The document outlines strategies for improving anti-money laundering and countering the financing of terrorism (AML/CFT) compliance for financial institutions. It discusses the scale of money laundering and illicit financial flows globally and in Africa. It also explains key AML/CFT concepts like money laundering, terrorism financing, and the need for compliance. The document then reviews Nigeria's AML/CFT laws and regulations as well as recent developments. It stresses the importance of effective compliance programs and discusses challenges and strategies to strengthen programs, including risk-based approaches, enhanced due diligence, training, and regulatory cooperation.

1. Compliance Strategies for curtailing
AML-CFT

2. Outline
• set the tone-How big is the problem
• Why Combating ML/TF
• What is ML& TF
• AML/CFT compliance?
• Current developments in the AML/CFT Regulatory Regime
• Why the need for AML/CFT compliance by
Financial Institutions (FIs)
• Implementing AML/CFT compliance by FIs
• Why AML/CFT compliance by FIs must be
Effective
• The Role of CBN in AML/CFT regime
• Case Study
• Challenges of implementing AML/CFT
compliance by FIs
• Strategies in improving and designing an
effective AML/CFT compliance for FIs
https://www.youtube.com/watch?v=pJUmigm99ig

3. To set the tone…
2 - 5% of global GDP, or $800 billion - $2 trillion (IMF, 1998)
According to the Economic Development in Africa Report 2020 by the UN
Conference on Trade and Development (UNCTAD), Africa loses about US$88.6 billion,
3.7 per cent of its gross domestic product (GDP), annually in illicit financial flows.
The High-Level Panel on International Financial Accountability, Transparency and
Integrity for Achieving the 2030 Agenda (FACTI Panel) report released in February
2021 cautions that IFFs — from trade misinvoicing, tax abuse, cross-border
corruption, and transnational financial crime — drain resources from sustainable
development, as well as worsen inequalities, fuel instability, undermine governance,
and damage public trust.
The UN Office on Drugs and Crime (UNODC), in its Strategic Vision for Africa 2030
launched in February 2021, notes that illicit financial flows remain a key impediment
to Africa’s attainment of the 2030 Agenda and the African Union Agenda 2063.

4. To set the tone…
Global banks hit with US$5.6 billion in compliance fines in 2020
High-profile scandals and compliance failures in the US, Israel, Northern Europe and Germany have attracted the lion’s
share of penalties for non-compliance with anti-money laundering, know-your-customer and sanctions regulations in
the first half of the year (Fenergo 2020)
.
https://www.caymancompass.com/2020/08/25/global-banks-hit-with-us5-6-billion-in-
compliance-fines-in-2020/
Nigeria: CBN sanctions UBA, GT, Access, Fidelity banks for money laundering, others
Sep 24, 2019
….It was gathered that the apex bank sanctioned the banks for failure to comply with its Know-
Your-Customers guidelines and the anti-money laundering requirements….
http://www.businesstimesafrica.net/index.php/banking/item/5102-nigeria-cbn-sanctions-uba-gt-access-fidelity-
banks-for-money-laundering-others

5. What is Money Laundering ?
Why Criminals Launder Money
• To hide their wealth or revenues to evade taxes
• To avoid prosecution
• To become legitimate
ML is a process criminals use to try and hide the
ownership and true origin of the proceeds of their
criminal activity
According to Section 18(2) of the Money
Laundering (Prevention and Prohibition) Act
2022, money laundering includes
concealment, disguise, conversion, transfer
or control of any fund or property
intentionally with the knowledge that such
fund or property is or forms part of the
proceeds of an unlawful act.

6. Money Laundering Cycle
In reality money laundering cases may not have all three stages, some
stages could be combined, or several stages repeat several times.

7. What is Terrorism Financing
Terrorism
An act willfully performed with the intention of
furthering an ideology, whether political,
religious, racial, or ethnic, and which- may
seriously harm or damage a country or an
international organization; unduly compels a
government or an international organization to
perform or abstain from performing any act;
seriously intimidates a population.(Terrorism
Prohibition Act 2022)
Terrorism Financing is the voluntary mobilization
of funds or other material means for the purpose
of using them to commit acts of terrorism, or to
donate them to terrorists or terrorist
organizations,

8. Money Laundering Terrorism Financing
Why Criminals Launder Money
• To hide their wealth or revenues to
evade taxes
• To avoid prosecution
• To become legitimate
How criminals launder money
• Placement ,
• Layering and
• Integration
ML is a process criminals use to try and hide the
ownership and true origin of the proceeds of their
criminal activity
How terrorism financing takes place
• Fund Raising,
• Transfer and
• Use
Money laundering funds are from an illegal source. However, in terrorist
financing, funds may originate from either legal or illegal sources. The objective of
terrorist financing is not necessarily to conceal the source of the funds but to
conceal the activity funded.

9. AML/CFT Compliance simply means complying with
AML/CFT relevant Laws , Regulations and International
standards
AML/CFT compliance

10. AML/CFT - International Perspective
 The need to curb Money Laundering (ML) in response to organized criminal
activities involving major proceed generating crimes (To deprive criminals
from enjoying the proceeds of criminal activity)
 The need to curb Terrorism financing (TF) in response to global events like
the 9/11
AML/CFT – Domestic Perspective (Nigeria)
 To curb ML/TF in relation to illicit drug trade and public corruption
 Later on , Insurgency, Kidnapping ,Banditry , Oil Bunkering ,Bank Robberies
, Advanced Fee Fraud ,Ponzi Schemes, Human Trafficking , Wildlife
Trafficking and any other proceed generating crime in Nigeria.
Why the AML/CFT Regime?

11. AML/CFT Compliance Standards , Laws & Regulations
International Standard Setters
• Financial Action Task Force(FATF)
• established in 1989
• International standard setter for Anti-Money Laundering and combating the
financing of terrorism
• Formed by the G7 (Group of Nations)
• Established the 40 recommendations on AML/CFT
• A Policy Making body
• Objective is to set standard and promote effective implementation of legal
regulatory & operational measures for combating ML/TF
• Currently comprises 35 member jurisdictions and 2 regional organizations
• Nigeria seeking to be a member of the FATF, currently only South Africa is a sitting
member from Africa.

12. AML/CFT Compliance Standards , Laws & Regulations
• GIABA (Inter Governmental Action group Against Money
laundering in West Africa)
• Established by the 16 states of ECOWAS
• FATF Free style regional body(FSRB)
• Conducts Mutual Evaluation on its member states
• Nigeria is a member
• Provide capacity enhancement to member countries through
trainings and other awareness campaigns on AML/CFT

13. AML/CFT Compliance
Standards , Laws &
Regulations
Domestic Laws and Regulations
• Money Laundering Prohibition Act 2011 (amended)
• Terrorism Prevention Act 2012 (Amended)
• CBN AML/CFT regulations 2013
• CBN risk-based supervision framework 2011
• CBN AML administrative sanctions 2018
Others
• EFCC act 2004
• NFIU Act 2018
• NDLEA Act
• CBN Act 2007
• Much More…….

14. Money Laundering Prohibition
Act 2011(Amended)
Some selected relevant sections for
financial institutions
• S3 : identification of customers
• S6 : suspicious transaction reporting
• S7 : preservation of records
• S9 : internal procedures , policies and
controls
• S10 : mandatory disclosure by
financial institution
• S11 : prohibition of numbered or
anonymous accounts in fictitious
names and shell banks
• S12 : liability of directors , employees
of FIs , DNFBPs , etc.

15. Current developments in the AML/CFT Regulatory Regime
Before 2022, AML/CFT in Nigeria was regulated through the:
1. Money Laundering (Prohibition) Act 2011 and
2. Terrorism (Prevention) Act 2011
These acts were supported by several other regulations discuss
above
However, President Muhammadu Buhari, enacted the following three
laws with an effective date of 12 May 2022 to implement the FATF
recommendations on AML/CFT and address the deficiencies found in
Nigeria's 2nd round of Mutual Evaluation. As assessed by the Inter-
Governmental Action Group against Money Laundering in West
Africa on compliance with the FATF global standards:
1. The Money Laundering (Prevention and Prohibition) Act (MLA),
2022;
2. The Terrorism (Prevention and Prohibition) Act, (TPPA) 2022;

16. Current developments in the AML/CFT Regulatory
Regime.....,
Some of the noteworthy modifications introduced by the MLA 2022 are
as follows:
Statutory backing for the Operation of the Special Control Unit
against Money Laundering (SCUML).
The MLA 2022 now provides statutory backing for the independent existence
and operation of SCUML as a department under the Economic and Financial
Crimes Commission (EFCC) and charges it with the responsibility of supervising
DNFBP in their compliance with the Act, relevant laws and applicable
regulations.
Change in line of reporting
The MLA 2022 has changed the line of reporting for financial transactions over
the threshold of ₦5Mfor individuals and ₦10M for corporate bodies. While
Designated Non-Financial Business and Professions (DNFBP) are required to
disclose such obligations to SCUML, Financial Institutions (FI) are required to
report such transactions to the Nigerian Financial Intelligence Unit (NFIU).

17. Current developments in the AML/CFT Regulatory
Regime.....,
Inclusion of New Categories of Businesses as Designated Non-
Financial Business and Profession (DNBP)
Under the repealed Act, certain categories of business entities were defined as Designated
Non-Financial Institution (DNFI). However, the MLA 2022 changes the nomenclature of
DNFI to DNBP and notably expands the categories of businesses that qualify as DNBP to
include:businesses involved in the hospitality industry,mechanized farming equipment,
farming equipment and machineries,precious metals and precious stones,real estate,
estate developers, estate agents and brokers,notaries,mortgage brokers,practitioners of
mechanized farming,trust and public service providers, and pools betting.
Enhanced KYC Requirements
The Act also provides for enhanced KYC requirements for foreign politically exposed
persons and mandates FIs and DNFBPs to take reasonable measures to ensure that any
person purporting to act on behalf of a customer is so authorised, identified, and verified.

18. Current developments in the AML/CFT Regulatory Regime......,
Transaction Splitting
The MLA now prohibits persons from conducting two or more transactions separately with
one or more FIs or DNFBP with the intent to either avoid the duty to report a transaction
that should be reported, or breach the duty to disclose information by any other means.
Pre-Launch Assessment of NewProducts,Technologies, and
Business Practices for MLA/CFT
Every FI and DNBP is obligated, to carry out pre-launch assessment of any new products,
and business practices for money laundering and terrorism financing risks that may arise
therefrom and take appropriate measures to manage and mitigate the risks. Where new
technologies or delivery mechanisms are being deployed for existing products or business
practices, such new technologies must also be assessed for money laundering and
terrorism risks in accordance with the requirement of its regulator – where applicable

19. Why AML/CFT compliance
by FIs must be Effective
• To protect their organization from being used as a
conduit for ML/TF and PF
• To avoid Reputational, Operational, Legal and
Concentration Risks
• To safeguard the global financial system
Others….
• Curb Money laundering
• Financial crimes (Predicate Offenses to Money
Laundering)
• Banditry
• Embezzlement of public funds
• Kidnapping
• Illegal oil bunkering
• Help prevent other serious organized crimes
• Curb Terrorism financing
• Prevent terrorist attacks

20. Implementing AML/CFT compliance Program
FATF Recommendations;
• a money laundering deterrence
program ,that establishes
minimum standards and
principles of control.
• adequate policies, procedures
and controls to deter/prevent the
misuse of their institutions for
money laundering/terrorism
financing
Compliance Program
An anti-money laundering
program is a set of regulations
and procedures that financial
institutions “follow to prevent
and detect money laundering or
terrorist financing activities”
“Provides a clear statement of
intent in AML/CFT compliance to
regulators and law enforcement
agencies”

21. Compliance
program
Basic key elements of an
AML/CFT Compliance
Program:
• A system of internal
policies, procedures
and controls
• A designated
compliance officer
• An ongoing employee
training program
• An independent audit
function to test the
program
The primary goal of an AML/CFT compliance
program will be:
• To protect the organization against Money
Laundering /Terrorism Financing and PWMD
• To ensure the institutions full compliance with
all relevant laws and regulations within and in
all areas of its operations
• To ensure that the institution follows a risk-
based approach to combatting ML/TF and
PWMD.
• To show the seriousness of our financial
institutions in the global fight against ML/TF
and PF , in compliance with international
standards ready for FATF mutual evaluation
exercises

22. Other Key Elements Policies and Procedures …
• A Statement of compliance with AML/CFT Policy
• Customer identification and Customer due diligence policies and
procedures
• Screening of transactions and customers against sanctions and black lists
• The Monitoring for suspicious transactions/Activities
• The Identification of Suspicious activities
• Reporting of suspicious transactions and activities
• Cooperation with all relevant authorities on AML/CFT inquiries,
investigations and other relevant issues
• Adoption of risk management practices and risked based approach
• Record keeping

23. The Role of CBN in AML/CFT regime
• As a line of defense in ensuring AML/CFT regime of
the country is safe guarded
• Responsibility in protecting the integrity of the
financial system against Money Laundering.
Terrorism financing , proliferation financing and other
illicit financial flows within the housing sector
• To ensure strict compliance with both international
standards and domestic laws and regulations in
AML/CFT
 Implementing a complinace program which should
include KYC, CDD and EDD policies and
implementation

24. Discussion
• What products and services does OFISD offer?
• How do you conduct due diligence in respect of
your products and services?

25. Some Key issues to look at in considering how to Strengthen AML/CFT
compliance
Do we appreciate and understand
the AML/CFT regime?
How adequate are our AML/CFT
laws and regulations in
addressing both international and
domestic AML/CFT concerns ?
How committed are the FIs to
AML/CFT compliance?
If committed how are the FIs
implementing AML/CFT
compliance laws and regulations
How effective is the
implementation of AML/CFT
compliance programs by FIs
How committed and effective are
regulators in enforcement
measures of AML/CFT compliance
of FIs
What can be done to improve or
strengthen AML/CFT compliance
of Fis?

26. Suggested Strategies for Improving and strengthening
AML/CFT compliance (FIs)
• Improved management commitment to AML/CFT , should look at it as a national service and a service to
humanity
• Adopting a risk based approach to AML/CFT compliance , applying continuous risk assessment of individual
and corporate customers ,products, services , geographical location of operations (not just jurisdiction wise
but even domestically)
• Improved KYC , even if it means using third party experts / consultants
• Improved AML/CFT audit , not rushed audits to meet RBS examination of the regulators and international
assessors , AML/CFT audits should be more frequent
• Training and retraining of all categories of staff in AML/CFT
• Understanding the focus of the international committee , so as to know how to synergize with our domestic
needs
• Improved cooperation with the FIU, law enforcement , Regulators and other stakeholders
• Highly skilled compliance dedicated unit responsible for transaction monitoring and suspicious transaction
investigations (should also be conversant in sector based transactions and other current trends that may
pose a threat to the AML/CFT regime like virtual currencies, virtual assets and so on)
• Improved monitoring of staff to curb insider threats especially tip offs to customers

27. Challenges in AML/CFT Compliance of FIs
• Commitment of senior management AML/CFT
compliance
• Cost of compliance to financial institutions
• Human resources
• Infrastructure requirements
• Skilled personnel
Others
• Corruption
• Sabotage
• Insider threats and Insider Dealings and Tip off
• Over reliance on transaction monitoring tools for
suspicious transaction detection

28. Materials used for this presentation
• FATF recommendations 2012 (amended)
• MLPA 2011 amended
• AML CBN manuals and circulars
• NFIU act 2018
• EFCC establishment act 2004
• Open source research.
• Others

29. Thank you for Listening
Questions
Comments