The viability of recent enforcement mechanism to combat money laundering and financial terrorism (AML/CFT) in Nigeria. An overview
| Pages | 417-433 |
| Date | 02 July 2019 |
| Published date | 02 July 2019 |
| DOI | https://doi.org/10.1108/JMLC-07-2018-0046 |
| Author | Maruf Adeniyi Nasir |
| Subject Matter | Financial risk/company failure,Financial compliance/regulation,Financial crime |
The viability of recent
enforcement mechanism to combat
money laundering and financial
terrorism (AML/CFT) in Nigeria
An overview
Maruf Adeniyi Nasir
Department of Public and International Law,
Osun State University College of Law, Osogbo, Nigeria
Abstract
Purpose –This paper aims to evaluate therecent steps and enforcement mechanisms employed in Nigeria
to combat money launderingand terrorism financing to give a clear and deeper insight to the potentialthat it
portends and locate its workability by combing through various policies that are adapted to reinforce the
existing anti-money laundering/combating financing terrorism(AML/CFT) legal and regulatory framework
in Nigeria. The paper, therefore, provides a comprehensive assessment of these measures to exhume
necessary reinforcement elements required to achieve the desired result by exploring developments from
other jurisdictionsthat have surpassed the country in the AML/CFT crusade.
Design/methodology/approach –This study adopted qualitative research methodology. It is structured
in such a way that mixed qualitative methodology approach as a research strategy is employed. This is achieved
by putting into use the combination of doctrinal and non- doctrinal research methods. Descriptive, interpretative
and content analysis methods are used to analyse various AML/CFT government policies along with the existing
AML/CFT laws. Judicial pronouncements, various scholarly opinions, along with the anti-money law
(AML/CFT) within the Nigeria context are analysed in line with the 40 “Recommendations”of the Financial
Action Task Force which depicts the acceptable legislative and regulatory precedent and an international
standard to measure the adequacy or otherwise of any national or local laws on money laundering.
Findings –Factors that were militating against the effectiveness and positive performance of Nigeria
government to combat money laundering-related matters were identified. A clear-cut amendment to the
existing provisions of law that will address the issue is suggested to enhance the effectiveness and combat
other similar challenges that are likely to come out of these policies, otherwise more problems would be
created thancould be solved.
Originality/value –This paper exposes deficiencies in the present mechanism adopted to combat money
laundering in Nigeria and proffers necessary antidote to facilitate the effectiveness of the legislation. It provides
necessary information that could facilitate amendments and new legislation(s) to curb the defects by the
lawmakers and could serve as a veritable source of information to law students, legal practitioners and academia.
Keyword Enforcement
Paper type General review
Introduction
The problem of money laundering in Nigeria seems to be endemic[1]. This is evident from
the rampant nature evidenced by the numbers of cases thatscattered in various courts that
are in large numbers (Aluko and Bagheri, 2012). Moreover, huge amount of the country’s
resources (like many other developing countries) is reported severally to have been lost
through money launderingand other corrupt practices (Nasir, 2016a). It was an issue which
Money
laundering and
financial
terrorism
417
Journalof Money Laundering
Control
Vol.22 No. 3, 2019
pp. 417-433
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2018-0046
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm
the present government identified as the country’smajor problem upon which its campaign
against the previous government was based and which has served as its focus since the
inception of the present government(Nasir, 2018).
The issue has no doubt taken a centre stage in Nigeria. It appears to have caught the
government’s attention so much that certain steps were taking in the recentpast that were
targeted at redressing the lingering problem of AML. These measures are in five folds and
were targeted in redressing the two identifiable classes of AML challenges in Nigeria. The
challenges that confrontsbanks and which were considered as factors that are hindering the
AML compliance measures according to Nasir (2018) could be classified into two main
categories whichinclude:
(1) banks systemic problems (challenges within the banking sector); and
(2) the ineffective implementation of the existing AML legislations and enforcement
challenges.
A critical assessment of banking sector will show that there are several factors that are
mitigating against the effective compliance of anti-money laundering/combating financing
terrorism (AML/CFT) which are embedded within the banking system. In a recent study
(Nasir, 2018), the followings havebeen identified to be challenges within the banking sector
otherwise refers to as banks systemic problem: Conflict of Interest; Lack of Compliance
Culture and weak ethical standards; Non-availability of technical tools and The bank
chairman/CEO overbearinginfluence (Nasir, 2018).
However, an effective implementation of AML/CFT measures can resolve these
identifiable challenges. Thus, a major antidote to the menace of money laundering and
terrorism lies not only in the availability of laws but required a mechanism that would
guarantee an effective implementationof such laws and regulations (Kepli et al.,2016). This
requirement makes measures taking by the Nigeria in the recent past to combat money
laundering and other relatedcorrupt practices an issue of interest.
The recent pragmatic steps by Nigeria government includes the enactment of
Administration of Criminal Justice Act 2015 (ACJA) which is intended to ignite and ginger
the administration of criminal justicefor the quick and effective dispensation of justice and
by extension addressing those challenges that were classified as implementation and
enforcement challenges.Resolving the implementation and enforcement of AML compliance
challenges is the directionof ACJA.
Other steps are the introductionof Whistle blowing policy which is geared toward given
incentives to get vital information that will also aids enforcements and Bank Verification
Number (BVN) by the Central Bank of Nigeria (CBN) as an identification tools that is
intended to ease the implementation of a core compliance indicesidentification of Customer
as required under Financial Action Task Force (FATF) Recommendation 3. This was also
the direction of the new cashless policy of the government. Recently the Government also
introduced Executive Order 6 2018 which is targeted at unexplained wealth. This is a
systematic meansand an indirect way of recovering the illegally acquired wealth.
These five new steps: Introductionof ACJA 2015; BVN; Whistle blower; Cashless Policies
and Executive Order 6 (Un-explainedWealth Order) are now being examined to evaluate the
extent of its potency andwhat could be done to achieve the targeted goal.
Administration of Criminal Justice Act 2015
The Nigeria Criminal Justice System is confronted with a lot of challenges that has led to
loss of people’sconfidence in the efficacy and efficiency of the administration of justice in
Nigeria. The challenges involved includes the delay in prosecution in term of the
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