Senate passes money laundering bill

Posted by admin Latest Politics, Legislature, Senate Tuesday, March 1st, 2011

With an overwhelming voice vote, the Senate on Tuesday passed the Money Laundering (Prohibition) Bill to repeal the 2004 Act The passage of the Bill followed the approval given to the recommendations of Senator Ibrahim Ida-led Ad-hoc Committee that fine-tuned the earlier legislative work carried out by the Senate Committee on Drugs, Narcotics, Financial Crimes and Anti-Corruption in October last year.

The Bill which was meant to replace the 2004 version considered to be deficient in some areas owing to lack of relevant provisions to make it fully compliant with the recommendations of the Financial Action Task Force (FATF) was sponsored by the executive arm of government and submitted to the National Assembly in 2009.
The passed bill by the Senate made more provisions in the prohibition of financing terrorism just as it provided appropriate penalties for offenders as well as expanded the scope of supervisory and regulatory authorities.

Similarly, the new law makes it mandatory for bankers and other financial institutions to report international transfers of funds exceeding $10,000 to the Central Bank from where the records can be accessed by security operatives.
It equally seeks to strengthen the anti-money laundering laws in the country as it prohibits the laundering of the proceeds of a crime or an illegal act just as it provides that a transfer to or from a foreign country of funds or securities by a person or body corporate including a money service business of a sum exceeding US$10,000 or its equivalent, shall be reported to the CBN and the Securities and Exchange Commission in writing within seven days from the date of the transaction.

The new law also made provision that transportation of cash or negotiable instruments in excess of US$500 by individuals in or out of the country shall be declared to the Nigeria Customs Service while a body corporate shall be required to provide proof of its identity by presenting its certificate of incorporation and other valid official documents attesting to the existence of the body corporate.
The bill further states that where a financial institution or designated non-financial institution suspects or has reasonable grounds to suspect that the amount involved in a transaction is the proceeds of a crime or an illegal act, it shall require identification of the customer notwithstanding that the amount involved in the transaction is less than US$1, 000 or its equivalent.

It also seeks to provide stiffer penalties for financial institutions which fail to comply with the requirements of customer identification and the submission of returns on such transactions as specified in the Act within seven days from the date of the transaction.
The Bill also stipulates that the directors, officers and employees of financial institutions and designated non-financial institutions carrying out their duties under the Act in good faith shall not be liable to any civil or criminal liability nor have any criminal or civil proceedings brought against them by their customers.

The implication of this is that directors of the financial institutions, particularly the banks where some of these transactions take place would no longer be afraid of any legal tussle with dubious customers whose actions or transactions have been reported to the anti-corruption agencies.
In the same vein, the new law makes it mandatory that all financial institutions and designated non-financial institutions shall be expected to develop programmes to combat crimes.

It also provides for mandatory disclosure by financial institutions to the Commission in writing within seven and 30 days in any single transaction, lodgment or transfer of funds in excess of N5,000,000 or its equivalent, in the case of an individual or N10,000,000 or its equivalent, in the case of a corporate body.
Similarly, the bill stipulates that any financial institution or designated non-financial institution that contravenes the provisions of the Act is guilty of an offence and shall be liable to a fine of not less than N100,000,000 and not more than N250,000,000 for each day the contravention continues.

The Bill places surveillance of bank accounts on the Commission, Agency , the Central Bank of Nigeria or other regulatory authorities pursuant to an order of the Federal High Court obtained upon an ex- parte application supported by a sworn affidavit made by the Chairman of the Commission or an authorized officer of the Central Bank of Nigeria or other regulatory authorities justifying the request, may in order to identify and locate proceeds, properties , objects or other things related to the commission of an offence under the Economic and Financial Crimes Commission (EFCC) Act.

The Commission is empowered by the new law to place any bank account or any other account comparable to a bank account under surveillance, tap any telephone line or place it under surveillance, obtain access to any suspected computer system, obtain communication of any authentic instrument or private contract, together with all bank, financial and commercial records, when the account, telephone line or computer system is used by any person suspected of taking part in a transaction involving the proceeds of a financial or other crimes.

After a clause-by-clause consideration of the Bill, Senators overwhelmingly voted for its passage with minimal amendments.
In his remarks after the passage of the bill, President of the Senate David Mark congratulated his colleagues for passing the Bill, which he described as long overdue.

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