N1m Fine Imposed on Financial Institutions for Suspicious Transactions Reporting Failing

A fine of N1m is directed by the Nigerian Government on any financial or non-financial institutions per day that fail to report any suspicious transactions to prevent money laundering. 

In accordance with the Money Laundering Bill, 2022, recently approved by the Nigerian President Muhammad Buhari, the Federal Government has imposed a fine of N1m daily on any financial or non-financial businesses failing to register any suspicious transaction for combating money laundering.

In section 7 of the Act, titled “Suspicious transaction reporting”, suspicious activity can consist of any dealings involving unreasonable frequency. In addition to that, any transaction inconsistent with the known business patterns or which involves the procedure of criminal activities comprising money laundering, terrorist financing etc. can be termed as a dubious transaction.

As mentioned in Section 7(10) of the Act “A financial institution or designated non-financial business and profession which fails to comply with the provisions of subsections (1) and (2) of this section commits an offense and is liable on conviction to a fine of N1m for each day during which the offense continues.”

In accordance with The Money Laundering Act 2022, the financial institutions and designated non-financial businesses need to report to the Special Control Unit, established to monitor financial transactions within and outside Nigeria, about any suspicious dealings within 24 hours submitted through a written report. 

It is also stated that the unit may acknowledge the receipt of any report while demanding further investigation accompanied by a notice delaying the business deal for a period of almost 72 hours. However, if no notice is submitted or the notice has expired then the transaction can be executed.

The Act has clarified that financial institutions may consist of banks, insurance firms, finance companies, money brokerage businesses and other associations. While non-financial institutions may include dealers in the automotive industry, casinos, hotels, real estate, and many other enterprises designated by the Minister of Trade and Investment.

Suggested Read: Philippines: Banks Reminded to Closely Monitor and Report Suspicious Transactions