FATF Grey Listing: Nigerian Financial System Faces Scrutiny Amidst Ongoing Money Laundering Concerns
Nigeria: A Global Hotspot for Money Laundering and Cybercrimes
- Africa’s most populous nation continues to battle a worldwide reputation for money laundering and cybercrimes despite legislative efforts and international scrutiny
- Home to notorious scams like “Four-One-Nine” or Advance Fee Fraud
- Widespread nature of the criminal enterprise implicates Nigerian citizens and foreigners
- Victims report financial losses, kidnapping, and homicide amid expanding schemes
- Efforts from the Economic and Financial Crimes Commission (EFCC) to address 419-related cybercrimes have had minimal success
Key Nigerian Anti-Money Laundering (AML) Laws and Regulations
- Money Laundering Act. 2012
- Terrorism Prevention Act (as amended)
- Regulations on Terrorism Prevention (Freezing of International Terrorist Funds and Other Matters), 2013
- Economic and Financial Crime Commission (Establishment) Act of 2004
- Banks and Other Financial Institutions Act (BOFIA) of 1991
- AML/CFT Regulations of the Central Bank of Nigeria (CBN), 2013
- CBN Act of 2017
- CBN Risk-Based Supervision Framework for AML/CFT, 2011
- Various CBN circulars and regulatory messages
- Nigerian Drug Enforcement Administration’s National Drug Law Enforcement Act (1990)
Nigeria’s Response to FATF Recommendations (2002)
- Added to Financial Action Task Force’s (FATF) Non-Cooperative Countries and Territories List (NCCT)
- Passed three anti-money laundering laws in response to FATF’s recommendations
- Broadened the scope of the 1995 Money Laundering Act
- Extended reach of BOFI Act of 1991 to cover stock brokerage businesses and foreign currency exchange services
- Established the Economic and Financial Crimes Commission Act (EFCC)
FATF Grey Listing: Consequences and Strides
- Added to FATF grey list on February 24, 2023
- Warned international community of potential money laundering and terrorist financing risks
- Resulted in decline in the value of the Rand and a near 3% loss for the Johannesburg Stock Exchange
- Nigeria presented a 15-point action plan to address noted deficiencies and strengthen AML/CFT framework
Criminal Activities and Illicit Flows
- Corruption and corrupt practices permeating industries and public institutions
- Extensive money laundering landscape includes cybercrime, drug trafficking, arms trafficking, kidnapping, and more
- Proceeds often laundered both within Nigeria and overseas
Sanction Scanner Solutions: Anti-Money Laundering Compliance in Nigeria’s Complex Landscape
- Addressing challenges of AML compliance in Nigeria
- Provides advanced features and solutions to help financial institutions navigate complex legal landscape
- Remains informed about changing AML regulations and evolving threats
- Contact Sanction Scanner for a demonstration to learn more