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Nigerian Parliament Strengthens AML/CTF Laws for Real Estate Industry

Richard Marley
January 12, 2022
4 minutes read
2120

Nigerian real estate regulatory authority to mandate businesses to comply with AML/CTF compliance to curb financial crimes.

Nigerian Parliamentary Members are expected to initiate talks on the crucial aspects of the bill that aims to assure that the real estate industry must comply with the Money Laundering Prohibition Act, and Nigeria Financial Intelligence Unit (NFIU) Act as well as stay put with the counter-terrorism financing regulations.

The newly proposed bill provides insights for establishing the Real Estate Regulatory Council of Nigeria as a self-funding institution. The organization aimed to provide a robust, effective, and transparent framework for real estate businesses, and impose necessary standards for curbing money laundering and other financial crimes from the country. However, the Senate passed this bill on November 17, 2021, and was delivered to Parliament House for consensus.

The bill comes up with several objectives; regulating the Nigerian real estate industry by standardizing conduct of transactions, increasing transparency, implementing international standards to flourish businesses, protecting the rights of all stakeholders, and deterring the risk of financial crimes. In addition to this, it also seeks to assure that the businesses work according to the National Building Code in Nigeria; to develop a sustainable playing field to promote the country as a secured investment destination at the global level.

Clause 4 of the law states that the Real Estate Development Association of Nigeria and Council (REDAN) will regulate the real estate businesses development in the country. Promote sustainable development and strategic collaboration with investors in the industry to build housing programs. The government shall work with the private firms to overcome the housing deficit in the country and secure the industry’s interest as well as stakeholders’ funds.

The Council is also all set to provide licenses to the Nigerian real estate business under REDAN guidelines. These include renewal of the license on a yearly basis, payment and fee requirements should be fulfilled, the activity records must be maintained and updated to meet regulatory standards, monitoring and investigating the progress of the real estate projects.

Additionally, the Council is also determined to make standards and codes for conduct for the real estate industry, including sanctions and hefty fines for violating the provisions of this bill.

PART VI, Clause 30 of the bill also provides that: “A developer shall not accept a sum more than 5% of the cost of the apartment, plot, or building, as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale/lease with the person.”

Clause 38 of the bill also stipulates that: “If a developer commits, a financial crime in relation to the Council under this Bill, the developer shall be liable on conviction to the penalties prescribed under the Act of the National Assembly or law regulating financial crimes in Nigeria. If an investor commits a financial crime in relation to the duties of an investor under this Bill, the investor shall be liable to the penalties prescribed under the Act of the National Assembly or law regulating financial crimes in Nigeria.”

“A developer who knowingly gives false information to the Council commits an offense and is liable on conviction to a fine of N50 million and shall be heard in a Fast-Track Court. A developer who willfully fails to comply with any order or direction of the Council under this Bill may have his license revoked temporarily or permanently as the Council determines. An allottee that willfully fails to comply with any order, decision, or direction of the Council shall be liable to a fine as may be determined by the Council. A developer who deals in the business of real estate development in Nigeria that: fails to register and be licensed in accordance with the provisions of this Bill commits an offense and is liable on conviction to a fine of not less than N20 million to be garnisheed from the Developer’s Bank Account(s) by application to the High Court,” according to Clause 38.

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Danish Gambling Operator Reports Tipwin to the Police for AML Failings
Then danish gambling operator Spillemyndigheden has reported Tipwin to the police for violating the Danish Money Laundering act

According to the sources, Spillemyndigheden, the government office based in Odense, Denmark, has reported to the police that the business has failed to create risk assessments of retail bets with a lack of written policies on its retail offerings.

It is also worth mentioning that the operator also lacks complete business procedures and controls for the offerings based on land or in regards to money laundering until 25 May 2022.

In the official statement of the regulator to the police, it stated all the shortcomings of Tipwin in compliance with the anti-money laundering standards. It stated: “Spillemyndigheden notes that the rules on risk assessment, policies and business procedures are absolutely fundamental in the Money Laundering Act. By failing to prepare a risk assessment, Tipwin has not had a useful tool that has provided an overview and understanding of where and to what extent Tipwin is exposed to money laundering or terrorist financing, and what measures are in place are necessary to mitigate the risks involved.”

This clearly states that the german based gambling operator, Tipwin is exposed to the illicit crimes of money laundering and terrorist financing and has failed to comply with the AML regulations. The Danish regulator also focused on the lack of preparation from the operator on assessments of risks which are fundamental components of the anti-money laundering act.

Spillemyndigheden also added: “Preparing a risk assessment of the company’s business model is a very fundamental means of limiting the risk of money laundering. Tipwin has thus also not had policies and operational procedures that stem from the risk assessment. By failing to prepare a risk assessment, the Gambling Authority has therefore handed over the case to the police investigation.”

The authority also launched an injunction on the breach of rules and procedures in regard to the online casino and betting operations. With the main emphasis on money laundering, the regulator released a statement last month which reminded businesses in the industry of the obligations. It mentioned the regulations most firms are complied with, which are in order to prohibit the financial interactions with individuals, groups, legal bodies or countries.

In addition, Spillemyndigheden issued a 3 months deadline to Tipwin to sort out the situation.

Suggested Read: Danish Gaming Regulator Sanctions Unibet Over AML Violations

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