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  Money laundering has been described as the process of trying to manage the product of crime. The phrase “money laundering” means simply “the washing of money” but a thing is laundered only when it is dirty with the goal of cleaning it.
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The washing of money is infused with an ulterior purpose which is “to cover its dirty origin”. The ultimate aim of money launderers is to create the impression that the funds in their possession were generated from legitimate businesses so as to make it impossible for law enforcement authorities to trace the funds back to the crime and by doing so, they are able to escape being convicted for the earlier crime.

Cash Transactions

The Money Laundering (Prohibition) Act 2011 makes it illegal for any individual to accept or make any cash payment that exceeds Five Million Naira. This means that every cash transaction over Five Million Naira must be done via a financial institution. Any person found guilty of contravening this is liable to imprisonment for a term of not less than 3 years or a fine of Ten Million Naira or to both.

Declaration When Transporting Cash Overseas

The Money Laundering (Prohibition) Act 2011 states that any individual, who is transporting cash or negotiable instruments in excess of US$10,000, or its equivalent, must be declared to the Nigerian Customs Service. Non-declaration of the funds or false declaration is an offence that is punished upon conviction by the individual forfeiting the funds in question, or to imprisonment of not less than two years or to both.

Gambling In A Casino

If you gamble in casinos in Nigeria, then you should be aware that the Money Laundering (Prohibition) Act 2011 provides that a casino must verify the identity of its customers and record all transactions, including nature and amount involved in each transaction, and this information shall be kept in a register and preserved for a period of at least five years after the last transaction recorded in the register.

Data Retention By Financial Institutions And Designated Non-Financial Institutions

The Act provides that the above institutions shall keep a record of a customer’s identification for a period of at least five years after the closure of the account or the severance of relations with the customer.
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This, therefore, means that irrespective of the fact that you have closed your account or dealings with the institution, they are still obliged by law to keep a record of your details. Obligation To Report To The Economic And Financial Crimes Commission (EFCC) The Act provides that financial institutions and designated non-financial institutions are obliged to report to the EFCC any single transaction, lodgement or transfer of funds in excess of Five Million Naira within 7 days. Therefore, individuals should be aware that if they make such transactions, such transactions would be liable to be monitored by the EFCC.

Numbered Or Anonymous Accounts

The Money Laundering (Prohibition) Act 2011 makes it illegal to open or maintain a numbered or anonymous account in Nigeria. A numbered bank account is a type of bank account where the name of the account holder is kept secret, and they identify themselves to the bank by means of a code word known only by the account holder and a restricted number of bank employees, thus providing account holders with anonymity in their financial transactions. The offence is liable on conviction to a term of not less than 7 years but not more than 14 years imprisonment.

Money Laundering Agent, Conspirators, And Accessories

The Act makes it illegal for individuals to carry out money laundering activities on behalf of another person when he/she knows or suspects that the other person is engaged in or has benefited from criminal conduct. Such an act is liable on conviction to imprisonment for a term not less than 5 years or to a fine equivalent to 5 times the value of the proceeds of the criminal conduct or both such imprisonment and fine. The Money Laundering (Prohibition) Act further makes it a crime to conspire, aid, abet, incite, procure, induce or counsel any other person to commit a Money Laundering offence. Anyone guilty of this shall be liable on conviction to the same punishment as is prescribed for the offence under the Act.

Basic Methods Of Money Laundering In Nigeria

  1. Cash removal from the country with couriers or money concealment in the cargo for further repatriation through foreign banks.
  2. Passage of cash accounts, significantly exceeding the client’s actual capabilities.
  3. Multiple funds transfer to the account during the day by different persons.
  4. Transactions on a particularly large scale in the interests of third parties, for example, huge amounts exchanging.
  5. Contracts making with foreign companies for the various information and reference services.
  6. Personal information with knowingly distorted data.
  7. Large amounts depositing in cash.
  8. Fictitious lease contracts and other contracts making for the supply of non-existent goods.
  9. Securities purchase with their transfer to another bank.
  10. Concealment of the true money origin (accounts in foreign banks and cash placement in investment companies, an organization of fictitious companies, securities acquisition, antiques, overseas property, etc.).
  11. A cash transfer to frontmen accounts with a breakdown of amounts.

Conclusion

The negative effect of money laundering on the image of Nigeria cannot be overemphasized. Money laundering has negatively affected financial assistance from the developed countries and financial institutions. The consequence of money laundering is the widening gap between rich and poor people. The unemployed Nigerian youth are drawn into terrorism and criminal activities. All these effects weaken the economy and inhibit the country’s development. Featured Image Sources: The Guardian NG
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This article was first published on 19th April 2021

foluke-akinmoladun

Foluke Akinmoladun is the Managing Solicitor of Trizon Law Chambers. She has been a legal practitioner for 13 years and has experience in a wide range of commercial matters. She is a certified mediator, a member of the Chartered Institute of Arbitrators(UK), holds an Advanced Diploma in Accounting from the Association of Chartered Certified Accountants (UK) and is also a tax consultant. She is a dispute resolution expert, handling commercial disputes from negotiations all the way to litigation (if need be).

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