ANALYSIS OF THE LEGISLATIVE &

INSTITUTIONAL FRAMEWORKS
FOR COMBATING MONEY
LAUNDERING

By:
Killi Nancwat
3rd September, 2017

1
 TABLE OF CONTENTS
I. Introduction-------------------------------------------------------------------------------------------------
---------------3
II. Meaning of Money
Laundering-----------------------------------------------------------------------------------3
III. Historical Background of Money
Laundering--------------------------------------------------------------3
IV. Stages of Money
Laundering--------------------------------------------------------------------------------------3
1. Placement-----------------------------------------------------------------------------------------------
--------------3
2. Layering-------------------------------------------------------------------------------------------------
----------------4
3. Integration----------------------------------------------------------------------------------------------
---------------4
V. International Fight Against Money
Laundering-----------------------------------------------------------4
1. Concept--------------------------------------------------------------------------------------------------
---------------4
2. International
Bodies----------------------------------------------------------------------------------------------5
3. International
Conventions-------------------------------------------------------------------------------------5
VI. Modes of Fight Against Money
Laundering----------------------------------------------------------------6
1. Modes---------------------------------------------------------------------------------------------------
----------------6
2. Efficacy of the
Regime------------------------------------------------------------------------------------------7
3. Challenges of the
System-------------------------------------------------------------------------------------8
4. Recommendations-------------------------------------------------------------------------------------
-----------8
VII. Diffusion of the
Unproven-------------------------------------------------------------------------------------------9

2
 1. Concept--------------------------------------------------------------------------------------------------
---------------9
2. Levels of Diffusion &
Implementation-------------------------------------------------------------------9
3. Power and Coercion in Policy
Diffusion-----------------------------------------------------------------9
4. Impact on Developing
Countries-------------------------------------------------------------------------10
VIII. Interface Between Money Laundering & Anti-Corruption------------------------------------------
10
IX. Economic Rationale of Money
Laundering---------------------------------------------------------------11
1. Rationale of Maximising the Expected Value or Cost Benefit of the Crime---------11
2. Impact of Anti-Money Laundering Measures on the Economy----------------------------11
X. Money Laundering in
Nigeria------------------------------------------------------------------------------------11
1. Legislations---------------------------------------------------------------------------------------------
------------11
2. Enforcement--------------------------------------------------------------------------------------------
------------12
3. Requisite Provisions of the Money Laundering (Prohibition) Act 2011---------------12
XI. Money Laundering Under Foreign Jurisdictions: USA & UK--------------------------------------
13
XII. Conclusion--------------------------------------------------------------------------------------------------
--------------13
XIII. Bibliography------------------------------------------------------------------------------------------------
-------------15

INTRODUCTION
This disquisition basically centres on the analysis of money laundering activities at both
the international and national realm. Firstly, a brief clarification on the meaning of money
laundering shall be made, including its historical background and the stages at which it is being

3
operated. Secondly, the international fight against money laundering shall be considered in terms
of the bodies saddled with the responsibility of checkmating the menace, the modes of fighting
it, its efficacy and challenges. Also, the question of the diffusion of the unproven shall be
analysed in terms of the contention of the developing States vis-a-vis the developed States.
Furthermore, there will be an analysis of the interface or interrelationship between money
laundering and anti-corruption, and also the economic rationale of money laundering. This
treatise will additionally consider the money laundering regime in Nigeria and that of foreign
jurisdictions (USA and UK).

MEANING OF MONEY LAUNDERING

Money laundering simply refers to a situation where money is transferred from one
country to another, which basically involves money gotten from illegal activities such as
corruption, fraud, drug trafficking, kidnapping, etc, and also legitimate funds use in financing
terrorism. It involves the disguise of illicit funds so as not to be easily detected.

HISTORICAL BACKGROUND
Money laundering is as old as money itself. In the time past, no one looked at it as a
crime; it was the underlying or predicate offences that were looked at. In the USA, Al Capone, a
notorious gangster was indicted for the first time in 1931 for evading Federal taxes. In
Switzerland, there was a form of bank secrecy in the early 1930s which helped people to hide
away money in fear of the Nazi regime. 1 In Canada, the first conscious attempt at money
laundering can be traced to the 1920s and 1930s, when strict temperance laws prompted a highly
profitable underground economy of liquor distilling and distribution. The first attempt in Nigeria
was the enactment of the Nigerian Drugs Laws Enforcement Agency (NDLEA) Decree of 1989
that criminalises the laundering of proceeds of hard drug related offences. 2 Today, money
laundering is tied to almost all profit-oriented criminal activity and has become an essential
tactical component of organised crime.3

STAGES OF MONEY LAUNDERING

A. Placement
This involves the movement of cash from its source normally in a disguised or
misrepresented form. It is followed by placing it into circulation through financial institutions,
casinos, shops, bureau de change and other businesses, both local and abroad. 4 The processes of
placement include:
1. Currency Smuggling: physical illegal movement of currency and monetary instruments out
of a country.

1
WH Muller, Anti-Money Laundering – A Short History (Zurich, 2007) pg. 3
2
AA Ige, A Review of the Legislative & Institutional Frameworks for Combating Money Laundering in Nigeria. Pg 8
3
ME Beare & S Schneider, Money Laundering in Canada (University Press, 2007) pg. 3
4
Methods and Stages in Money Laundering <http://people.exeter.ac.uk/watupman/undergrad/ron/methods> Accessed on 31st
August 2017.

4
2. Bank Complicity: this is when financial institutions such as banks, owned and controlled by
unscrupulous individuals suspected of conniving with organised crime groups, provide
leeway for laundering.
3. Currency Exchanges: this involves the liberalisation of foreign exchange markets which
then provide room for money laundering.
4. Blending of Funds: this involves the obscuring of illicit funds into legal transactions.
5. Asset Purchase: this involves the purchasing of assets with illicit funds in order to change its
conspicuous nature.
B. Layering
This is meant to make tracing of illicit funds difficult for the law enforcement agencies. 5
The processes of layering include:
1. Cash Converted into Monetary Instruments: this is done through the use of bankers draft
and monetary orders.
2. Material Assets Bought with Cash then Sold: this involves the reselling of assets bought
with illicit funds locally or abroad to make it difficult to trace.
C. Integration
This is the movement of previously laundered money into the economy mainly through
the banking systems and thus, such money appears to be normal business earnings. In this
process, detection and identification of laundered funds can be provided by informant. 6 The
processes of integration include:
1. Property Dealing: this is the sale of properties to recognised companies thereby making the
proceeds seem legitimate.
2. Front Companies & Front Loans: this involves criminals lending themselves their own
laundered proceeds in an apparently legitimate transaction through front companies that are
incorporated in countries with corporate secrecy laws.
3. Foreign Banks Complicity: this involves foreign banks providing leeway for money
laundering through their banking laws & regulations.
4. False Import/Export Invoices: this involves the overvaluation of entry documents or the
value of funds received from export by import/export companies to justify the funds later
deposited in domestic banks.

INTERNATIONAL FIGHT AGAINST MONEY LAUNDERING

A. Concept
The constantly improving automation of international money transfer makes it easier for
criminals to transfer money on all sides of the world. The increasing stream of drugs money,
terrorist financing, and other illicit funds posed as a major challenge to the international
community. Thus, the international community developed regulations and bodies to fight money
laundering activities around the globe.
B. International Bodies
5
Ibid
6
Ibid

5
1. Financial Action Task Force (FATF): this is an intergovernmental body established to set
world wide standards to fight money laundering. The FATF set global anti-money laundering
standards by issuing 40 Recommendations in 1990. After the September 11, 2001 tragic
event, FATF adopted 9 Special Recommendations on terrorist financing.7
2. Financial Intelligence Units (FIUs): this body engage in exchange of confidential financial
information between member countries to effectively combat money laundering & terrorist
financing.8
3. Egmont Group: this is an informal global network of FIUs or a metamorphosed FIUs
established in 1995 to provide a forum to enhance mutual cooperation and to share
information that has utility in detecting and combating money laundering and terrorist
financing. A policy set by this group is that each member state should have an independent
financial intelligence unit within its national jurisdiction. Nigeria was suspended from the
group due to its failure to comply with the policy. In response to the suspension, the National
Assembly recently passed the Nigerian Financial Intelligence Agency (Est. Etc) Bill 2017
in order to regain its membership in the Egmont Group.9
C. International Conventions on Money Laundering
1. Counter-Terrorism Conventions: the persistence of terrorism throughout history prompted
international institutions to make several attempts to codify international law in this area. The
first of these initiatives is Resolution 2625 of 1970 which established the principle that every
State has the duty to refrain from organising, instigating, assisting or participating in acts of
civil strife or terrorist acts in another State. 10This resolution was later complemented by
Declaration of Measures to Eliminate International Terrorism contained in the General
Assembly Resolution 49/60 of 1994; a UN counter-terrorism policy. The more recent
conventions are the International Convention for the Suppression of Terrorist Bombings
(which covers 80% of all terrorist attacks committed worldwide) and the International
Conventions for the Elimination of the Financing of Terrorism which at the time of the
attacks of September 11, 2001, had been ratified by only three states.11
2. International Drug Trafficking Conventions: the UN Convention Against Illicit Traffic
in Narcotic Drugs & Psychotropic Substances, 1988 laid the foundation for the international
effort to combat crime from a financial perspective by establishing new offences (i.e. money
laundering) and new means of detecting them and seizing their proceeds, and by developing
new procedures for international cooperation.12 This movement was subsequently expanded
through the adoption of regional conventions such as the 1990 Council of Europe

7
WH Muller, CH Kalin, & JG Goldsworth, Anti-Money Laundering: International Law & Practice (John Wiley & Sons Ltd, 2007) pg.
6
8
Ibid at pg. 7
9
Ibid at pg. 7
10
J Sollier, The UN Security Council & the Effort to Combat Money Laundering & the Financing of Terrorism (UNSC Counter
Terrorism Committee, New York)
11
Ibid
12
Ibid

6
 Convention and Basle Committee Statement of Principles; 13and the creation of international
standard-setting bodies like the Financial Action Task Force (FATF) and other more
operational bodies.
Much success of the convention depends on enhanced mutual legal assistance and
extradition process. Given the variety of legal systems, languages and political interests in
the world such matters are not simply resolved. To assist nation states in seeking solutions in
these areas, the UN developed the UN Model Treaty on Extradition for countries to use as
they negotiate arrangements. These models are to recognise differences in legal systems and
suggest bridges between them.14

MODES OF FIGHT AGAINST MONEY LAUNDERING

A. Modes
1. Imposition of Binding Obligations: the UN Security Council put its counter terrorism
policy into practice through a series of complimentary inter-related measures that were
adopted overtime. The first important measure is the Resolution 1368 of 2001 which regards
any act of international terrorism as a threat to international peace and security. This was
subsequently followed by Resolution 1373 of 2001 which covers all aspects of counter
terrorism but focuses particularly on the financial element by imposing on States two specific
obligations to wit:
(a) Criminalising the financing of terrorism under their domestic laws and regulations and
according punishments that duly reflect the seriousness of such acts.
(b) Freezing and confiscating all funds that may be use for the commission of terrorist acts.15
2. Cooperation with Financial Bodies: the Security Council’s counter terrorism policy also
involves cooperation with numerous international organisations and entities in a position to
support its action. The Security Council through its specialised body, the Counter Terrorism
Committee, strongly urged all member states to implement the comprehensive international
standards embodied in the FATF’s 40 Recommendations on Money Laundering and the
FATF’s 9 Special Recommendations on Terrorist Financing. This has institutionalised
cooperation between the two bodies. The Counter Terrorism Committee also works with the
International Monetary Fund (IMF), the World Bank & some of the FATF’s style regional
bodies in providing states, at their request, with financial assistance in preparing draft
legislation, creating monitoring bodies and training the officials involved in this work.16
3. International Approach to Financial Crime: the Security Council does not dissociate the 9
Special Recommendations on Terrorist Financing from the FATF’s 40 Recommendations on
Money Laundering and; thus, the entire prudential system that has been developed since the
creation of FATF’s in 1989 is endorsed as an effective means of combating illicit financing
13
Money Laundering in the EU <http://people.exeter.ac.uk/watupman/undergrad/ron/international> Accessed on 31st August
2017.
14
Ibid
15
J Sollier, The United Nations Security Council & the Effort to Combat Money Laundering & the Financing of Terrorism (UNSC
Counter Terrorism Committee, New York) pg. 3
16
Ibid at pg. 4

7
 transactions. This is especially true in the case of the Counter-Terrorism Committee where
anti-money laundering legislation is considered as an essential means of protecting States’
financial systems from such transactions, particularly those intended to finance terrorist acts
or to support the logistical activities of terrorist groups. In monitoring States’ counter
terrorism mechanisms; the committee verifies that they have appropriate legislation in place
and that the monitoring bodies necessary to its implementation have been established.17
B. Efficacy of the Regime
1. Direct Effectiveness: the first direct effect is the exponential increase in the ratification of
counter terrorism conventions and increase in the ratification of counter terrorism
conventions, and especially of the International Convention for the Suppression of the
Financing of Terrorism. Since 2001 to date, there are 154 States parties to the convention
linked by a general definition of terrorism, a shared concept of the financing of terrorist act
and common obligation to adopt certain prudential measures.
Secondly, banking secrecy seems not to be a valid justification for refusing to requests
for mutual assistance between parties to the convention. In practice, States and their financial
institutions have become more flexible with their modalities for international cooperation. No
banking institution wants to lay itself open to prosecution for complicity in the financing of
terrorism or even, in good faith, to allow terrorist organisations or individuals to maintain
accounts. States which have failed to adopt prudential measures legislations or to criminalise
the financing of terrorism find themselves in a tenuous diplomatic position and subject to
strong international pressure.18
2. Indirect Effectiveness: the political impetus provided by the Security Council has had an
impact on other international bodies, which have developed their own programmes with the
same goals as those of the United Nations. Of particular note is the adoption by regional
political organisations of plans of actions and technical measures that systematically
incorporate a financial component. These organisations normally make direct reference to the
work of the UN Security Council, in order to give their programmes a solid legal basis and,
more importantly, political legitimacy.
Similarly, the discussion of highly technical subjects at the highest levels of diplomacy
has brought money laundering and terrorist financing into the public eye as never before;
they are discussed at submits of heads of states, ministerial meetings and international events.
This new focus of activity has had consequences at the national level, where the authorities
are called upon to work with financial experts and to increase surveillance of all areas of the
economy that may be vulnerable to exploitation by criminals.19
C. Challenges of the System
1. Technical Difficulties: the anti-money laundering mechanisms developed progressively over
more than 20 years are not always appropriate in combating terrorist financing, particularly
when funds are transferred outside the traditional banking system. For instance, in
17
Ibid at pg. 5
18
Ibid at pg. 7
19
Ibid at pg. 7

8
 developing countries, cash transfers are difficult to trace due to shortage of methodological
tools and technical solutions.20
2. Political Difficulties: the jurisprudential question here is whether the mechanism developed
by the Security Council holds through vis-a-vis developing and developed countries? Some
States implicitly refused the Security Council’s authority, viewing it as an ‘old boys’ club’ or
a foreign man’s problem and challenging its right to adopt quasi-legislative measures under
Chapter VII of the Charter, traditionally reserved for crisis settlement, in violation of the
rights of the General Assembly.
International standards for combating the financing of criminal activities also give rise to
sometimes angry discussion; some developing countries consider that the rules designed to
protect the financial system unfairly benefit rich or developed countries since they were
dictated by international financial institutions, in which wealthy States have the greatest
influence. Hence, the imposition of prudential measures and monitoring of the application is
viewed as interference in their internal affairs and a genuine infringement on their
sovereignty.
Other States severely criticise financial sanctions such as those imposed pursuant to
Security Council Resolution 1267 of 1999 concerning Al Qaida and the Taliban on grounds
that the lack of precision on the listing process and freezing of assets gives rise to human
rights violations.21
3. International Financial Structures Difficulties: other problems are linked to international
financial structures that conflict with all policies in the area of criminal law, including those
of the Security Council. Economic imperativeness, national interests & diplomatic alliances
make it impossible to achieve consensus on the radical reform. The proposed solutions
therefore consist of more limited measures that seek to block the transgressions. This policy
may hinder criminal activity, but it cannot wholly eradicate it.22
D. Recommendations
1. There should be foreign aids to developing countries to assist them in strengthening their
anti-money laundering and counter terrorism methodological tools and technical solutions.
2. There should be massive global illumination on money laundering and terrorist activities.
3. There should be more mutual cooperation amongst States in combating the menace
irrespective of political, economic or national differences.
4. There should be an in-depth reform of the international financial system and an end to
tolerance of certain illicit activities of certain territories.23
5. There should be severe diplomatic, economic, and political sanctions to States that fail to
comply with the developed international standards and mechanisms.

DIFFUSION OF THE UNPROVEN

20
Ibid at pg. 8
21
Ibid at pg. 8
22
Ibid at pg. 8
23
Ibid at pg. 8

9
 A. Concept
Thirty years ago, not a single country had a policy against money laundering: currently,
over 170 have very similar Anti-Money Laundering (AML) Policies in place. Why have many
countries with so little in common adopted the same policy so rapidly? This extensive diffusion
is particularly puzzling given the lack of evidence that AML policies actually worked. It is
argued that the process of diffusion in the developing world has been much more power-based
and direct coercion rather than voluntary.24
B. Levels of Diffusion and Implementation
Anti-money laundering best practice is diffused at two levels: the international level and
regional level, and are implemented at the national level. The international level includes actors
such as FATF, the Egmont Group of Financial Intelligence Units, the IMF, and the World Bank.
The regional bodies set up to diffuse AML policy from the regional to the national levels
are:
1. Asian/Pacific Group on Money Laundering (APGML)
2. Caribbean Financial Action Task Force (CFATF)
3. Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering
Measures and the Financing of Terrorism (CECEEAMLMFT)
4. Eurasian Group (EAG)
5. Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG)
6. Financial Action Task Force on Money Laundering in South America (FATFMLSA)
7. Intergovernmental Action Group Against Money Laundering in West Africa
(IGAGAMLWA)
8. Middle East and North Africa Financial Action Task Force (MENAFATF)25
C. Power and Coercion in Policy Diffusion
1. Power and the FATF: some of the strong member States of the FATF such as the USA and
UK show a strong trend of simply not complying with the international AML standards they
collectively create. These hegemonic core States introduce measures for other less powerful
States to follow while not following the measures themselves. 26 The less powerful countries
tend to be more diligent and above board than the powerful States. 27 For instance in 2001, the
FBI in the United States claims that 50% of the worlds’ laundered money is laundered in the
United State, while 99.9% of funds laundered go undetected.28
2. Coercive Diffusion & Blacklisting: AML policy diffusion to countries outside the West has
been indirectly driven though power exercised by international organisations, private firms

24
S Jason, “Power & Discourse in Policy Diffusion: Anti-Money Laundering in Developing States” International Studies Quarterly
(2008) pg. 2
25
SP Looney, Diffusion of the Unproven: the Global Anti-Money Laundering Regime (Budapest, Hungary 2012) pg. 10
26
Sharman, Jason Campbell, “Testing the Global Financial Transparency Regime” International Studies Quarterly 55, no. 4
(2011); 999
27
Sharman 2011 a, Chapter 3, Section: Results, Para. 18
28
Mitchell Daniel, “US Government Agencies Confirm that Law-Tax Jurisdictions are not Money-Laundering Havens” Journal of
Financial Crime II, no.2 (2004) 128

10
 and regulatory networks.29 Developing countries have very few incentives to adopt anti-
money laundering policies. Only coercive leadership from stronger countries and the
outgrowth of blacklisting encourages them.30 The threat of blacklisting and actual
blacklisting brought national officials into transnational AML networks and the FATF
regional bodies. Developing States without AML policy face difficulties and greater
expenses in accessing foreign direct investment and loans from private institutions and firms.
AML policy became a prerequisite for engaging in international transactions and the global
economy.
D. Impact on Developing Countries
Despite differing financial sectors and domestic priorities, many developing countries
nevertheless came to adopt the AML policies designed for Western countries to combat a
problem that is not apparent or perhaps does not exist. The limited financial and human resources
of developing countries are being diverted to AML compliance. AML policies are often in
conflict with reality as well as anti-corruption measures and needs in developing States. There is
also lack of prove of any positive benefit yet there are more developing countries with AML
policies compare to the developed ones.31

INTERFACE BETWEEN MONEY LAUNDERING AND ANTI-CORRUPTION

Corruption refers to the use or misuse of public office for private gain. 32This includes
bribery, embezzlement and misappropriation, obstruction of justice, abuse of function and illicit
enrichment, etc. Money laundering in this context refers to the act of disguising the illicit origins
of money derived from corruption. Corruption is the predicate offence while money laundering is
the secondary offence. Corruption generates huge proceeds/profits that need to be laundered in
order to given an appearance of legality. Thus, the appearance of corruption will incidentally
lead to money laundering activities.33
The need for money laundering arose out of the desire on the part of corrupt individuals
to conceal their ill-gotten wealth and attract less attention and make the funds appear legitimate.
Anti-money laundering tools can and should be use as powerful vehicle to deprive
criminals of their ill-gotten assets and ultimately contribute to detecting acts of corruption. On
the other hand, an effective fight against or prevention of corrupt practices at the national realm
will reduce the extent of money laundering activities at the global level. Due to the close link
between corruption and money laundering, various international forums have noted that a
comprehensive anti-corruption strategy must also include actions to prevent and control the
laundering of corruption proceeds.34

29
S Jason, “Power and Discourse in Policy Diffusion: Anti-Money Laundering in Developing States” International Studies
Quarterly (2008) 26
30
BA Simmons, “International Politics of Harmonization: The Case of the Capital Market Regulation” International Organization
55, no.3 (2001): 605-607.
31
SP Looney, Diffusion of the Unproven: The Global Anti-Money Laundering Regime (Budapest, Hungary, 2012) 27
32
J Edgardo Campos & Sanjay Pradhan, eds. The Many Faces of Corruption, The World Bank (2009)
33
D Chaikin & JC Sharman, Corruption and Money Laundering: A Symbolic Relationship (2009)

11
 ECONOMIC RATIONALE OF MONEY LAUNDERING
A. Rationale of Maximising the Expected Value or Cost Benefit of the Crime
Basically, the decision to commit financial crime or not arises from a process of
maximising the expected value, where the individual weighs, on the one hand, the potential gains
resulting from the criminal act, the amount of punishment and the probabilities of arrest and
imprisonments; and on the other hand, the opportunity cost of committing the crime, defined by
the alternative wages that could be obtained in the labour market. Economist have become
increasingly convinced that economic incentives may be the deciding factors in regards to
individuals engaging in property offences i.e. the cost benefit of the crime.35
B. Impact of Anti-Money Laundering Measures on the Economy
1. Influence on the Criminal World: since the beginning of the fight against money
laundering, the targeted predicate crimes (drug trafficking and organised crime) have grown
and prospered, rather than reducing.36Addictive customers of drug trafficking are still willing
to pay for the goods despite its illegality and high price set by the suppliers. Suppliers are
able to get significant excess profits, which in turn makes the business financially very
attractive.
2. Influence on the Legitimate World: this is categorised into two viz:
(a) Damage on the Society: this include loss of civil liberties (privacy) due to AML
provisions.
(b) Economic Damage: the AML mechanisms increase the direct cost of legitimate markets
transactions in the same way as illegitimate ones. Secondly, economic sectors, actors and
countries with low sophistication of AML systems face heavy discrimination, and are
limited in participating in the benefits of international trade and cooperation.37

MONEY LAUNDERING IN NIGERIA

A. Legislations
The relevant legislations that assist in combating money laundering in Nigeria are:
1. Nigerian Drugs Law Enforcement Agency (NDLEA) Act 1989 which criminalises
laundering of proceeds of hard drug related offences.38
2. Economic & Financial Crimes Commission (Establishment) Act 2004 which empowers
the EFCC to investigate allegations of money laundering.39
3. Money Laundering (Prohibition) Act 2011 which stands as the major legislation against
money laundering activities in Nigeria.40
B. Enforcement
34
Yunus Husein, “The Link between Corruption & Money Laundering: Indonesia’s Experience” Capacity Building Workshop on
Combating Corruption Related to Money Laundering. Bangkok, Thailand (2007) pg. 3
35
Mauro Salvo, Money Laundering as a Threat to Financial Stability: A Risk-Based Approach (Porto Alegre-Rs, Brazil) pg. 3
36
Hans Geiger & O Wuensch, The Fight Against Money Laundering-An Economic Analysis of the Cost Benefit Paradoxon (2006)
37
Ibid at pg. 12
38
AA Ige, A Review of the Legislative & Institutional Frameworks for Combating Money Laundering in Nigeria. Pg.8
39
Ibid at pg. 10
40
Ibid at pg. 17

12
 The relevant organs and institutions of State with the mandate for the enforcement of
money laundering laws in Nigeria are:
1. The Attorney General of the Federation: by virtue of Section 174(1) of the Constitution
of the Federal Republic of Nigeria 1999, the Attorney General of the Federation can
prosecute persons accused of money laundering.41
2. The Nigerian Police Force: Section 23 of the Police Act empowers the police to institute a
criminal proceeding against any person before any court in Nigeria. 42This position was
affirmed in the case of Olusemo v Commissioner of Police.43
3. The Economic and Financial Crimes Commission: Section 6 of the EFCC Act 2004
empowers the Commission to investigate all financial crimes including advance fee fraud,
money laundering, counterfeiting, etc. Section 7 of the Act charges the Commission to
enforce the provision of the Money Laundering (Prohibition) Act 2004 (now 2011).44
C. Requisite Provisions of the Money Laundering (Prohibition) Act 2011
1. Meaning of Money Laundering: this is a situation where a person in or outside Nigeria
conceals or disguises the origin of or converts, transfers or removes from jurisdiction, fund or
property which he/she knows to form part of the proceeds of an unlawful act e.g.
racketeering, terrorism, drug and human trafficking, corruption, bribery, fraud, kidnapping,
robbery, etc. (see Section 15).
2. Anonymous/Secret Accounts: it is illegal to open or maintain an anonymous account in
Nigeria. (See Section 11).
3. Limitation to Make or Accept Cash Payments: any cash transactions exceeding 5 million
for individual or 10 million for body corporate must be done via a recognised and registered
financial institution (see Section 1)
4. Declaration to the Nigerian Custom when Transferring Funds Overseas: any cash or
negotiable instrument in excess of $10,000 which is to be transferred overseas must be
declared to the Nigerian Custom. (see Section 2(3))
5. Obligation to Report Financial Transactions to the EFCC: financial and designated non-
financial institutions are obliged to report to the EFCC any single transaction, lodgement, or
transfer of funds in excess of 5 million for individuals and 10 million for body corporate
within 7 days. (see Section 10)
6. Gambling in Casinos: information about people who gamble in casinos including the nature
and amount involved must be recorded and kept for 5 years. (see Section 4)
7. Data Retention by Financial and Designated Non-Financial Institutions: these
institutions shall keep a record of a customer’s identification for a period of at least 5 years
after the closure of the account or the severance of relations with the customer. (see Section
7)
41
Ibid at pg. 24
42
Ibid at pg. 25
43
(2006) FWLR (Pt. 3)12; Osahon v Commissioner of Police. However, the prosecution powers of the police is inapplicable in the
FCT Abuja by virtue of Section 106 of the ACJA 2015, which only empowers the Attorney General of the Federation, Law officers
in his ministry or department, and legal practitioners empowered by him to prosecute offences.
44
AA Ige, Review of the Legislative & Institutional Transactions for Combating Money Laundering in Nigeria. Pg. 27

13
8. Agents, Conspirators, and Accessories of Money Laundering: it is illegal for individuals
to carry out money laundering activities on behalf of another person. (see Section 18)

MONEY LAUNDERING UNDER FOREIGN JURISDICTIONS: USA & UK

A. USA
1. Official Body: the Office of Financial Assets Control (OFAC) is the official body
responsible for checkmating money laundering activities under the United States jurisdiction.
2. Activities: the various anti-money laundering activities under this jurisdiction are:
(a) Financial institutions are obligated to know their customers’ identities, business and
source of funds.
(b) Financial institutions are to file reports of financial transactions involving $10,000 or
more.
(c) Financial institutions are prohibited from handling the proceeds of crime.45
B. UK
Anti-money laundering regime in the UK has four separate pillars viz:
1. Money Laundering Regulations 2003: financial businesses are to maintain system and
control to prevent money laundering.
2. Financial Services Authority: statutory body which ensures compliance with financial
regulations.
3. Proceeds of Crime Act 2002: imposes obligation on all sectors of the society to report
suspicious money laundering activities.
4. Terrorism Act 2000: prohibits all forms of terrorist financing and fund raising.46

CONCLUSION
It is trite from the discussion that lucid elucidation of money laundering has been made.
Money laundering is no doubt an international menace with national background based on
predicate offences that transcends to the secondary offence itself. Thus, there is a need for both
national and international strengthening of anti-money laundering mechanism to curb the
menace. States should concentrate more on preventing the occurrence of the predicate offences
within their national jurisdiction which will no doubt reduce the prevalence of money laundering
at the international level. This in turn will also address the jurisprudential questions raised by the
diffusion of the unproven argued by developing nations against the developed and powerful
States.

45
Moscow, Money Laundering in the USA (Rosner Moscow & Napierala LLP, New York)
46
P Burrel & K Meakin, Money Laundering in the UK (Hebert Smith LLP, London)

14
 BIBLIOGRAPHY
1. WH Muller, Anti-Money Laundering – A Short History (Zurich, 2007)
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