The Crime Of Money Laundering And Criminal Enforcement In Nigeria

Money laundering is the illegal concealing of money obtained from criminal or illicit activities with the purpose of appearing to have been gotten from a legitimate source.

The Economic and Financial Crimes Commission (EFCC) empowered by The Economic and Financial Crimes Commission (EFCC) Act is the agency responsible for the regulation, investigation and prosecution of economic and financial crimes in Nigeria. Other government agencies involved in investigating economic crimes include; National Drug Law Enforcement Agency (NDLEA), Central Bank of Nigeria (CBN), Nigeria Police Force and Nigerian Customs Service.

Anti-Money Laundering (AML)

Anti-Money Laundering includes set of policies, laws and regulations designed to prevent and combat financial crimes and illegal activities.

The key Nigerian AML legislation and regulations are as follows:

  • Money Laundering Act.
  • Terrorism Prevention Act, 2012 (as amended).
  • Terrorism Prevention (Freezing of International Terrorist Funds and other Related Matters) Regulations, 2013.
  • Economic and Financial Crime Commission (Establishment) Act 2004.
  • Banks and Other Financial Institutions Act (BOFIA) 1991.
  • CBN AML/CFT Regulations, 2013.
  • CBN Act, 2017.
  • CBN AML/CFT Risk-Based Supervision Framework, 2011.
  • CBN Circulars and other communications by regulators.
  • National Drug Law Enforcement Act (1990).
  • Other international instruments (such as FATF Recommendations, United Nations Security Council Resolutions).

Designated Financial Institutions and Businesses

AML policies and regulations are applicable to some financial institutions and other designated businesses such as banks advisory firms, jewelers, chartered accountants, legal practitioners, hotels, casinos, supermarkets, tax consultants, car dealers, dealers in luxury goods, bureaux de change, insurance institutions, money brokerage firms, investment management firms, project consultancy firms, and pension fund management firms. These financial institutions and designated businesses are required to maintain compliance programmes under the Money Laundering Act which include the following:

  • Designation of an AML chief compliance officer at management level.
  • Identifying AML regulations and offences.
  • Identifying the nature of money laundering.
  • Reporting money laundering “red flags” and suspicious transactions.
  • Meeting reporting requirements.
  • Carrying out customer due diligence.
  • Adopting a risk-based approach to AML.
  • Record-keeping and adhering to retention policy.
  • Monitoring of employees’ accounts.

Offences and penalties

Generally, natural persons and non-juristic persons can be investigated, prosecuted and convicted for money laundering offences. The maximum penalties for natural persons are a term of imprisonment of between 7 to 14 years, a fine of at least 1 million Naira. The penalties for non-juristic persons include the prosecution of the principal officers of the corporate body and winding up of the corporate body, or the winding up and forfeiture of assets and properties. There are however other options opened to a defendant in a money laundering cases such as Plea bargains, settlement agreements, prosecutorial discretion. The records of the fact and terms of such settlements are usually not made public. The court may order the forfeiture or confiscation of proceeds and assets whether tangible or intangible, gotten directly or indirectly from a criminal or illegal activity on trial.

Money laundering offences can be prosecuted in Nigerian courts without time restrictions. There is no provision for statute of limitation for money laundering offences in Nigeria. AML laws in Nigeria have extraterritorial reach.  The offence of money laundering has been extended to apply to natural or legal persons outside of Nigeria as provided under section 15(2) of the Money Laundering Act. The laundering of the proceeds of foreign crimes is also punishable in Nigeria.

Administration and Enforcement of AML

The CBN, EFCC and Special Control Unit against Money Laundering are the government agencies responsible for compliance and enforcement of AML requirements.

The CBN as a money laundering regulatory agency set up Guidelines which stipulate that banks within free trade zones (FTZs) are required to ensure strict adherence to the provisions of the Money Laundering Act, Terrorism (Prevention) Act, 2011 (as amended) and the CBN AML/CFT Regulations for Banks and Other Financial Institutions in Nigeria, 2013. Private individuals engaged in international trade are also subject to AML policies, requirements and compliance.

By Adeola Oyinlade & Co

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