Financial Crime World

Nigeria’s Struggle with Anti-Money Laundering (AML) Regulations

Despite several initiatives by the Nigerian government to combat money laundering, the country remains a significant hub for financial and cybercrime. The menace of advance fee fraud, also known as “419” scam, has been in existence since the 1990s, but it has evolved over time, with criminals from various African countries and others around the world engaging in this illegal activity.

Challenges in Combating Money Laundering

  • The Economic and Financial Crimes Commission (EFCC) has attempted to prevent 419-related cybercrimes, but its efforts have yielded limited results.
  • The commission’s inability to effectively prosecute money laundering cases has been a major challenge.

Nigeria’s AML Laws and Regulations

  • Money Laundering Act of 2012
  • Terrorism Prevention Act of 2012 (as amended)
  • Regulations on Terrorism Prevention (Freezing of International Terrorist Funds and Other Matters) of 2013
  • Others

However, despite these laws, corruption remains a significant obstacle to effective AML enforcement.

FATF Grey List Inclusion

  • Nigeria was placed on the Financial Action Task Force (FATF) grey list in February 2023, citing inadequacies in its AML regulations and risk of money laundering and terrorist financing activities.
  • The country has made significant progress in addressing the deficiencies identified by the FATF.

Progress and Future Actions

  • Nigeria’s Financial Intelligence Unit (NFIU) Chief Executive Officer, Modibbo Tukur, highlighted the country’s engagement with FATF in February 2023.
  • A consensus was reached on a list of 15 specific actions that Nigeria would take to address the deficiencies.

Corruption: A Significant Challenge

  • Corruption is widespread in all institutions, but particularly prevalent in the oil industry.
  • Gifts, bribes, and facilitation payments are common, despite being illegal. Accepting or donating such gifts can result in up to seven years in jail.

Overcoming Challenges with Sanction Scanner’s AML Solutions

  • Financial institutions must be cautious and proactive in ensuring compliance with AML regulations.
  • Sanction Scanner’s advanced features can help institutions navigate Nigeria’s complex AML landscape and address the issue of corruption.
  • The company’s AML solutions enable businesses to fulfill their commitments successfully while gaining insightful knowledge about Nigeria’s changing AML landscape.

Contact Us for a Demonstration

  • Contact Sanction Scanner for a demonstration of how its solutions can support AML compliance efforts in the face of Nigeria’s particular challenges, such as corruption and its inclusion on the FATF grey list.