Combating the crimes of money laundering and terrorism financing in Nigeria: a legal approach for combating the menace
| DOI | https://doi.org/10.1108/JMLC-12-2021-0143 |
| Published date | 17 February 2022 |
| Date | 17 February 2022 |
| Pages | 268-289 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Olusola Joshua Olujobi,Ebenezer Tunde Yebisi |
Combating the crimes of money
laundering and terrorism financing
in Nigeria: a legal approach for
combating the menace
Olusola Joshua Olujobi
Department of Public and International Law, College of Law,
Afe Babalola University, Ado Ekiti, Nigeria, and
Ebenezer Tunde Yebisi
Department of Private and Business Law, College of Law,
Afe Babalola University, Ado Ekiti, Nigeria
Abstract
Purpose –This study aims to investigate the Federal Government’sfailure to combat money laundering
and terrorism financing andthe various hurdles to enforce the Money Laundering (Prohibition)Act, 2012 (as
amended), effectively,which prohibits illegal earnings criminally induced investments in and out of Nigeria.
This has had an impact on the country’s economic potential and its image in the international community.
Despite many anti-corruptionlaws criminalising money laundering and terrorismfinancing, it is rated among
the nationswith the highest poverty index despite its immense natural resources.
Design/methodology/approach –This study usesa conceptual legal method to help a doctrinal library-
based investigationby using existing material. This study also makes use of main and secondary legislation,
such as the Constitution, the Money Laundering (Prohibition) (Amended) Act 2012 and the Terrorism
(Prevention) Act 2013 (as amended), as well as case law, international conventions, textbooks and peer-
reviewed publications. A comparison of anti-money laundering legislation in Canada, the UK, Hong Kong,
China and Nigeria was conducted, with lessons learned for Nigeria’s anti-money laundering and anti-
terrorismfinancing laws. According to the findings, the Act is silent on the criminal use of legitimate earnings
to fund terrorismand cultism.
Findings –There is no well-defined legal frameworkfor asset recovery and confiscation. In Nigeria’s legal
system, this evident void mustbe addressed immediately. To supplement existing effortsto prevent money
laundering, the researchdevelops a hybrid model that incorporates the inputs of government representatives
and civil societyorganisations. This study suggests a complete revisionof the Act to eliminate ambiguity and
focus on thegoals of global anti-money laundering and anti-terroristfunding restrictions.
Research limitations/implications –One of the limitationsof this study is the paucity of literature and
data on money laundering and terroristfinancing in Nigeria due to the secrecy around the crimes, which do
not give room for the collectionof statistical data and due to the transactional nature of the crimes. This is not
Funding: This research did not receive any specific grant from funding agencies in the public,
commercial, or not-for-profit sectors.
“Compliance with ethical standards”.
Disclosure of potential conflicts of interest: Not applicable. no conflict of interest whatsoever.
Research involving human participants and/or animals: Not applicable.
Informed consent: Not applicable. Ethics approval and consent to participate: Not Applicable.
Consent for publication: Not Applicable. Availability of supporting data: Data and materials used were
acknowledged. Competing interests: The authors declare no conflict of interest whatsoever. Authors’
contributions: The authors contributed solely to the success of the manuscript. Acknowledgment
Applicable.
JMLC
26,2
268
Journalof Money Laundering
Control
Vol.26 No. 2, 2023
pp. 268-289
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-12-2021-0143
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
to submit that no attemptshave been made in the past or recent times to quantify the globalvalue of money
launderingand its effects on Nigeria’s economy. Such attemptshave been inconclusive and inaccurate.
Practical implications –The dearth of records on the magnitude of money laundering in Nigeria has
limited generalising the research findingsdue to the limited access to some required information. However,
this study is suitable for adoption in othersectors of the economy in dealing with clandestineness in money
laundering and terrorism financing. Future researchers are commended to use the quantitative assessment
method to appraise the effects of money laundering and terrorist financing laws and policies in Africa to
supplementthe current literature in the field.
Originality/value –The research develops a hybrid model that incorporates the inputs of government
representatives and civil society organisations. This study suggests a complete revision of the Act to
eliminate ambiguity and focus on the goals of global anti-money laundering and anti-terrorist funding
restrictions.
Keywords Money laundering, Terrorism financing, Corruption, Panaceas, Nigeria
Paper type Research paper
1. Introduction
Money laundering has attracted international attention due to its tendency to undercut
hard work, ethics and honesty while promoting terrorist financing and activities. In
Nigeria, public funds are stolen and moved to private accounts in other countries or
used to buy homes and invest in equities in Nigeria and elsewhere. Corruption has
hindered the state’s capacity to use current resources efficiently and ethically to meet
its population’s developmental needs. As a result, its economic strength erodes,
harming its inhabitants, the ultimate victims of crime and national progress. As a
result, a paradigm shift is required, including civil society organisations’contributions
to fighting money laundering (Olujobi et al., 2021).
Money laundering is a long-standing global issue owingto criminals’ongoing efforts to
conceal the source of theirunlawful funds and legitimise their future use. Terroristfinancing
and money laundering use similar methods and features (United Nations Conventions on
Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988, Vienna
Convention). Terrorist financing, on the other hand, lacks a universally acknowledged
definition. The United Nationsdefines it as the provision of assistance for terrorist activities
and operations, notably financialsupport under Article 2 of the International Conventionfor
the Suppression of the Financingof Terrorism,1999.
Global efforts are being made to establish appropriate and effective anti-money
laundering countermeasuresto ensure that criminals are denied legal access to the proceeds
of their crimes and make it difficult for them to protect their money from the long arm of
anti-money laundering legislation. The Federal Government has established various anti-
money laundering measures; however, they have been mainly ineffective due to their
continued high-profile moneylaundering incidents. According to the Financial Action Task
Force (FATF), money laundering is the process by which criminals conceal their illicit
origins to legitimate their ill-gotten gains and usury (Financial Action Task Force (FATF,
2021a, 2021b).
Money laundering, a serious issue requiring local and international responses, is
cloaked in secrecy and linked to drug trafficking and terrorist financing. However, it is
critical to note that Nigeria’s approach to money laundering has been reactive rather
than proactive.
The Federal Governmentenacted a legal framework to monitor the source of wealth of its
citizens and residents, as well as the applicationof such funds, to emphasise the importance
of integrity in business and financialsector activities, having realised the need to protect the
Money
laundering and
terrorism
financing
269
To continue reading
Request your trial