Nigeria has developed an impressive anti-money laundering (AML) system in the recent years. This system of theirs is aiming to detect, prevent, and report illicit financial activities. In our blog post, we’ll talk about why money laundering is a serious challenge in Nigeria and how officials are fighting it.
What Are the Main AML Laws in Nigeria?
There are several AML laws implemented to prevent money laundering from occurring; some of these laws are as recent as 2022. The first law we’ll talk about is the Money Laudnering (Prohibition) Act of 2022. This act criminalizes illicit transactions as well as enforcing CDD for protection. For those not complying, this act is setting penalties that punishes these companies accordingly.
The EFCC Act, on the other hand, establishes the Economic and Financial Crimes Commission as the lead agency to look up to. This commission is responsible for the investigation and punishment of money laundering examples. The Terrorism (Prevention and Prohibition) Act of 2022 deals with the terrorism financing side of Nigeria, making sure that the requirements they set are enough to detect red flags in high-risk transactions.
Moreover, Nigeria takes the Financial Action Task Force (FATF)’s 40 recommendations as a guide to shape its own policies regarding AML.
Who Are the AML Regulatory Authorities in Nigeria?
We’ve mentioned the laws that shape the compliance environment, but who are responsible authorities for regulation of anti-money laundering in Nigeria? The first example we’ll give is the Economic and Financial Crimes Commission (EFCC) which is the main agency for intestigating financial crimes as enforced by the EFCC Act like we mentioned above. Another regulatory body that helps is the Nigerian Financial Intelligent Unit (NFIU); it help by dealing with collecting and analysing STRs, and it is a member of the Egmont Group of FIUs.
The Central Bank of Nigeria (CBN) is tasked with regulating AMP compliance in banks, microfinance institutions, and payment service providers. This includes the mandatory use of the Bank Vericification Number (BVN) to track transactions. Another regulatory body that helps is the Security and Exchange Commission (SEC); it ensures that companies comply with CDD and STR reporting requirements.
Our final example is the Special Control Unit against Money Laundering (SCUML). This unit is tasked with supervising non-financial institutions and DNFBPs like real estate agents, lawyers, casinos, and jewelers.
What Are the AML Requirements in Nigeria?
NFIU deals with money laundering, terrorist financing and other financial crimes by implementing newer and stricter rules, the newest guidelines were implemented in December, 2024; we’ll be sharing with you some of the requirements set forth by these guidelines. Customer Due Diligence (CDD) is the first requirement we’d like to mention. The tasks involving CDD are the collection of the customer’s BVN, the customer’s ID, and proof of address. After making sure the customer is safe, checking their transactions comes next. With transaction monitoring systems, businesses should identify suspicious and high value transactions to detect anomalies.
If you detect suspicious activities, your next step should be filing suspicious transaction reports (STRs) with the Nigerian Financial Intelligence Unit (NFIU) in the first 24 hours you discover the anomaly. Your company is also required to keep records for at least a minimum of five years. Risk assessments that ar edone regularly is great for identifying high-risk components that your company interacts with. Taking all these precautions means next to nothing if your employees are not equipped to dealth with cases of financial crime. Hence, employee training is great for ensuring employee confidence and expertise.
AML Obligations by Sector in Nigeria
Let’s talk more about the different requirements for AML companies of several sectors face. Banks and financial institutions should use BVN when registering customers and submit monthly AML reports to the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligent Unit (NFIU). New requirements set by the Nigerian government for the financial sector include the need to identify and verify customers, to put in place appropriate risk management mechanisms for PEPs, and to evaluate new business products and technologies for money laundering and terrorist financing risks. One other similar sector that should be careful is the fintech companies and mobile money operators; they should follow a KYC approach that acts according to transaction limits. They should also the CBN and the Nigeria Deposit Insurance Corporation (NDIC).
Virtual Asset Service Providers (VASPs) is another sector that benefits from complying with AML obligations. Cryptocurrency firms also fall under this category; these companies should register with the Securities and Exchange Commission (SEC) and the National Information Technology Development Agency (NITDA) and should pay extra attention to KYC procedures since it is a newer sector. Lastly, casinos, lawyers, real estate agents, and other designated non-financial businesses and professions (DNFBPs) should register with the Special Control Unit against Money Laundering (SCUML). Reporting cash transactions exceeding ₦5 million is essential.
FATF Grey List: Is Nigeria Compliant in 2025?
Nigeria has been grey-listed in 2023, and as of June 2025, it still remains on the FATF Grey List. Being grey listed means the country is subjected to increased monitoring since their AML and CFT systems are not fully efficient. Although Nigeria is still on the list, it has made significant progress. Nigeria has strengthened transparency of ultimate beneficial owners (UBOs). Another progress made is enhanced risk based supervision for financial institutions and DNFBPs. NFIU is working hard towards making financial intelligence widely used and taking better action against money laundering and terrorist financing cases. FATF has acknowledged that Nigeria has taken important steps towards compliance, but the strict rules are there to stay until Nigeria fully proves itself.
Major Money Laundering Cases in Nigeria (2010–2025)
We’ll now be examining money laundering cases that made lots of noise in the last 15 years in Nigeria. The first incident occurs in 2015; it is known as the $2 billion arms deal, or Dasukigate. An arms procurement deal that was done with the help of the former National Security Adviser Sambo Dasuki ended with the embezzlement of $2 billion. The interim report that revealed this deal also showed a spending of ₦643.8 billion over the budget and and another additional spending of $2.2 billion in the foreign currency component under the Goodluck Jonathan administration.
Another incident we can report about happened in 2017. This case involves Patience Jonathan, the former First Lady, whose wealth was questioned. This investigation led to the discovery of laundering around $15 million linked to several companies. To punish the responsible parties and promote anti-corruption, the results were assets being frozen and several legal battles.
Let’s move further to 2019, where ex-oil minister Diezani Alison-Madueke was involved in a scheme that involves shell companies and foreign properties. The estimated amount linked to this incident was around $115 million. Since leaving office in 2015, Alison-Madueke has been implicated in bribery, fraud, misuse of public funds and money laundering cases in Nigeria, Britain, Italy and the United States.
Since corruption and financial crime investigations are not stopping any time soon, let’s move onto the biggest laundering case that happened in 2020. A cyber fraud syndicate was involved with international laundering that used around ₦1.9 billion. The next year, Air Commodore Umar Mohammed was involved in a money laundering case of around $1.3 million using offshore channels, and hi mand his company was actually charged with these crimes.
In 2022, an influencer called Ramon Abbas, also known as Hushpuppi, was sentenced to 11 years of prison in the U.S. His role in cybercrime globally and laundering of around $24 million caused this sentencing. In 2023, the Niger Delta Development Commission (NDDC) was caught misusing their funds of around ₦81 billion. President Muhammadu Buhari has vowed that the federal government will take necessary measures to recover the allegedly misappropriated funds in the running of the Niger Delta Development Commission and this case resulted with the calls of accountability and justice being repeated.
In 2025, Afrobarometer’s survey revealed that a growing majority of Nigerians think corruption worsened over the past year, and only a few believe that people can report it to the authorities without fear of retaliation.
What Are the Penalties for AML Non-Compliance in Nigeria?
Now that we’ve shown you big cases regarding non-compliance, let’s talk more about how particular non-compliance activities will affect your company. Not reporting STRs when you’re faced with red flags and suspicious of particular transactions is ₦1M per every day you fail to report to authorities. The result of structuring, which is done to hide the origin of funds, is up to five years in prison. Not implementing strong CDD systems can lead to your business license getting revoked, an action you can’t undo. Finally, AML neglicence of every kind will end up with executives and directors facing liability like fines and imprisonment.
Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) in Nigeria
Customer Due Diligence (CDD) in Nigeria helps companies reach AML compliance by verifying customer identification using real documents like BVn and national identification number (NIN) coupled up with KYC information. But for higher risk customers, Enhanced Due Diligence (EDD) measures should be taken. EDD measures are generally about politically exposed persons (PEPs), non-governmental organizations (NGOs), and foreign entities since these are of higher risk. EDD is stricter with requirements like verifying the source of funds and checking UBOs continously to make sure there is no illicit financial activities occurring.
Ongoing Monitoring & Risk-Based Approach in Nigerian AML Framework
We’ve previously talked about laundering cases in Nigeria. Companies dividing their customers according to their risk levels after analysing their occupation, transaction patterns, and more to make the monitoring process easier is essential. Similar to EDD, this approach mainly involves PEPs and companies in more vulnerable sectors since they are of higher risk. Ongoing monitoring helps immensely since it is used to detect odd activites to then start investigations. If continuous controls don’t occur, you might end up with gaps in your compliance systems.
How Are Suspicious Transactions Reported in Nigeria?
After building the systems necessary for detecting suspicious activities, you should be reporting them to authorities. In Nigeria, there are three examples we can give. You should file STRs to the NFIU in the first 24 hours after detecting the odd activity. Reporting can also be done using the goAML platform which is an electronic portal by the UNODC; this site is used by more than 15000 users in the country. Next to these, companies are required to submit Currency Transaction Reports (CTRs) for transaction involving cash over ₦5 million for individuals and ₦10 million for companies.
AML Developments in Nigeria (2024–2025)
As we’ve mentioned before Nigeria being in the FATF’s grey list has resulted in the country implementing AML developments in recent years. Nigeria is now a part of the FATF Digital Transformation Roadmap which helps with implementing new technologies to improve data analytics and transaction monitoring. The Central Bank of Nigeria has also taken actions. The CBN enhanced its regulatory sandbox that better supervises fintechs and digital payment providers to ensure AML compliance.
SCUML has implemented new onboarding reforms to watch out DNFBPs more closely. Nigeria improved its international partnerships by collaborating with bodies like GIABA, which is the West African AML watchdog, and INTERPOL, to improve global information sharing and conducting investigations together.
How Sanction Scanner Supports AML Compliance in Nigeria
We at Sanction Scanner can help you achieve AML compliance in Nigeria by screening Nigerian PEPs and watchlist in real time to make sure you don’t miss any high-risk company or individual. We also provide transaction monitoring that is also Naira-specific. Another feature our Sanction Scanner team provides is audit reporting that makes sure your reports are readily waiting for goAML. Sanction Scanner also helps you reach compliance in a safe and efficient way by having API tools for banks, fintechs, and crypto firms.
FAQ's Blog Post
Nigeria’s primary AML law is the Money Laundering (Prevention and Prohibition) Act, 2022, which replaces earlier legislation and aligns with FATF recommendations.
The Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU) are the main AML regulators.
Yes, financial institutions must file Suspicious Transaction Reports (STRs) with the NFIU without tipping off the customer.
Cash transactions above ₦5 million for individuals and ₦10 million for corporate entities must be reported.
Yes, while crypto trading is restricted in banking, VASPs are increasingly subject to AML/CFT obligations.
Nigeria is working to improve compliance but has been under FATF and GIABA monitoring due to strategic AML deficiencies.
Yes, lawyers, accountants, casinos, and real estate agents must follow AML compliance rules.
Penalties can include hefty fines, license suspension, or imprisonment depending on the severity of the violation.
