Financial Crime World

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Nigeria’s New Anti-Money Laundering Law: What You Need to Know

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In a bid to combat money laundering and terrorist financing, Nigeria has introduced a new anti-money laundering law. The Money Laundering Act 2022 provides a comprehensive framework for financial institutions, businesses, and individuals to prevent the laundering of proceeds from criminal activities.

Compliance Requirements

The law requires financial institutions, including banks, capital brokerage firms, and other financial institutions, to implement strict compliance measures to prevent money laundering. These measures include:

  • Reporting suspicious transactions within 24 hours
  • Conducting due diligence on customers, including enhanced ongoing monitoring for politically exposed persons (PEPs)
  • Maintaining records of individual transactions for a minimum of five years
  • Implementing internal policies and procedures to prevent money laundering
  • Undertaking risk assessments for new products, business practices, and technologies

Penalties

The law provides severe penalties for non-compliance, including fines, imprisonment, or revocation of corporate licenses. Individuals found guilty of money laundering offenses can face imprisonment from four to 14 years, while corporate entities can be fined up to five times the value of the proceeds of the crime.

Key Provisions

  • The law defines “funds” to include financial assets and requires financial institutions to report suspicious transactions within 24 hours.
  • Financial institutions must conduct due diligence on customers, including enhanced ongoing monitoring for PEPs.
  • Records of individual transactions must be maintained for a minimum of five years.
  • Internal policies and procedures must be implemented to prevent money laundering.
  • Risk assessments must be undertaken for new products, business practices, and technologies.

Impact

The new law is expected to have a significant impact on Nigeria’s financial sector, reducing the risk of money laundering and terrorist financing. Financial institutions must adapt quickly to comply with the new requirements, or face severe penalties.

Conclusion

The Money Laundering Act 2022 provides a robust framework for combating money laundering in Nigeria. Compliance with the law is crucial to preventing money laundering and maintaining the integrity of the financial sector.