2010 - Money Laundering Legislations in Nigeria
The Lagos State Government has signed into Law a bill for the regulation, standardisation and grading of Hotels and other Tourism businesses in Lagos State. This new law amends the Hotel Licensing Law 2003, and requires that no person, whether corporate or an individual, shall operate a Hotel establishment or practice any form of tourism business in Lagos State without it first obtaining a license from the Lagos State Hotel and Tourism Licensing Authority. Any contravention of this law attracts a fine ranging from N100,000 to N500,000 or a term of imprisonment of two years.
There is no definitive statutory definition of what constitutes a Money Laundering offence. The Anti-Money Laundering/Combating Financing of Terrorism Regulations 2009 however defines Money Laundering as the process whereby criminals attempt to conceal the origin and or ownership of property and other assets that are or were derived from a criminal activity or activities. These regulations go further to acknowledge that money laundering and terrorism financing are now a global phenomena and malaise which pose major threats to international peace and security, national development and progress, if left un-combated.
The combined provisions of the Money Laundering Act, 2004 and the Anti-Money Laundering/Combating Financing of Terrorism Regulations 2009 provide a guide on what financial activity could constitute money laundering. While there is currently before the Nigerian National Assembly the Money Laundering Act (Repeal and Re-enactment) Bill 2010 which Bill seeks to, among other things, increase the cash amount(s) or withdrawal(s) that a financial institution or a non-financial institution must statutorily report to the financial regulators, a consideration of the existing Money Laundering Law is vital to both financial institutions and non-financial institutions and their customers.
Money Laundering (Prohibition) Act, 2004
The Money Laundering (Prohibition) Act, 2004 (“the Money Laundering Act”) makes various provisions prohibiting the laundering of the proceeds of a crime or of any criminal or illegal activity, and provides for appropriate penalties for money laundering infringements.
According to the provisions of the Money Laundering Act, no person or corporation or organisation is allowed to make or accept cash payments of a sum in excess of N500,000.00 or its equivalent in the case of an individual, and N2,000,000.00 or its equivalent in the case of a corporation, unless such cash payment or acceptance is undertaken through a financial institution. Also, a transfer of funds or securities to or from a foreign country in excess of US$10,000 or its naira equivalent must be reported to the Central Bank of Nigeria (“CBN”) or the Securities and Exchange Commission (“SEC”) in the case of a public corporation.
The mandatory reporting of all monetary transfers to or from outside the country must indicate the nature of the transfer, the amount of the transfer, the names and addresses of the sender and the receiver of the funds or securities that were transferred, and the ultimate beneficiary of the transfer if different from the latter persons. The Nigerian Custom Service (“NCS”) is also mandatorily required to forward all monetary declarations it collates to the Central Bank of Nigeria.
The Central Bank of Nigeria with the Securities and Exchange Commission are in turn required to forward weekly reports of the above mentioned declarations, submitted to them, to the Economic and Financial Crimes Commission (“EFCC”). Despite this provision, the EFCC is itself empowered to directly demand and receive these reports or declarations directly from the Financial Institutions concerned.
Another money laundering prevention mechanism is the requirement that all financial institutions must verify their customers’ identity and physical address before establishing any business...
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