Money laundering is the act of concealing the true origin and purpose of illegally acquired money. It is punishable in Nigeria with a jail term of between 7 and 14 years.
For purposes of Nigeria’s anti-money laundering laws (“AML”), a non-financial institution (“NFI”), is any of:
dealers in jewelleries, cars, luxury goods, precious metals and stones, real estates, and mechanized farming equipment and machineries;
professionals such as chartered accountants, audit firms, tax consultants, legal practitioners;
organisations such as hotels, casinos, supermarkets, clearing and settlement companies;
Non-governmental and or not-for-profit organisations;
such other businesses as the Federal Ministry Industry, Trade and Investments (the “Ministry”) or appropriate regulatory authorities may from time to time designate
A NFI has an obligation to verify all its customers’ identities and update their relevant information. It also has an obligation to ensure that all transactions carried on by the customer is consistent with its business and risk profile.
All transfers to or from a foreign country which exceeds US$10,000 (“reportable foreign transfers” or “RFT”) or its equivalent are to be reported to any of the Central Bank of Nigeria, the Securities and Exchange Commission of Nigeria, the Economic and Financial Crimes Commission (“EFCC”) or the Special Control Unit on Money Laundering (“SCUML”). SCUML is an office within the Ministry. Failure to report an RFT attracts, for an individual, imprisonment for at least 3 years or a fine of N10million or both. The fine for corporates is N25million.
Cash-based transactions for individuals is limited to N5million in Nigeria; in other words, an individual cannot collect or pay more than N5million in cash at any time. The limit for corporate organisations is N10million. Collection of cash which exceeds these thresholds attracts, for an individual, imprisonment for at least 3 years or a fine of N10million or both. The fine for corporates is also N25million.
Every single transaction, lodgement or funds transfer above N5million in the case of an individual or N10million in the case of a corporate body must be reported in writing by NFIs to the EFCC within 30 days of the transaction. Failure to so do attracts a fine of between N250,000 and N1million for each day of default.
NFIs have an obligation to enquire from their customers and at the same time report all suspicious transactions in writing to the EFCC. The unjustifiableness and unreasonableness of transactions are sufficient to qualify them as suspicious. Failure to comply with this obligation attracts a fine of N1million for each day of default.
NFIs are required to preserve both the records of their customer’s identification and that of reported transactions, for a minimum period of 5 years.
Officers of the Ministry, the EFCC and the National Drug Law Enforcement Agency (“NDLEA”) are empowered to demand, obtain and inspect the books and records of any NFI to confirm its compliance with the foregoing.
All criminal cases relating to money laundering, including all the offences or failures mentioned above, are to be instituted at the Federal High Court. The cases are to be heard expeditiously as the Court is statutorily mandated, subject to the 1999 Constitution, not to entertain any application for stay of proceedings until judgment is delivered.
For further information on the foregoing, please contact us by email: ao2alert@ao2law.com with the subject: “The National Action Plan on Ease of Doing Business”
