Financial Crime World

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Nigeria’s Regulatory Bodies Failing to Effectively Combat Financial Crime

A recent assessment by the global financial watchdog, FATF (Financial Action Task Force), has revealed that Nigeria’s regulatory bodies are still struggling to effectively combat financial crime. The country received a mixed bag of ratings, with some areas showing significant improvement while others remained unchanged.

Areas for Improvement

The report highlighted several areas where Nigeria needs to improve, including:

  • Money Laundering Offence: The country was found to be partially compliant in this area.
  • Confiscation and Provisional Measures: Nigeria also received a partial compliance rating.
  • Terrorist Financing Offence: The country’s efforts to combat terrorist financing were deemed partially compliant.
  • Targeted Financial Sanctions Related to Terrorism and Terrorist Financing: Nigeria was found to be partially compliant in this area.

Positive Ratings

On the positive side, Nigeria scored high in several areas, including:

  • Financial Institution Secrecy Laws: The country’s laws regarding financial institution secrecy were deemed effective.
  • Customer Due Diligence: Nigeria’s customer due diligence procedures were found to be robust.
  • Record Keeping: The country’s record-keeping practices were deemed satisfactory.
  • Reliance on Third Parties: Nigeria was found to rely adequately on third parties in its anti-money laundering efforts.

Concerns Remain

However, other areas remain a concern, including:

  • Non-Profit Organisations: Nigeria was found to be non-compliant in this area.
  • Financial Intelligence Units: The country’s financial intelligence units were deemed ineffective.
  • Regulation and Supervision of DNFBPs (Designated Non-Financial Businesses and Professions): Nigeria was found to be non-compliant in this area.
  • Transparency and Beneficial Ownership of Legal Persons and Arrangements: The country’s transparency and beneficial ownership practices were deemed unsatisfactory.

International Cooperation

The FATF report also highlighted the importance of international cooperation in combating financial crime, with Nigeria receiving high ratings for:

  • Mutual Legal Assistance: The country’s mutual legal assistance mechanisms were deemed effective.
  • Extradition: Nigeria’s extradition procedures were found to be satisfactory.
  • Other Forms of International Cooperation: The country was found to cooperate effectively with other countries in combating financial crime.

Call to Action

The Nigerian government has been urged to take immediate action to address the identified shortcomings and improve its regulatory framework to effectively combat financial crime. The country’s financial sector is a key driver of economic growth, and it is essential that it is protected from criminal activities such as money laundering and terrorist financing.

Conclusion

The FATF report provides a roadmap for Nigeria to improve its regulatory framework and strengthen its capacity to combat financial crime. It is now up to the government to take concrete steps to address these issues and ensure that the country’s financial sector is safe and secure for all stakeholders.