Nigeria continues to develop a robust and comprehensive Anti-Money Laundering (AML) regime, to promote the integrity of the financial and non-financial systems and help protect its citizens from the devastating impacts of Money Laundering on Nigerians.
In 2022, The Government of Nigeria conducted an inherent risk assessment on money laundering (ML) to increase awareness of the threats and vulnerabilities inherent in Nigeria’s financial and non-financial sectors, particularly the reporting entities that have reporting of suspicion transaction obligations and other competent authorities responsible for investigating ML offences. This report provides an overview of the process, the methodology and scope of the assessment. The report responds to the gaps identified in the 2016 National Risk Assessment and the deficiencies noted in the 2019 Mutual Evaluation Report.
The inherent risk assessment consists of an assessment of the ML risk context of Nigeria as a whole (e.g., economy, geography, demographics) and its key economic sectors and financial products. It also takes into account the consequences of ML in Nigeria.
The overall inherent ML risks were assessed by matching the threats with the inherently vulnerable sectors and products through the ML methods and techniques that are used by money launderers and their facilitators to exploit these sectors and products. By establishing a relationship between the threats and vulnerabilities, a series of inherent risk scenarios were constructed, allowing for the identification of the sectors and products that are exposed to the highest ML risks.
The ML threat in Nigeria was assessed for Twenty-One (21) predicate offences that are high proceeds generating, as well as the threat from third-party money laundering. The ML threat was rated for each criminal activity against four rating criteria: the extent of the threat actors’ knowledge, skills and expertise to conduct money laundering; the extent of the threat actors’ network, resources and overall capability to conduct money laundering; the scope and complexity of the ML activity; and the magnitude of the proceeds of crime being generated annually from the criminal activity. The ML threat rating results are presented in Chapter 3.
The ML threats that were rated Very High Risk are Corruption and Bribery, Illicit Trafficking in Narcotics and Fraud.
While participation in an Organized Criminal Group, Trafficking in persons, Smuggling, Environmental Crimes, Illicit Arms Trafficking, Theft and Robbery, Forgery, and Tax Crimes were rated as High Risk.
Similarly, inherent ML vulnerabilities were assessed for different economic sectors and financial products. The Banking Sector and Real Estate Sector were assessed with a Very High inherent risk rating.
Virtual Assets Payment Service Providers (VASPs), International Money Transfer Operators (IMTOs), Bureau De Change (BDC) operators, Payment Service Providers (PSPs), Car Dealers, Dealers in Precious Stones and Metals, Casinos/Lottery, Trusts & Company Service Providers (TCSPs), and the extractive sectors were rated as High Risk.
Chapter 6 of the report highlights the measures adopted by the Nigerian Government to prevent, detect, investigate and disrupt and recover illegal proceeds of crime ML in Nigeria. Nigeria has a comprehensive AML regime that provides a measured approach to combat ML risks. The AML regime entails a comprehensive Legal, Regulatory/Supervisory and well-funded Institutional framework to address preventive measures, enhance policy and coordination both domestically and internationally and ensure effectiveness in the enforcement of ML related matters.
This assessment was led by the Money Laundering Workstream, chaired by the Economic and Financial Crimes Commission (EFCC), of the National Inherent Risk Assessment Working Group with significant contributions from representatives of participating agencies and institutions.
January 10, 2023 Published by The NRA Forum. (Download PDF Report)