Combating Money Laundering in Nigeria: An Appraisal of the Money Laundering Prohibition Act 2004

Abstract

One of the most pervasive economic crimes in Nigeria today is Money Laundering. Although relatively unknown in the country until the late 1980s, it is now a veritable companion of the corruption virus which has permeated every segment of the Nigerian society. By its very nature, money laundering is an offence that necessarily involves several persons and entities in its conception, planning, and execution.1 It has the capacity to distort and corrupt the economic system and inhibit the economic development efforts of states.2 It is in recognition of its adverse consequences on the national and international economy that a number of measures have been taken to combat the menace. At the international level, the OECD countries took the lead in engineering the establishment of Financial Action Task Force (FATF) which has been in the forefront of the measures against money laundering. The organization has not only succeeded in precipitating the taking of proactive measures to deal with this menace but also consistently made concrete suggestions on how national legislations dealing with this crime should be constructed. Indeed, it is in response to the prompting of such international institutions and agencies that several states have enacted laws specifically designed to deal with this offence. Nigeria first took positive action along this line in 1995 when she enacted the Money Laundering Act.3 However, it was soon realized that the decree had a number of loopholes and inadequacies which militated against its effectiveness. In the context of Nigeria, this is not surprising, because the usual pattern of legislation in the country hardly takes cognizance of all the circumstances before a law is passed. This problem was more apparent during the military regimes where decrees were rolled out after meetings of the military-dominated ruling councils without legislative debate.4 It was in recognition of these facts and the specific deficiencies identified that led to the enactment of the Money Laundering Prohibition Act 2004 by the present government. Although the Act makes a number of far-reaching provisions relating to money laundering in the country, it also raises a number of issues that require re-examination in the light of prevailing circumstances. It is intended in this paper to examine the provisions of this law to see how it has assisted in the fight against the menace in Nigeria. The inadequacies of the law will also be discussed and suggestions made in the concluding part of the paper on how to make the legislation more responsive to the quest for effective regulation of this crime.