1.0BACKGROUND OF STUDY
For most countries, money laundering and terrorist financing raise significant issues with regard to prevention, detection and prosecution. Sophisticated techniques used to launder money and finance terrorism add to the complexity of these issues. Such sophisticated techniques may involve different types of financial institutions; multiple financial transactions; the use of intermediaries, such as financial advisers, accountants, shell corporations and other service providers; transfers to, through, and from different countries; and the use of different financial instruments and other kinds of value-storing assets. Money laundering is, however, a fundamentally simple concept. It is the process by which proceeds from a criminal activity are disguised to conceal their illicit origins. Basically, money laundering involves the proceeds of criminally derived property rather than the property itself. The financing of terrorism is also a fundamentally simple concept. It is the financial support, in any form, of terrorism or of those who encourage, plan, or engage in terrorism. Less simple,
1.Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism Second Edition,2006 by The International Bank for Reconstruction and Development/The World Bank/The International Monetary Fund. however, is defining terrorism itself, because the term may have significant political, religious, and national implications from country to country. Money laundering and terrorist financing often display similar transactional features, mostly having to do with concealment. Money launderers send illicit funds through legal channels in order to conceal their criminal origins, while those who finance terrorism transfer funds that may be legal or illicit in origin in such a way as to conceal their source and ultimate use, which is the support of terrorism. But the result is the same—reward. When money is laundered, criminals profit from their actions; they are rewarded by concealing the criminal act that generates the illicit proceeds and by disguising the origins of what appears to be legitimate proceeds. Similarly, those who finance terrorism are rewarded by concealing the origins of their funding and disguising the financial support to carry out their terrorist stratagems and attacks.
According to the Nigeria Anti-Money Laundering Implementation Plan 2004, money laundering and terrorist financing is a relatively new offence in Nigeria’s criminal jurisprudence. It was seriously addressed for the first time following the enactment of the Money Laundering Act, 1995. This legislation was limited in scope, as its only predicate offence was drug related. 2. Money Laundering Act,1991 and AML Implementation Plan 2004 It would appear that the principal source of money laundering in the country today is proceeds from corrupt practices associated with Politically Exposed Persons (PEPs). Other sources of money laundering include proceeds from illicit traffic in drugs, financial frauds in banks, tax scams, forex malpractices, and advance fee fraud, etc. There is also a large informal sector with substantial circulation of money which encourages money laundering. The enactment of the Economic and Financial Crimes Commission and Money Laundering (Prohibition) Acts has now provided a robust legislative and institutional framework to combat Money Laundering and Financing of Terrorism. Terrorism and terrorist financing on the other hand, have not posed any major challenge in Nigeria. Terrorism (but not terrorist financing) has been a crime under the Criminal and Penal Codes. Until recently, when a case of terrorism was charged to court, there had been no case of any person being charged, tried or convicted for terrorism. There seems to be no known domestic threat of terrorism in Nigeria. However, there are occasional incidents of religious crises as well as armed robbery, hostage taking and kidnapping in...