April 2015
An Overview of the Money Laundering (Prohibition) Act 2011
In a bid to install and improve on an anti-money laundering regime in Nigeria and fight the financing of terrorism, the Money Laundering (Prohibition) Act 2011 (“the 2011 Act”) was enacted. This Act expanded the scope of the Money Laundering (Prohibition) Act 2004 (“the 2004 Act”)1 by not only targeting Financial Institutions involved in cash transactions, but also Designated Non-Financial Institutions (“DNFIs”) involved in cash transactions. Such DNFIs have an obligation under section 5 of the 2011 Act to identify their customers and report cash transactions with a customer that exceeds US$1000 to the Federal Ministry of Commerce (now Federal Ministry of Trade and Investment), which in turn sends the report to the Economic and Financial Crimes Commission. In section 25 of the 2011 Act, legal practitioners are included in the definition of a DNFI.
The Failure of a DNFI to identify their customers as prescribed by the Act, or report such cash transactions, within 7 days from when the transaction took place, amounts to an offence attracting a fine of ₦250,000 for each day of default; or suspension, revocation or withdrawal of the defaulting party’s licence by the appropriate licensing authority.
Since legal practitioners have been included in the definition of a DNFI, the reporting obligation imposed on them, with the attendant sanctions for default, have been argued in the case of the Nigerian Bar Association v. Attorney General of the Federation & Anor (“the NBA Case”)2 to contravene and conflict with section 37 of the Nigerian Constitution, section 192 of the Evidence Act 2011 and the Legal Practitioner’s Act3.
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