC NIGERIA
YGTJ4N.00005.ME.566 STANBIC IBTC NOMINEES LTD NIGERIA
DXXHMB.00000.SP.566 STANBIC IBTC PENSION MANAGERS NIGERIA
LTD
HI3THL.00000.SP.566 STANBIC IBTC STOCKBROKERS LTD NIGERIA
YGTJ4N.00007.ME.566 STANBIC IBTC STOCKBROKERS LTD NIGERIA
YGTJ4N.00008.ME.566 STANBIC IBTC TRUSTEES LTD NIGERIA
3Y393H.00000.SP.566 STANBIC IBTC TRUSTEES LTD NIGERIA
T04M9Y.00156.ME.566 STANDARD CHARTERED BANK NIGERIA
NIGERIA LIMITED
T04M9Y.00058.ME.566 STANDARD CHARTERED NOMINEES NIGERIA
(NIGERIA) LIMITED
7SNBUS.99999.SL.566 STERLING BANK PLC NIGERIA
752IFB.99999.SL.566 SUNTRUST BANK NIGERIA LIMITED NIGERIA
5ZEUQ3.99999.SL.566 TAJBANK LIMITED NIGERIA
G5ME2G.00036.ME.566 THIRD PARTY PREPARERS 36 NIGERIA
D41R3M.99999.SL.566 TITAN TRUST BANK LIMITED NIGERIA
TYDH3W.99999.SL.566 UNION BANK OF NIGERIA PLC NIGERIA
FTMA0U.00000.LE.566 UNITED BANK FOR AFRICA PLC NIGERIA
YM30ZD.99999.SL.566 UNITY BANK OF NIG PLC NIGERIA
BW26SA.99999.SL.566 VALUE ALLIANCE FUND NIGERIA
LMBHU6.00000.LE.566 VETIVA CAPITAL MANAGEMENT NIGERIA
LIMITED
LMBHU6.00004.ME.566 VETIVA FUND MANAGERS LIMITED NIGERIA
LMBHU6.00005.ME.566 VETIVA TRUSTEES LIMITED NIGERIA
94XSIM.99999.SL.566 VICTORIA TRUST NIGERIA
TIX54E.99999.SL.566 WEMA BANK PLC NIGERIA
NEFAIK.00023.ME.566 WEST AFRICAN INFRASTRUCTURE NIGERIA
INVESTMENT MANAGERS LIMITED
2N6L6J.00000.SP.566 WORLD RECORD ENTERTAINMENT NIGERIA
F3G7YC.00000.SP.566 WORLD RECORD ENTERTAINMENT NIGERIA
CEO OCEANWAVE
4IT277.00382.ME.566 YORAM LIMITED NIGERIA
4UELJ1.00000.LE.566 ZENITH BANK PLC NIGERIA

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