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NFIU releases guidelines on money laundering

The Nigerian Financial Intelligence Unit (NFIU), has released new guidelines to mitigate money laundering, terrorist financing, and proliferation of weapons among others, with effect from March 1st 2023.

The provisions of the framework also prohibit cash withdrawal from public accounts and ban the payment of estacodes and overseas allowances to civil and public servants in cash

A statement signed by the NFIU Director, Mr Modibbo Tukur, says it was in an apparent drive to complement the recent efforts by the Central Bank of Nigeria (CBN) to tackle terrorism-related financing as well as promote a cashless economy.

Mr Tukur said the Unit supports the CBN’s circular on cash withdrawal limit which is in harmony with the law, provided in Section 2 of the Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA, 2022), stressing that the new guidelines will support the efforts of the apex bank.

The NFIU Director said the guidelines became necessary considering the provisions and enforcement requirements of the law, particularly Sections 2 and 13 of the MLPPA, 2022, Section 26 of the Proceeds of Crime (Recovery and Management) Act, (POCA) 2022, and the CBN circular on the revised cash withdrawal limits, issued pursuant to its powers under the CBN Act, 2007, and Banks and Other Financial Institutions Act, 2020.

Tukur, explained that the unit noticed in the process of its financial transactions analysis that civil servants were, “becoming more and more vulnerable to money laundering and its predicate offences due to their exposure to cash withdrawals from public accounts.”

According to him, the NFIU analysis spanning 2015 to 2022, showed that the federal government, states, and local governments withdrew N225.72 billion, N701.54 billion, and N156.76 billion respectively – all in cash.

He further said “The cash withdrawals directly contravene the provisions of the MLPPA, 2022 and the Proceeds of Crime (Recovery and Management) Act, 2022 (POCA, 2022) which provide the legal framework setting limitations on cash transactions and sanctions for infringement of the provisions.

“Section 2 of the MLPPA, 2022 restricts cash payments of a sum exceeding N5 million (or its equivalent) for individuals, and N10 million or its equivalent for a body corporate. Section 19 of the MLPPA, 2022 imposes a fine of at least N10 million or imprisonment for a term of at least three years (or both), in the case of individuals; and a fine of N25 million in the case of a body corporate. Section 26 of POCA, 2022 makes provision for the seizure and detention of cash over the prescribed amount under the law.”

Tukur explained that most cash withdrawals from public accounts were in excess of N5million and N10million respectively was prohibited and liable to imprisonment upon conviction.

He stated that, “The breach of this particular provision became so rampant because there are heavy withdrawals of cash from public accounts necessitated by inflation and changes in the economy, and also due to payment for overseas travels in terms of estacode and other overseas allowances.”

He stressed that by the principles of Section 2 (Cash Transaction Outside Financial Institutions Limit), and Section 13 (Use Of New Products, Business Practices and New Technologies) of the MLPPA, 2022, cash withdrawals must be prohibited in order to mitigate the risk of exposure of public servants to these crimes and protect the financial system from continuous abuse.

Writing by Julian Osamoto; Editing by Adeniyi Bakare