NigeriaMoney Laundering (Prevention and Prohibition) Act 2022, reports of suspicious transactions and the prohibition on tipping off
Money Laundering (Prevention and Prohibition) Act, 2022, ss. 7 and 19(1)(a)
In force since .
An AI sector rules rule binding private bodies.
- Instrument type
- an act of a legislature
- Obligation class
- Reporting, Prohibition
- Audit expectation
- on_request
- Who audits it
- Regulator
As of .
What it requires
- It reaches you if you are a financial institution as section 30 of the Act defines the term, which includes banks, investment and securities businesses, virtual asset service providers, discount houses, insurance institutions, bureaux de change, finance companies and fund, investment and pension fund managers, or if you are a designated non-financial business or profession (section 7(1)). Treat a transaction as suspicious where it involves an unjustifiable or unreasonable frequency, is surrounded by unusual or unjustified complexity, appears to have no economic justification or lawful objective, is inconsistent with the known transaction pattern of the account or business relationship, or in your opinion involves the proceeds of a criminal activity, an unlawful act, money laundering or terrorist financing (section 7(1)(a) to (e)).
- Report a suspicious transaction to the Nigerian Financial Intelligence Unit immediately (section 7(1)). Within 24 hours after the transaction, draw up a written report containing all relevant information, the reasons and the identity of the principal and, where applicable, of the beneficiary or beneficiaries, take appropriate action to prevent the laundering of the proceeds of a crime or an illegal act, and report the suspicious transaction and the actions taken to the Unit (section 7(2)).
- Apply the reporting duty whether or not the transaction is complete (section 7(3)).
- Where the Unit's acknowledgement of a report is accompanied by a notice deferring the transaction, hold the transaction for the period stated, which may not exceed 72 hours (section 7(5)). Where the acknowledgement carries no stop notice, or the stop notice has expired and no order of the Federal High Court to block the transaction has reached you, you may carry out the transaction (section 7(7)).
- Do not warn or in any other way intimate the owner of the funds involved in the transaction about the report you are required to make or the action taken on it, and do not refrain from making the report (section 19(1)(a)).
These lines are LexLint's reading of the law's text, as of .
If you get it wrong
Criminal exposureYes
Criminal exposure note
Failure to comply with the reporting duty is an offence under section 7(10), punishable on conviction by a fine of N1,000,000 for each day during which the offence continues.
Penalty structure
A financial institution or designated non-financial business and profession that fails to comply with the reporting duty commits an offence and is liable on conviction to a fine of N1,000,000 for each day during which the offence continues.
- Rule
- Per violation only
- As of
- Currency
- NGN
- Per violation unit
- Day
- Per violation amount
- 1,000,000
Over one month of continuous breach, NGN 30,440,000.
Who enforces it
Enforcement body
The Central Bank of Nigeria, the Securities and Exchange Commission, the National Insurance Commission and, for designated non-financial businesses and professions, the Special Control Unit Against Money Laundering
What this law does
Section 7 of the Money Laundering (Prevention and Prohibition) Act, 2022 deems a transaction suspicious where it involves an unjustifiable or unreasonable frequency, is surrounded by unusual or unjustified complexity, appears to have no economic justification or lawful objective, is inconsistent with the known transaction pattern of the account or business relationship, or in the institution's opinion involves the proceeds of a criminal activity, an unlawful act, money laundering or terrorist financing.
A financial institution or designated non-financial business and profession involved in a suspicious transaction must report to the Nigerian Financial Intelligence Unit immediately.
Within 24 hours after the transaction, a financial institution or designated non-financial business and profession involved in a suspicious transaction must draw up a written report with all relevant information, the reasons and the identity of the principal and any beneficiary, take appropriate action to prevent the laundering of the proceeds of a crime or an illegal act, and report the transaction and the actions taken to the Unit.
Under section 7 of the Money Laundering (Prevention and Prohibition) Act, 2022 the duty to report a suspicious transaction applies whether the transaction is complete or not. The Nigerian Financial Intelligence Unit acknowledges receipt of each report made under section 7, and the acknowledgement may be accompanied by a notice deferring the transaction for a period not exceeding 72 hours.
Where the Unit's acknowledgement of a report made under section 7 carries no stop notice, or the stop notice has expired and no court order to block the transaction has reached the financial institution or designated non-financial business and profession, it may carry out the transaction.
A financial institution or designated non-financial business and profession that fails to comply with the reporting duty commits an offence and is liable on conviction to a fine of N1,000,000 for each day during which the offence continues. A director or employee of a financial institution who warns the owner of the funds involved in the transaction about the report, or the action taken on it, or who refrains from making the report as required, commits an offence under section 19 of the Act.
A person who commits the offence of warning the owner of the funds about a suspicious transaction report is liable on conviction to a fine of at least N10,000,000 or imprisonment for a term of at least two years.
The Act defines a financial institution to include banks, body corporates, associations or groups of persons carrying on the business of investment and securities, virtual asset service providers, discount houses, insurance institutions, bureaux de change, finance companies, fund management, investment management and pension funds management businesses, and such other businesses as the Central Bank or other appropriate regulatory authorities may designate.
When LexLint raises it
When your app profile says your app provides financial services.