In Q4 2024, the Nigerian Financial Intelligence Unit (“NFIU”) issued the Guidelines for the Identification, Verification, and Reporting of Suspicious Transactions Related to Money Laundering, Financing of Terrorism, and Proliferation of Weapons of Mass Destruction (ML/FT/PF) for Financial Institutions (the “Guidelines”).[1] Designed to enhance compliance and oversight, the Guidelines provide a structured framework to assist financial institutions[2] in identifying and filing Suspicious Transaction Reports (“STR”), thereby strengthening internal control measures.
Around the same time, the Economic and Financial Crimes Commission (the “EFCC”) released the Economic and Financial Crimes Commission (Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction for Designated Non-Financial Businesses and Professions, and Other Related Matters) Regulations, 2024 (the “New Regulations”)[3], which repealed the 2022 version (the “Old Regulations”).[4]
In this publication, we highlight key provisions introduced by both the Guidelines and the New Regulations, outlining their implications for individuals and businesses navigating Nigeria’s compliance landscape.
The Guidelines
We examine key provisions in the Guidelines in the paragraphs that follow.
1. Steps to Identifying a Suspicious Transaction: Under the Guidelines, a Reporting Entity (“RE”) must establish reasonable grounds for suspecting that a transaction is linked to money laundering, terrorism financing, or proliferation financing before filing an STR with the NFIU. To do so, the RE must: (i) screen and review transaction alerts; (ii) assess the facts and context of the transaction; (iii)identify red flags by linking Money Laundering/Terrorism Financing/Proliferation Financing indicators and; (iv) justify the suspicion by clearly explaining its findings in the STR. By following this approach, REs ensure that STRs are not just reactive filings but well-founded reports that contribute meaningfully to combating financial crime.
2. Period for Forming a Suspicion and Filing the Transaction as an STR: If a transaction appears suspicious based on the criteria outlined in section 7 (1) (a-e) of the Money Laundering Prevention and Prohibition Act, 2022 (“MLPPA”)[5] and 84(1) (a-c) of the Terrorism (Prevention and Prohibition) Act, 2022 (“TPPA”)[6], an RE is required to thoroughly review it within 72 hours. If a suspicion is confirmed, the RE must file an STR with the NFIU within 24 hours. Even if a transaction is reviewed but not found suspicious, the RE must keep a written record explaining why the transaction is deemed unsuspicious, in case of future investigations.
3. Required Documents for Filing an STR: In submitting the STR, the following documents must be a part of it, as part of the customer due diligence process when a customer opens an account:
(a) a copy of a valid identity document (e.g. international passport, National Identification Number slip);
(b) proof of address such as utility bill, visitation report, lease agreement, etc;
(c) business registration documents;
(d) copy of beneficial owner’s document (where applicable); and
(e) copy of the legal representative’s identity document (where applicable).
For transactions, the following documents must be included:
(a) transaction slips or receipts;
(b) bank statements or account activity logs;
(c) electronic payment records;
(d) account opening or closing records;
(e) fixed deposit account records/call deposits, treasury bills, bonds etc (if any);
(f) customer loan account records, including executed loan agreement and offer letters; and
(g) evidence of remittances by International Money Transfer Operators.
While the list covers essential documentation, it would benefit from an improved structure, clearer definitions, and better alignment with practical compliance processes. For example, under proof of address, the term "visitation report" is unclear – the concern being whether it refers to a physical inspection report by the RE, a site visit confirmation, or an official government-issued document.
[1] REF: STR-NFIU-2024-A0001 < https://www.nfiu.gov.ng/AdvisoryAndGuidance > accessed 05 February 2025
[2] Financial institutions include banks, body corporates, associations or group of persons, whether corporate or incorporate which carries on the business of investment and securities, virtual asset service providers, a discount house, insurance institution, debt factorisation and conversion firm, bureau de change, finance company, money brokerage firm whose principal business includes factoring, project financing, equipment leasing, debt administration, fund management, private ledger service, investment management, local purchase order financing, export finance, project consultancy, financial consultancy, pension funds management and such other business as the Central Bank or other appropriate regulatory authorities may designate.
[3] EFCC-AML-CFT-CPF Regulations, 2024 <https://scuml.org/wp-content/uploads/2024/09/EFCC-AML-CFT-CPF-REGULATIONS-2024pdf.pdf> accessed 05 February 2025
[4] EFCC-AML-CFT Regulations, 2022 <https://www.scuml.org/wp-content/uploads/2022/11/EFGGSCUML-Regulations-2022.pdf> accessed 05 February 2025.
[5] Per this provision, a transaction is deemed suspicious if it: (a) occurs with unjustifiable or unreasonable frequency (b) involves unusually complex or unjustified conditions; (c) lacks clear economic rationale or lawful purpose; (d) deviates from the customer’s established transaction pattern; or (e) is suspected by a financial institution or designated non-financial business or profession (DNFBP) to involve the proceeds of crime, money laundering, terrorist financing, or any other unlawful activity.
[6] This requires financial institutions and DNFBPs to report any suspicious transactions related to terrorism, terrorist financing, or proliferation financing to the NFIU within 24 hours of forming such suspicion. Upon receipt, the NFIU must immediately assess the report and forward it to the appropriate law enforcement or security agency if there are reasonable grounds to suspect that: (a) the funds, whether from legal or illegal sources, are intended for use in terrorist acts, terrorist financing, or proliferation financing; (b) the funds are proceeds of a crime linked to such activities; or ; (c) the transaction involves a person, entity, or organisation identified as a terrorist or terrorist group.
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