Nigeria’s President Muhammadu Buhari has sponsored two bills to check corruption and money laundering in Nigeria in line with the anti-corruption posture of his administration and in consonance with the key thrust of anti-corruption during his election campaign. The two bills – ‘Money Laundering (Prevention & Prohibition) Bill, 2016’ (The Bill) and ‘Mutual Legal Assistance in Criminal Matters Bill, 2016’ sent in January, 2016 are the first set of executive bills sent by the President since assumption of office in May 29, 2015.
The proposed Money Laundering (Prevention & Prohibition) Bill, 2016 provides for the repeal of the Money Laundering (Prohibition) Act 2011 and the 2012 amendment Act to make comprehensive provisions to prohibit the laundering of the proceeds of criminal activities, expand the scope of money laundering offences, provide protection for employees of various institutions, bodies and professions who may discover money laundering, enhance customer due diligence, provide appropriate penalties and expand the scope of supervisory bodies whilst recognizing the role of certain self – regulatory organizations; address the challenges faced In the implementation of a comprehensive anti – money laundering regime in Nigeria.
One aspect of the bill that is very prone to controversy is the definition of Designated Non-financial Business & Professionals (DNFBs). Generally, there are two target groups that legislation on anti-money laundering seeks to capture: financial institutions and DNFBs. DNFBs are organisations that are not strictly financial institutions but transact businesses that involve large amounts of money because of the nature of business. The existing Money Laundering (Prohibition) Act 2011 as amended in 2012 defined Designated Non-financial Institutions (DNFIs) as follows:
“Designated Non-Financial Institution” means dealers in jewellery, cars and luxury goods, chartered accountants, audit firms, tax consultants, clearing and settlement companies, legal practitioners, hotels, casinos, supermarkets, or such other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate”
It is interesting to note that despite the successful outcome of the lawsuit filed by the Nigerian Bar Association: FHC/ABJ/CS/173/2013 between The Registered Trustees of Nigerian Bar Association and Attorney-General of the Federation and Central Bank of Nigeria challenging the inclusion of lawyers in the definition of DNFIs in the 2011 Act, the bill captured this group again. Indeed the scope of DNFIs has been expanded to include many more organisations including law firms and notaries. The interpretation section of the bill – s.55 provides as follows:
“Designated non-financial business and professionals include – (a) Automotive dealers (b) Businesses involved in the hospitality industry (c) Casinos (d) clearing and settlement companies (e) company service providers who provide services to third parties (f) consultants and consulting companies (g) dealers in luxury items (h) dealers in mechanized farming equipment, farming equipment and machineries (i) dealers in precious metals and precious stones (j) dealers in real estate, estate developers, estate agents and brokers (k) high value dealers (l) hotels (m) law firms and notaries (n) licensed professional accountants (o) mortgage brokers (p) non-profit organisations (q) practitioners of mechanized farming (s) religious and charitable organisations (r) supermarkets (s) tax consultants (t) trust and company service providers; or (u) other businesses and professions as may be designated by the Attorney-General in regulations” .
The implication of being listed as a designated non-financial business or profession is that the listed organisation would need to register with the Bureau for Money Laundering Control (the Bureau) which is the body proposed to take over the functions of Special Control Unit on Money Laundering (SCUML) to supervise the activities or designated no-financial businesses and professionals to ensure compliance with the provisions of the law. This would require registration with the Bureau and an obligation to report suspicious transactions to the Nigerian Financial Intelligence Centre, the statutory body saddled with the responsibility of receiving, requesting, analysing and disseminating financial reports on money laundering, terrorism financing and other relevant information to law enforcement, security and intelligence agencies and other relevant authorities. It is believed that an attempt to enforce this legislation, if successful may meet some resistance especially by religious organisations and lawyers who may not wish to have their activities monitored for various reasons.
Image credit: moneylaundry.com