EFCC Recovers Unremitted Revenue: Aiteo, Newcross Pay $3M, N1.3B

• The EFCC recovered $3 million and N1.3 billion in unremitted statutory payments from Aiteo Exploration and Production Limited and Newcross Exploration & Production Limited.
• These funds, representing unremitted stamp duty and pipeline transportation fees, were handed over to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).
• The investigation stemmed from a petition alleging tax evasion and economic sabotage between 2010 and 2019.
• Aiteo owed $38.43 million in stamp duty, while Newcross owed $22,841,662.03 in crude oil transportation fees.
• A presidential fiat obtained by RMAFC in December 2021 authorized the recovery of outstanding revenues due to the Federation.

The successful recovery of these outstanding funds provides a crucial boost to Nigeria's public finances, which are heavily reliant on crude oil earnings.

The Economic and Financial Crimes Commission (EFCC) recently transferred $3 million and N1.3 billion in unremitted federal government revenues to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC). These significant funds were recovered from two prominent oil and gas firms, Aiteo Exploration and Production Limited and Newcross Exploration & Production Limited, following investigations into their statutory payment compliance.

The handover, which took place on a Monday, was publicly announced by the anti-graft agency the following day. Bawa Kaltungo, the acting Zonal Director of the EFCC's Lagos Zonal Directorate 2, formally presented the recovered sums to the RMAFC, underscoring the commission's ongoing efforts in Nigeria oil revenue recovery. The funds represent liabilities established against the two companies for their failure to remit statutory payments federation Nigeria.

The EFCC's investigation into Aiteo Exploration and Production Limited and Newcross Exploration & Production Limited commenced after receiving a petition from a consulting firm engaged by RMAFC. This petition alleged a pattern of conspiracy, tax evasion, and economic sabotage, which collectively resulted in substantial revenue losses for the Federation. A subsequent audit confirmed that both stamp duty and pipeline transportation fees, critical statutory payments, had not been remitted to the government over an extended period.

The audit specifically identified a nine-year period, from 2010 to 2019, during which these unremitted funds accumulated. The affected oil infrastructure included major hubs and pipelines such as Escravos, Pennington, Trans-Forcados, Odudu, Amenam, and the Nembe Creek Trunkline. Aiteo Exploration and Production Limited was found to have not remitted $38.43 million, representing a 1.5 percent stamp duty linked to its acquisition of an Oil Mining Lease and the Nembe Creek Trunkline. Concurrently, Newcross Exploration & Production Limited failed to remit $22,841,662.03 in crude oil transportation fees for its usage of the Nembe Creek Trunkline, which is notably operated as a joint venture between the federal government and Aiteo Exploration and Production Limited.

Both companies acknowledged their outstanding debts and subsequently initiated payments into the EFCC's recovery accounts at the Central Bank of Nigeria (CBN). These payments occurred between January 28 and August 24. Aiteo Exploration and Production Limited remitted $1.5 million and N750 million towards its unremitted stamp duty, while Newcross Exploration & Production Limited paid $1,500,000 and over N553.1 million for its outstanding pipeline and terminal fees. These individual payments collectively sum up to the $3 million and N1.3 billion recovered by the EFCC.

The recovery efforts were bolstered by a presidential fiat obtained by the RMAFC on December 20, 2021. This fiat granted the commission explicit authorization to recover all outstanding revenues owed to the Federation from both public and private entities, signaling a reinforced commitment to fiscal accountability. The failure to remit statutory taxes and fees, such as stamp duty pipeline fees Nigeria, consistently leads to significant revenue shortfalls for the government.

Given Nigeria's substantial dependence on crude oil earnings, the successful recovery of these outstanding funds provides a crucial boost to Nigeria's public finances, which are heavily reliant on crude oil earnings. This action aligns with the EFCC's broader operational focus on recovering proceeds of crimes and unremitted funds for onward remittance to rightful owners. The agency has demonstrated a consistent track record in this area, including the return of over N3.9 billion to the Nigerian National Petroleum Company Limited (NNPC Ltd) in March, the recovery of over N9.4 billion, $21.2 million, and various landed properties in June from an investigation into refinery funds, and the handover of N125 million recovered from an alleged land fraud in August.

Lawyers and compliance officers advising companies in Nigeria, particularly in the oil and gas sector, should proactively review their clients' historical and current compliance with statutory payments like stamp duties and pipeline transportation fees. The EFCC's successful recovery actions, backed by a presidential fiat, signal a heightened enforcement environment for unremitted government revenues, necessitating thorough internal audits to mitigate potential investigations and liabilities.

Source: Reporting based on information from the source.