Comparative Corporate and Financial Law

Another legislation worthy of consideration in Nigeria's approach to combating money laundering is the Money Laundering Prohibition Act 2004 enacted to repeal the Money-Laundering (Prohibition) Act of 2003. The summary of the bill30 is basically 1. To provide for the repeal of the M. L. A of 2003, 2. Make comprehensive provisions to prohibit the laundering of the proceeds of a crime or an illegal act and 3. Provides appropriate penalties and expands the interpretation of financial institutions and scope of supervision of regulatory authorities on money laundering activities among other things.

The Act amplifies on limitation to make or accept cash payment; by putting restrictions on amount of money individual or corporations can transact in a single business,31 imposes duty on relevant authorities to report not only suspicious international transfer of funds and securities, but give account of all transactions. The status of the customer is also dealt with32 as the act makes for his identity to be thoroughly verified. For the first time also, casinos33 were given a legal obligation to verify the identity of customers carrying out financial transactions.

The list of duties and obligations on banks/directors, financial institutions is quite elaborate as the act seeks to ensure money laundering is effectively tackled. Offences are provided for in Part II alongside a definition of money laundering. The act specifies a punishment of not less than 2 years or more than 3 years for anyone found liable on conviction for any of the offences specified. The act is similar to the EFCC act in other respects as regards retention of a proceeds of a criminal conduct and jurisdiction to try offenders.

Hence going by the separate legal approaches in combating money laundering in the UK and Nigeria, the following comparisons are observed 1. There exists a common knowledge of the menace of money laundering and specific laws that arose almost as a result of indirect pressure or foreign presence. The EC directive in the case of the UK and the FATF in the case of Nigeria. 2. Both countries have included in their respective anti money laundering regulations, specific processes for reporting suspected financial crimes. 3. Notably too, both countries repeal and re-enact their laws to meet the changing faces of money laundering.

There was a significant growth in the UK from the Drugs Trafficking Act of 1986 to precise legislation as found in the Proceeds of Crime Act and the Money Laundering Regulations. Nigeria on the other hand, established the EFCC Act 2004 to provide for the inadequacies of its earlier provisions governing financial crimes. Contrasting circumstances are however observed in the adherence to the rules. There is a strict observance/adherence to the rules as observed in the UK as officers follow the due process of effective reporting and feedback on suspected transactions. Detailed reports are also submitted.

In Nigeria however moneybags still transact their businesses especially as regards transactions exceeding the limit, which the law stipulates. This moneybags go scot free with this as often times the management of the financial institutions will not report the matter for fear of losing a "big customer". Another difference in the legislation bothers on procedure as found in Nigeria. An erudite lawyer was observed, "One of the specific problems that have arisen from the use of electronic financial transaction is the manner and procedure for proving the forms of evidence generated by these means or simply proof of such transactions themselves".

Nigerian procedural laws particularly the evidence act that was enacted in the light of an agrarian and pedestrian society have become grossly inadequately to cover the present advancement in technology with the concomitant sophistication employed in the commission of economic and financial crimes. The lack of cyber laws is also identified as one of the differences in the legal approaches to combat money-laundering offences. This makes Nigeria vulnerable to Internet or cyber related offences.


The entire society is adversely affected by money laundering. Its consequences are bad for business, development and government. Money laundering if left unchecked would generate to accumulation of economic power to organised crime. Its social consequences therefore spell doom. A responsibility therefore falls on both the government and society to tackle money laundering effectively. Effective elements in the approach to money laundering will be 1. The co-ordinated and effective procedure of prosecuting offenders.

Example abound on how top public officers or directors of banks face the full wrath of the law and are diligently prosecuted in law courts for flagrant abuse of the law. 2. Existence and membership to regional or international anti money laundering groupings is also an effective approach to money laundering, as it contributes to the harmonisation of laws and standards. Essential update/ review of existing laws/legislations is also an effective approach. Constantly reviewing applicable laws will make it possible to meet the changing tactics employed in money laundering.

Other recommendations to ensure money laundering is adequately combated include; a. Increase in human resources involved in the labour intensive and time consuming work of investigating suspected violations. b. Increase in coordination between agencies (national and international) involved and to improve limited intelligence sharing. c. Introduction of measures that make the movement of money more visible. d. Encouragement of financial supervisors to apply bank-licensing procedures strictly, exchange information and train practitioners. e.

Proper mechanism for handling suspicious report. Money laundering legislation encourages banks to put in place effective procedures to ensure that all persons conducting business with them are properly identified and that transactions that do not appear to be legitimate are reported.


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