The Conflict of the Doctrine of Confidentiality and Money Laundering Laws in Nigeria: An Evaluation of Banking Compliance

Abstract

The duty of banks to maintain secrecy and confidentiality of transactions with customers is not absolute. It is a mandatory requirement of the Money Laundering Prohibition regime in Nigeria for banks to report and disclose every suspicious transaction. What is dissatisfactory however, is that the consent of customers are not required for such disclosures. It is more worrisome to discover that the banks and other Regulators can suo motu, without an Order of Court stop customer’s transaction under the guise of suspicion. In all of these the banks enjoy immunity from claims for disclosure, but there is no remedy in the anti-money laundering regime for a customer whose transaction is unjustifiably disclosed. The MLPA, 2011 in an arbitrary manner intrudes customers’ privacy and confidentiality in financial transactions. The position of this paper is that every disclosure of bank/customer secret should be on the Order of a competent court. Also, Section 6(5) (a) of the MLPA, 2011 should be amended to include a requirement for a Court Order. It is also recommended that the description of suspicious activities in Section 6(1)(d) of the law to include a transaction inconsistent with the known transaction pattern of the account is too arbitrary.