Banks` compliance with anti-money laundering laws in Nigeria : lessons from the United Kingdom

Abstract

Money laundering has become a disturbing phenomenon which both national and international organisations are tirelessly making efforts to curb. For this reason, various legal frameworks have been introduced to curtail the menace. Some successes have been recorded in many jurisdictions. However, the crime remains pervasive in Nigeria, permeating all sectors of the country’s economy. This is evident from the rate of the offence and the number of court cases pending and others being filed on daily basis in the country on the matter. The inextricable relationship between the crime of money laundering and financial transactions places banks in a sensitive position and makes them a point of focus in the fight against the crime. Expectedly, banks bear many responsibilities and are saddled with significant roles in this regard. Luckily, the law sets down clear criteria to determine how such responsibilities should be discharged and how the roles should be played. Consequently, assessing banks’ compliance with the existing legal instruments becomes imperative. To determine the level of compliance of banks in any country with money laundering laws requires assessing how their performances conform with the international standards. Bearing this in mind, this research examines banks’ compliance with money laundering legislations in Nigeria with specific focus on Money Laundering (Prohibition) Act, 2011 [MLP Act]; Economic and Financial Crimes Commission (Establishment) Act, 2004 [EFCC Act]; Central Bank of Nigeria, Act, 2007 [CBN Act]; Independent Corrupt Practices Commission Act, 2000 [ICPC Act]; and CBN/AML Regulations, 2013. This is done with the aim of measuring the overall compliance with the international standards. In finding solutions to the challenges identified with the Nigerian banks’ less compliance records, lessons are drawn from the United Kingdom where laws are more effective and the banks’ compliance scale is higher. To achieve this, this study adopts qualitative legal research methodology and thereby employs Doctrinal and Non-Doctrinal’ research methods combined with descriptive, interpretative and content analysis techniques. The research relies on both primary and secondary data. The research finds that banks in Nigeria are not substantially complying with the Anti-Money Laundering (AML) laws even though the laws are adequate and of international standard. The research thus notes that banks’ delinquency in this regard is hinged on weaknesses in the implementation and enforcement exercises. The research therefore recommends lessons to be drawn from the UK where their regulatory frameworks ensure effective enforcement of the laws and compliance from the banks. Specifically, to avoid overlapping of functions, unnecessary rivalry and lack of synergy between various law enforcement agencies in the country involved in the fight again the crime of money laundering, a Nigerian National Crime Agency (NNCA) is strongly recommended to be created, like the UK’s National Crime Agency (NCA), as the umbrella body for money laundering and allied crimes control. Creation of a Financial Crimes Court is also seen to be desirable for expeditious prosecution. If this is done, banks’ compliance with AML in Nigeria is expected to be greatly enhanced and success would be achieved in combating money laundering.