Ten-year jail term for money launderers

The Senate yesterday passed the Anti-Money Laundering bill, with a recommendation of a maximum jail term of 10 years, but not less than five years, for offenders, in addition to fines that may be applicable.

Some financial crimes analysts, however, warned that the maximum punishments prescribed in the bill may not discourage offenders, especially compared to what is obtainable in other crimes.

However, the passage of the bill brings Nigeria to the verge of totally fulfilling the requirements of the Financial Action Task Force (FATF), established by the G7 Summit in Paris in 1989.

The new anti-money laundering bill will replace the 2004 version of same bill, which is said to lack the relevant provisions that will make it fully compliant with FATF recommendation.

Full compliance will, however, depend on the speed with which the House of Representatives passes its own version of the bill, which is already awaiting final reading in the House.

Thereafter, major discrepancies between the House and Senate version of the bill will be harmonised in a clean copy that will be adopted by both chambers and forwarded to the president, who appears to be eagerly waiting to sign it into law.

Raised bars

The bill passed by the Senate is slightly different from the version forwarded to the legislators by the president. It raised the bars for cash transaction that can be made outside a financial institution from N500, 000 and N2 million to N5 million and N10 million for individuals and corporate bodies respectively.

The Senate also raised the amount of international transfers that ought to be reported to government agencies from $2,000 to $10, 000 for individuals. It places a duty on bankers and other financial institutions to report international transfers of funds exceeding $10,000 to the Central Bank of Nigeria, from where the records can be accessed by security operatives.

Transportation of cash or negotiable instruments in excess of $10,000 or its equivalent by individuals in or out of the country shall be declared to the Nigerian Custom Service, section 3 of the act prescribed.

Offenders of this section “shall be liable upon conviction to forfeit not less than 25% of the undeclared funds or negotiable instrument or to imprisonment of not less than two years or both.”

The bill also obligates casinos and jewellers, as well as bankers, to properly identify its customers, report transactions exceeding the stated amounts to the appropriate government agency, and subsequently hold their records for at least five years.

Section 9 of the Act requires all banks to designate compliance officers at management level, branches and local offices, who are expected to feed a centralised data base with information.

The Central Bank of Nigeria is empowered by the bill to impose a penalty of not less than N1 million or the suspension of any licence issued to the financial institution or designated non financial institution for failure to comply with this section.

Meanwhile, the Act raised the amount of individual and corporate transactions that all financial institution are mandated to report to the Economic and Financial Crimes Commission (EFCC) from N1 million and N5 million to N5 million and N10 million respectively.

Any financial institution or designated non financial institution that contravenes this provision of this section is liable to a fine of not less than N250, 000 and not more than N1 million for each day the contravention continues.

The Act prohibits numbered or anonymous accounts and empowers EFCC, CBN, and other regulatory authorities to place surveillance on suspected bank accounts, access to computer systems, and other records. It, however, denies them the right to tap suspects’ phone lines.

The bill covers offences including converting or transferring resources or properties derived directly from illicit traffic in narcotic drugs and psychotic substances, and participation in organised criminal group, racketeering, terrorism, terrorist financing, bribery and corruption, tax evasion, sexual exploitation, and others.