Nigeria's Money Laundering (Prohibition) Act 2004: a tighter noose
| Pages | 173-190 |
| Date | 01 April 2006 |
| DOI | https://doi.org/10.1108/13685200610660989 |
| Published date | 01 April 2006 |
| Author | Andrew I. Chukwuemerie |
| Subject Matter | Accounting & finance |
Nigeria’s Money Laundering
(Prohibition) Act 2004:
a tighter noose
Andrew I. Chukwuemerie
Ebonyi State University, Port Harcourt, Nigeria
Abstract
Purpose – To show that the new Money Laundering Act 2004 is tougher on criminals than previous
legislation in Nigeria.
Design/methodology/approach – Examines the Act in detail.
Findings – Despite its new toughness, the Act still needs further enhancements in order to achieve
100 per cent success in view of Nigeria’s present social dynamics.
Originality/value – Probably the first comprehensive examination of the 2004 Act.
Keywords Money laundering,Nigeria
Paper type Viewpoint
Introduction
The rate of scams and frauds in Nigeria’s financial sector and by a few Nigerian louts
outside the country has been a source of tremendous concern to Nigeria and Nigerians
in recent years. Commercial lawyers and criminal lawyers have even been more
worried by the trend, all of whom have joined with law and policy makers to ensure
that the law matches the men of crime inch for inch and in fact stamps out their
menace. One such beautiful piece of legislation which has employed almost everythi ng,
including near-draconism, to fight criminals is the Money Laundering (Prohibition)
Act, 2004 passed into law by the National Assembly in March 2004.
If the Act is faithfully implemented by the Economic and Financial Crimes
Commission, the Central Bank of Nigeria, the National Drug Law Enforcement Agency
and the Minister of Commerce on all of whom the Act vests supervisory and
implementive roles[1], the war against money laundering, though by no means an easy
enterprise in any jurisdiction, may well be won in the country very soon.
This paper analyses the Act’s provisions with a view to seeing how adequate of
otherwise they are for the crusade against money laundering. It comes out with a
verdict that though some provisions are insufficient for the aims they set out to achieve
the Act is generally good. It equally postulates that though some provisions are
otherwise draconian they are understandable in the circumstances in which the
country has found itself and that they are part of the extraordinary measures excused
by s. 45(1), 1999 Constitution as permissible in a democratic society in such
circumstances. The paper first examines preliminary matters such as the fact that
though the country has been given a bad name by its few louts the majority of
Nigerians are honourable and hard working people.
It canvasses the further point that even in such notorious crimes as advance free
fraud, the proceeds of which the Act attacks as much as the laundering of the proceeds
of all other crimes and unlawful endeavours, several criminally minded non-Nigerians
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Nigeria’s Money
Laundering
Act 2004
173
Journal of Money Laundering Control
Vol. 9 No. 2, 2006
pp. 173-190
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685200610660989
out to dupe the country or its nationals have equally been responsible for the
conception and escalation of those crimes. Part 2 examines the criminalisation of
negligence in such cases where the culpable party, a bank for instance, would formerly
have been liable only intorts to its customers.
Nigeria, rate of financial crimes and bad image abroad
How notorious Nigeria got with respect to financial crimes, against the proceeds of
which the Act is mainly targeted, in the recent past is a matter for deep regret. The
situation, which has been worsened by adverse international media attention, has
almost made people lose sight of the fact that the generality of Nigerians, particularly
outside government and politics, are decent hardworking people.
It is considered appropriate even before we go into the main issue of this work to
point out that the level of misbehaviour that has necessitated the near draconian
approach of the Act in some of its provisions is not the general character of Nigerians
but only of a very small few. The proper Nigerians are busy making their worthwh ile
contributions at the domestic as well as international fora[2].
It is also true that such crimes as advance free fraud have been promoted by the
equally condemnable greed and avarice of the non-Nigerian victims. The victims
normally become victims because they consent to corrupt and criminal proposals for
them to siphon money out of the country with or without corrupting purported public
officers. No decent corruption eschewing person can become a victim of such things.
Those victims are as much criminals as the people into whose evil traps they fall, just
as several institutional non-Nigerians are willing collaborators in money laundering.
Until very lately Nigerian corrupt public officers and other money launderers were
always sure that all they needed to do was to get their illicit money across to banks in a
certain country and that country would as it were officially – through its laws –
protect them and the illicit money to the detriment of millions of Nigerians living in
abject poverty. The recent case of Societe Bancaire (Nigeria) Ltd v. Magarida S. De
Lluch[3] is a typical reflection of what normally happens – at least in advance fee
frauds. The respondent agreed to provide $50,000,000 with which some public officers
were purportedly to be bribed so as to enable her and her two Nigerian proposed
partners in crime to secure a contract for the construction of a “Central Bank of
Nigeria” in Abuja. If her greed and disposition to the crime had not blinded her
understanding the least efforts in inquiries would have enabled her discover or confirm
that the Central Bank of Nigeria building was already completed and put to use in
Abuja. When she later discovered that she had been duped she traced the money to an
account in the Appellant bank. She then sued the bank for recovery of the money. She
instituted the Action at the Lagos State High Court instead of the Federal High Court as
designated by the Constitution[4]. In upholding the preliminary objection against the
competence of the State High Court to entertain the matter, Pats-Acholonu, JSC
captured the issue of the joint culpability of the fraudsters and their victims in the
following words:
I cannot, however, fail to comment at the manner the respondent in this matter readily parted
with the sum of money being claimed. Would she do the same thing in Germany where she
hails from? The consideration for parting with the money is tainted with dirt, corruption and
blatant dishonesty. I can’t help saying that she had hoped to reap an unconscionable
unimaginable profit, id est, reaping where she did not sow. It is the likes of her that watered
JMLC
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