AML LEGISLATION: WHAT THE SENATE SHOULD DO
Repealing the anti-money laundering act is not necessary
We stand with the Central Bank of Nigeria (CBN) opposition to the plan by the Senate to enact a fresh anti-money laundering law (AML). Whatever may be the justification, Nigeria is not lacking in relevant laws against money and related crimes.
We understand that the Senate decision may be a fallout of the recent report by the Inter-Governmental Action Group against money laundering in West Africa (GIABA) established by the Economic Community of West African States (ECOWAS). GIABA had reported that the Islamic State’s West Africa Province (ISWAP) terror group moved a whopping N18 billion annual revenues through the Nigerian financial system to fund its activities. That GIABA report had sparked outrage and ruffled many feathers. Many had attributed the ease with which ISWAP funneled the funds through Nigeria’s financial system to weak legislations while some blamed enforcement lacuna on the part of the Nigerian Financial Intelligence Unit (NFIU) and other related agencies.
However, we believe that we have enough laws to deal with the problem. Apart from the Money Laundering (Prevention) Act 2011 which the parliament seeks to repeal and replace with a new law, there is the Terrorism Prevention Act (as amended), Regulations on Terrorism Prevention (Freezing of International Terrorist Funds and Other Matters), the Economic and Financial Crimes Commission (Establishment) Act of 2004, and the Banks and Other Financial Institutions Act (BOFIA) of 1991 to regulate financial institutions. There are also the CBN’s AML/CFT Regulations of 2013, the CBN Act of 2017, CBN Risk-Based Supervision Framework for AML/CFT, 2011), CBN circulars and other regulatory messages, as well as the Drug Enforcement Administration’s National Drug Law Enforcement Act (1990).
Therefore, there are sufficient grounds to back the CBN position that an amendment rather than a full repeal of the AML is required at this time. To be sure, there are no international sanctions currently in force against Nigeria for money laundering violations. Nigeria is also currently not on the blacklist of the global watchdog, Financial Action Task Force (FATF’s) of countries identified as having strategic AML deficiencies. Indeed, the last FATF had declared that Nigeria is no longer on its list of nations with strategic anti-money laundering weaknesses. Rather, FATF applauds Nigeria’s significant progress in improving its anti-money laundering and counter-terrorism financing regime. As a result, Nigeria is no longer monitored by the FATF as part of its ongoing worldwide AML/CFT compliance process.
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorism financing standards was undertaken in 2021. That evaluation deemed Nigeria compliant for seven and largely compliant for 14 of the FATF 40 recommendations. In 2017, the Heads of Egmont Group of Financial Intelligence Units in the world concluded that legislative changes in Nigeria addressed the issues that led to the suspension of the Nigerian Financial Intelligence Unit that year. Consequently, the suspension of Nigeria was lifted. Also, the United Kingdom last year put Nigeria on its exemption list of high-risk countries for money laundering. For the US State Department, although Nigeria is categorised as a country/jurisdiction of primary concern in respect of money laundering and financial crimes, it is not in any form of blacklist.
All these global clean bills of health would not have been if the AML is flawed. From all available indices, repealing the Anti-Money Laundering Act is not desirable. What is desirable is for the Senate to look at amendments, particularly in areas relating to enforcement. The biggest challenge to the anti-money laundering legislations is the lack of political will and the laissez-faire approach from relevant government agencies.
Nothing underscores this than the current lethargy in the trial of alleged sponsors of terrorism.
