Financial Crime World

Nigeria’s Money Laundering Landscape Shifts: An Overview of the New Act

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Recent Developments in Nigeria’s Anti-Money Laundering Legislation

The Nigerian government has enacted the Money Laundering (Prevention and Prohibition) Act 2022 to strengthen the country’s legal and institutional framework against money laundering and related offenses. Here’s an overview of the key provisions and new developments:

Key Provisions Retained

  1. Cash Transaction Limits: Individuals and corporates cannot conduct cash transactions exceeding N5M and N10M, respectively.
  2. Transaction Reporting Obligations: Customers are required to disclose transactions above N5M or N10M for individuals and corporates, respectively.
  3. Reporting Cross-border Transfers: Financial Institutions (FIs) must report cross-border transfers greater than $10,000 to the Nigerian Financial Intelligence Unit (NFIU) and Securities and Exchange Commission (SEC).
  4. Declaration of Cash or Negotiable Instruments: Cash or negotiable instruments exceeding $10,000 must be declared to the Nigeria Customs Service.
  5. Customer Due Diligence and Internal Controls: Financial Institutions and Designated Non-Financial Institutions (DNFIs) must adhere to customer due diligence and internal control measures against money laundering.

New Key Provisions

  1. Virtual Assets: Virtual assets, which are digital representations of value that can be traded or transferred and used for payment or investment purposes, are now considered funds.
  2. Virtual Asset Service Providers: Virtual Asset Service Providers (VASPs) have been included in the definition of Financial Institutions.
  3. Supervisory Authority for DNFIs: The Special Control Unit Against Money Laundering (SCUML) was established as the supervisory authority for DNFIs, with power to suspend licenses and impose fines.
  4. Confidentiality Overridden for Specific Transactions: Lawyer/client confidentiality was partially overridden for specific transactions, including property purchases, business sales, management of funds or assets, opening or managing trusts, and creation or operation of accounts.
  5. Risk Assessment for New Products and Technology: FIs and DNFIs must assess money laundering and terrorism financing risks related to new products and technology.

Interesting Observations

  • Non-Profit/Non-Governmental Organizations (NPO/NGOs): NPO/NGOs, previously designated as DNFIs under the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2013, were excluded from the definition of DNFIs in the new Act. However, they remain subject to regulation under the Act, based on section 4 of the Interpretation Act.

These provisions represent a significant leap in addressing money laundering and related offenses within Nigeria. For further discussions, contact our experts:

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