Understanding Nigeria's 2024 AML/CFT/CPF Regulations for Designated Non-Financial Businesses and Professions

EFCC/SCUML AML/CFT/CPF Regulations for DNFBPs, 2022, have been officially repealed. In a significant move to strengthen Nigeria’s financial integrity, the Economic and Financial Crimes Commission (EFCC) has introduced new regulations focused on Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) for Designated Non-Financial Businesses and Professions (DNFBPs). These new rules, published in the 2024 edition of the Federal Republic of Nigeria Official Gazette, aim to improve compliance, reduce financial crimes, and ensure that DNFBPs adhere to global AML/CFT standards.

What Are DNFBPs?

DNFBPs include businesses and professionals that, although not part of the traditional financial sector, are vulnerable to money laundering and terrorism financing risks. These include:

1. Real estate agents and estate developers
2. Dealers in precious stones and metals
3. Legal practitioners and accountants
4. Trust and company service providers
5. Hospitality businesses
6. Lottery and gaming operators
7. Automotive dealers

Under the new EFCC regulations, these entities must comply with stringent AML, CFT, and CPF measures to mitigate financial crime risks effectively.

Key Provisions of the 2024 AML/CFT/CPF Regulations

Compliance Obligations - DNFBPs must establish robust AML, CFT, and CPF compliance programs, including:

1. Internal policies and procedures for money laundering risk management.
2. Appointment of a Compliance Officer responsible for implementing AML/CFT measures.
3. Employee training to detect and prevent suspicious transactions.
4. Independent testing and audits to ensure regulatory adherence.

Customer Due Diligence (CDD) - To prevent illicit transactions, DNFBPs must conduct due diligence before engaging in business relationships. This includes:

1. Identifying and verifying the identities of customers and beneficial owners.
2. Conducting enhanced due diligence on high-risk customers, such as politically exposed persons (PEPs).
3. Applying risk-based measures to transactions based on the level of potential illicit activity.

Mandatory Reporting Requirements - The new regulations mandate DNFBPs to report certain transactions, including:

1. Suspicious Transaction Reports (STRs): Any transaction that appears suspicious or inconsistent with a customer’s profile must be reported to the Nigerian Financial Intelligence Unit (NFIU).
2. Currency Transaction Reports (CTRs): Cash transactions exceeding NGN 5 million (individuals) or NGN 10 million (corporate entities) must be reported to the Special Control Unit against Money Laundering (SCUML) within seven days.
3. Cash-Based Transaction Reports (CBTRs): DNFBPs must submit detailed reports on large cash transactions.

Sanctions for Non-Compliance - Failure to comply with these regulations will attract severe penalties, including:

1. Administrative sanctions by SCUML.
2. Revocation or suspension of business licenses.
3. Possible criminal prosecution for involvement in financial crimes.

The Role of SCUML in AML/CFT Supervision

The Special Control Unit against Money Laundering (SCUML) plays a crucial role in enforcing compliance among DNFBPs. SCUML is responsible for:

1. Registering and certifying DNFBPs.
2. Conducting on-site and off-site inspections.
3. Receiving transaction reports and analyzing potential financial crime risks.
4. Recommending further actions or sanctions for non-compliant businesses.

Why These Regulations Matter

With increasing global scrutiny on financial crime, Nigeria’s enhanced AML/CFT/CPF regulations align with international standards set by the Financial Action Task Force (FATF). Strengthening the compliance framework for DNFBPs will:

1. Reduce the risk of money laundering and terrorism financing.
2. Improve Nigeria’s reputation in the global financial community.
3. Foster a more transparent and secure business environment.

Conclusion

The 2024 EFCC AML/CFT/CPF regulations mark a major step in safeguarding Nigeria’s economy from financial crimes. DNFBPs must take proactive steps to comply with these rules, ensuring that they conduct thorough customer due diligence, maintain accurate records, and report suspicious transactions promptly. By adhering to these regulations, businesses not only avoid legal repercussions but also contribute to a more transparent and secure financial system.

Reference;

Economic and Financial Crimes Commission (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction for Designated Non Financial Businesses and Professions, and Other Related Matters) Regulations, 2024:E:\ADEX\Regulations\REG KK\EFCC