Nigeria Country Financial Crime Dashboard 2023 by FCN

Financial Crime News is publishing its first Country Financial Crime Dashboard for Nigeria. See: HERE: FCN Nigeria Dec 2023 PBLSD

According to the FATF MER published in 2021, “Nigeria has undertaken positive steps to increase its risk understanding, and authorities demonstrated a broad general understanding of the types of ML risks facing the country, both through its AML/CFT National Risk Assessment and other related studies. Although Nigeria recognises the wide range of both ML and TF threats and vulnerabilities it faces, the depth and sophistication of its understandings of key ML risks, including of corruption and fraud, legal persons (including free zone enterprises (FZEs)) and politically exposed persons (PEPs), are underdeveloped considering their complexity, materiality and scope. Nigeria’s understanding of TF risks is significant, but could be improved in material respects, e.g., with regards to cross-border flows and formal financial sector vulnerabilities” – FATF 2021 MER

FCN Country Risk Scores & Ratings: Nigeria is rated 71/100 and having a Moderate to High Threat level, with a “Low – Moderate” Response at 67/100, resulting in an overall Risk of Moderate – High at 69/100, using the FCN Methodology. Whilst there is significant room for improvement the rating is better for example than that for FATF Members, Turkey (80), Russia (78) & China (77), in between African Peers of Kenya (63) & South Africa (63), and a long way behind those leading in Africa, namely Mauritius (26), followed by the Seychelles (33).

Financial Crime Threats: Nigeria published its first NRA in 2017, it reported the most prevalent predicate offences then as “High” risk being (i) bribery and corruption; (ii) pipeline vandalism and illegal oil bunkering (iii) advance fee fraud. “Medium” threats for fraud and forgery, human smuggling and trafficking, drug trafficking, and arms trafficking – NRA 2017. This was then followed by an updated NRA in 2022, which rated ML threats as “Very High” Risk being Bribery & Corruption, Illicit Trafficking in Narcotics and Fraud, and “High” Risk as participation in an Organised Criminal Group, Trafficking in persons, Smuggling, Kidnapping, Environmental Crimes, Illicit Arms Trafficking, Theft and Robbery, Forgery, Tax Crimes & Terrorist Financing. – NRA AML 2022

Organised Crime: Nigeria is ranked 6th highest globally (out of 193 Countries) for criminality in the Organised Crime Index updated in 2023, behind Myanmar, Colombia, Mexico, Paraguay, & DRC and one place ahead of South Africa with Kenya in 16th place. See OCI 2023 

Terrorism & TF: A number of terror groups operate in Nigeria, including Boko Haram, Islamic State in West Africa Province (ISWAP), Ansaru, IMN, IPOB, Yan Bindiga and Yan Ta’adda. While all the terrorist groups have been prescribed by Nigeria, Boko Haram and ISWAP were designated as international terrorist groups by the UN Security Council. Between 2010 and 2021 Nigeria suffered more than 36,000 deaths from terrorist attacks and 385 in 2022, making it the country with the 8th highest number of deaths that year. Many of the terror groups specialised in criminal activities for finances. These included control of markets in occupied areas, cattle rustling, rent for land etc. Based on the 2022 NPO TF Risk Assessment, carried out by the Special Control Unit Against Money Laundering (SCUML), the NPO sector was rated as “Medium High” for terrorist financing risk in relation to NPO operations in Nigeria. 

Sector Vulnerabilities: ML vulnerabilities assessed with a “Very High” inherent risk rating for the Banking and Real Estate sectors. “High” risk sectors were identified as, Virtual Assets Payment Service Providers (VASPs), International Money Transfer Operators (IMTOs), Bureau De Change (BDC) operators, Payment Service Providers (PSPs), Car Dealers, Dealers in Precious Stones and Metals, Casinos/Lottery, Trusts & Company Service Providers (TCSPs), and the Extractive sectors. – NRA AML 2022

Responses: The last Mutual Evaluation Report relating to the implementation of AML/CTF standards in Nigeria was undertaken in 2021. According to that Evaluation, Nigeria was deemed Compliant for 7 and Largely Compliant for 14 of the FATF 40 Recommendations. It was assessed as Moderately Effective (ME) for just 2 Immediate Outcomes (IO3 Supervision) & IO6 Financial Intelligence), with the remaining 9 rated at Low Effectiveness (LE).

According to FATF, which added Nigeria to its so called Grey List, “since February 2023, when Nigeria made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime, Nigeria has taken steps towards improving its AML/CFT regime, including by completing its residual ML/TF risk assessment. Nigeria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) disseminating its residual ML/TF risk assessment and updating its national AML/CFT strategy to ensure alignment with other national strategies relevant to high-risk predicate offences; (2) enhancing formal and informal international cooperation in line with ML/TF risks; (3) improving AML/CFT risk-based supervision of FIs and DNFBPs and enhancing implementation of preventive measures for high-risk sectors; (4) ensuring that competent authorities have timely access to accurate and up-to-date beneficial ownership (BO) information on legal persons and applying sanctions for breaches of BO obligations; (5) demonstrating an increase in the dissemination of financial intelligence by the FIU and its use by LEAs; (6) demonstrating a sustained increase in ML investigations and prosecutions in line with ML risks; (7) proactively detecting violations of currency declaration obligations and apply appropriate sanctions and maintaining comprehensive data on frozen, seized, confiscated, and disposed assets; (8) demonstrating sustained increase in investigations and prosecutions of different types of TF activities in line with risk and enhancing interagency cooperation on TF investigations; and (9) conducting risk-based and targeted outreach to NPOs at risk of TF abuse and implementing risk-based monitoring for the subset of NPOs at risk of TF abuse without disrupting or discouraging legitimate NPO activities”.

Key Outcomes Performance Data for Nigeria:

FIU Staffing: 72 (2018)

SARs Reported: 7,443 (0 by DNFBPs) in 2019 (down from 10,537 in 2018)

SAR Conversion Rate: 382 FIU reports disseminated (2019) 

PPP: None 

NRA: Yes latest ML/TF/PF 2022 update from 2016

ML Convictions: 57 ML Investigations, 24 Prosecutions & 9 Convictions in 2019

Human Trafficking Convictions: 13 in 2021, down from 36 in 2020.

Foreign Bribery Convictions: None (2018-2021)

Assets Seized: US$141,000 seized in 2019 (0.00003%) of estimated financial crime proceeds @ 3.6% of 2022 GDP).

Assets Confiscated: US$8.7M recovered in 2019 (0.002%) of estimated financial crime proceeds @ 3.6% of 2022 GDP).

For the Nigeria Financial Crime Dashboard see below and HERE: FCN Nigeria Dec 2023 PBLSD

For the Short Form “Summary” Country Threat Assessment 2020 for Nigeria ClICK HERE: 

For the Long Form Nigeria Deep Dive 2020 Pbd 2 “Deep Dive” Country Threat Assessment for Nigeria 2020 CLICK HERE

These materials are owned and copyright of Metriqa Ltd/Financial Crime News and should not be used for commercial purposes without the consent of the Editor FCN

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