The recent statement attributed to the Economic and Financial Crimes Commission (EFCC), warning Nigerian lawyers against charging clients in foreign currencies and describing the practice as “illegal and unethical,” raises an important question of law: What specific written law makes the mere charging of professional fees in foreign currency a criminal offence?
Reports of the EFCC’s statement indicate that its Acting Zonal Director, Lagos Zonal Directorate 2, ACE I Bawa Usman Kaltungo, stated that the Commission had cases involving lawyers who charged fees in dollars and warned that culpable practitioners could be prosecuted.
There is no dispute that the Naira is Nigeria’s legal tender. Section 20 of the Central Bank of Nigeria Act 2007 recognises currency issued by the Central Bank as legal tender, while section 20(5) makes it an offence to refuse to accept the Naira as a means of payment in Nigeria, subject to the statutory framework governing circumstances in which other currencies may be used.
However, there is an important legal distinction between refusing to accept the Naira and denominating or agreeing upon a contractual obligation in a foreign currency. The two propositions should not automatically be treated as synonymous.
Indeed, Nigerian appellate jurisprudence presents a significant difficulty for any blanket proposition that agreements expressed in foreign currencies are inherently illegal.
In Koya v United Bank for Africa Ltd (1997) 1 NWLR (Pt 481) 251, the Supreme Court recognised the jurisdiction of Nigerian courts to entertain and determine claims expressed in foreign currency. Similarly, in Broadline Enterprises Ltd v Monterey Maritime Corporation (1995) 9 NWLR (Pt 417) 1, the Supreme Court affirmed that Nigerian courts may, in appropriate circumstances, enter judgment in the foreign currency claimed.
The position was stated even more directly by the Court of Appeal in Teju Investment and Property Co Ltd v Subair [2016] NGCA 134. The Court rejected the argument that it is inherently illegal for parties to enter into contracts stipulating payment in foreign currency and relied upon established Supreme Court authorities on the subject.
This does not mean that every demand for payment exclusively in foreign currency is automatically lawful. The circumstances of the transaction, applicable foreign-exchange regulations, the CBN Act and other relevant legislation remain important. What it means is that the mere fact that an obligation is denominated in foreign currency cannot, without more, automatically be equated with the commission of a criminal offence.
There is an additional constitutional difficulty. Section 36(12) of the Constitution of the Federal Republic of Nigeria 1999 provides, in substance, that a person cannot be convicted of a criminal offence unless that offence is defined and its penalty prescribed in a written law.
Therefore, where prosecution is threatened against lawyers merely for “charging clients in foreign currencies,” the appropriate legal question is not whether an administrative agency considers the practice undesirable. The question is: Which written law creates the offence, what are its constituent elements, and what punishment does that law prescribe?
Professional discipline must equally be distinguished from criminal liability.
Lawyers’ remuneration is specifically regulated by the Legal Practitioners Act, the Legal Practitioners Remuneration (For Business, Legal Service and Representation) Order 2023 and the Rules of Professional Conduct. The 2023 Remuneration Order regulates fees for consultations, incorporation work, litigation, property transactions and other professional services, while the RPC expressly requires lawyers’ fees to comply with the applicable Remuneration Order.
Accordingly, conduct may raise questions of professional ethics without necessarily constituting an economic or financial crime prosecutable by the EFCC. Professional misconduct and criminal liability are distinct legal concepts, even where the same conduct may, in appropriate circumstances, engage both regimes.
The EFCC performs an indispensable role in combating economic and financial crimes. However, that important responsibility must itself operate within the boundaries established by legislation and the Constitution.
If there is a specific statutory provision making the mere charging of legal fees in foreign currency a criminal offence, that provision should be clearly identified.
Until then, the categorical proposition that a lawyer commits an offence simply by denominating professional fees in foreign currency appears considerably broader than the existing statutory language and judicial authorities would support.
The rule of law requires more than declaring conduct illegal. It requires identifying the law that makes it so.
By: Michael A. Akinola, Esq.
