Nigerian AML law to impede money transfers

Nigerians engaged in money transfers abroad may soon face serious delays, after the Senate further reneged on a promise to pass the long overdue anti-money laundering bill.

After three inconclusive attempts to pass the Act, the Senate leadership, on Thursday, in an unusual twist in legislative procedure, set up a seven-member committee to overhaul the anti-money laundry bill, which was already supposed to be in its final stages.

The setting up of the ad-hoc review committee is the fourth in a series of delays that suggest that the senators are over-apprehensive about the provisions of the bill. The Money Laundering (Prohibition) Bill makes stern provisions that will outlaw most of the usual banking and cash transfer practices involving the movement of huge sums in Nigeria.

This is an executive bill meant to replace the 2004 version of the anti-money laundering bill, and which seeks to check terrorism financing and money laundering practices. The old version is said to lack the relevant provisions that will make it fully compliant with the recommendation of the Financial Action Task Force (FATF), established by the G7 Summit held in Paris in 1989.

The Task Force could impose heavy sanctions on inbound and outbound foreign transfers, if the bill is not passed in a timely fashion.

IAMTN: Although this is in relation to high value payments it has a knock on effect to remittances. This was evidenced by the 7 May 2010 circular from the Central Bank that said that remittances can only be sent to an account or can only be collected by someone who is vouched for by an account holder. If implemented fully this will make it harder for people to use formal channels.