The recently enacted Money Laundering (Prevention and Prohibition) Act 2022 contains new provisions that were not present in the repealed Money Laundering Act of 2011. Some of the new provisions are discussed herein. The new law introduces the requirement to report cash transactions in the excess of $10,000 or its equivalent (in funds or securities) to or from a foreign country and carried out by a person or corporate body, to the Nigerian Financial Intelligence Unit (NFIU), in addition to the Central bank of Nigeria (CBN), Securities and Exchange Commission (SEC). The NFIU has been added to the list of agencies to be notified of such transactions.
Section 11(4) of the Act provides that lawyer-client confidentiality shall not apply to transactions such as the purchase and sale of property or a business, management of clients’ money securities and assets, the opening or management of a bank, savings or securities accounts and the creation, operation or management of trusts, companies or similar structures. This provision raises a question about the extent of application of the Rules of Professional Conduct (RPC) for legal practitioners, which provide for confidentiality in lawyer-client relationships. It is also worth noting that section 192 of the Evidence Act 2011 echoes the provision of the RPC on confidentiality, such that communication between lawyer and client in the normal course of employment is privileged. This is also acknowledged in section 16 of the Freedom of Information Act 2015, as well as in S16(2) of the Terrorism (Prevention and Prohibition) Act 2022. In the light of the inconsistency of this provision to similar provisions in other laws, further clarity is required for the purpose of implementation.
Section 13 of the Money Laundering Act mandates financial institutions and designated non-financial businesses and professions to perform due diligence in order to identify and assess the money laundering and terrorism financing risks that may be associated with the development of new products, business practices and delivery mechanisms, as well as the use of new or developing technologies for new and existing products. The relevant institutions, businesses and professions must take appropriate measures to manage and mitigate such risks prior to the launch and use of such products, practices and technologies.
One of the functions of the Special Control Unit Against Money Laundering now established as a department under the Economic and Financial Crimes Commission (EFCC) is to conduct offsite, onsite, and on the spot checks and inspection of designated non-financial businesses and professions for the purposes of money laundering control and supervision.
The penalties for directors and employees of financial institutions for offences under the Act now range from between a fine of N10 million or an imprisonment term of at least 2 years, to a fine of N10 million or imprisonment term of at least 3 years or both (for individuals) and a fine of N25 million for corporate bodies.
Section 23 of the new law expands the jurisdiction of the Federal High Court to try offences regardless of the location where the offence was committed. This implies that it can try offences that were not commenced or completed in Nigeria, where such offences were committed in Nigeria or on a ship, vessel or aircraft registered in Nigeria or by a citizen or non-citizen of Nigeria if the person’s conduct would also constitute an offence under the law of the country where it was committed. The Court will also have jurisdiction where the offence was committed outside Nigeria and the alleged offender is in Nigeria and not extradited to any other country for prosecution.
The Act requires that the Attorney General prepare and submit a Nigerian Money Laundering Strategy Report to the President every two years, which shall contain details such as the number of currency transactions and activities undertaken within the period, convictions for money laundering and terrorism financing offences, areas of high risk concerns encountered, amount of money frozen for drug trafficking, corruption and other criminal activities. The report is also expected to detail plans to reduce and develop a coordinated response to money laundering, as well as improve inter-agency cooperation, among others (section 26). The Act also empowers the Attorney General of the Federation to make orders, rules, guidelines or regulations for the efficient implementation of the Act (section 28).
The interpretation section of the Act contains new and expanded definitions. It is important to note that the new Act now removes non-profit organisations from the list of designated non-financial businesses and professions.