AN ASSESSMENT OF THE ROLE OF THE SPECIAL CONTROL UNIT AGAINST MONEY LAUNDERING (SCUML) IN COUNTERING MONEY LAUNDERING AND TERRORISM FINANCING IN NIGERIA ABIODUN ADEBANJO (DOP)

Аннотация

INTRODUCTION cause to society. FATF was formed by the G-7 in The problem of Money Laundering and Financing Paris in 1989. It however became more concerned of Terrorism, led to the development of Anti-Money about terrorism financing after the September 11, Laundering and Countering of Terrorism Financing 2001 terrorist attack on the United States (9/11) (AML and CTF) regulations in the world. With the by al-Qaeda. Money laundering results from the evolution of the threats posed by Weapons of Mass generation of money from illicit sources. Persons Destruction (WMD), regulations were developed who generate money from illicit sources like drug around the prohibitions of Non-Proliferation of trafficking, illegal oil bunkering, smuggling of WMD financing. These regulations came in the goods, etc. would seek to launder such proceed into form of Recommendations and Special Regulations legitimate ventures. Monies derived from such developed by the Financial Action Task Force ventures are also often used to finance terrorism (FATF). FATF is the global money laundering (ML) (United Nations Office on Drug and Crime.2009). and terrorist financing (TF) watchdog. It sets international standards that aim to prevent these After 9/11, the international community made the illegal activities that promotes and the harm they fight against money laundering and the financing of https://www.theamericanjournals.com/index.php/tajpslc 86 THE USA JOURNALS THE AMERICAN JOURNAL OF APPLIED SCIENCES (ISSN – 2689-0992) VOLUME 06 ISSUE06 terrorism a priority. International Financial Nigeria in 2002 as one of the Non-Cooperative Institutions (IFIs) become more concerned about Countries and Territories (NCCTs) the possible consequences of money laundering (www.efcc,gov,ng). Section 2 of the EFCC and the financing of terrorism on nations all over Establishment Act (2004) designated the EFCC as the world. These include risks to the soundness and the Nigerian Financial Intelligence. The function stability of financial institutions and financial was removed from the EFCC when the NFIU Act systems, increased volatility of international was enacted in 2018, making it an independent capital flows, and a dampening effect on foreign agency from the EFCC. The Special Control Unit direct investment. The United Nations Security against Money Laundering (SCUML) was Council passed a number of Resolutions against established by the Federal Government in terrorism financing. One very prominent among September 2005 in compliance with the provisions the several was Resolution 1373 of September, of the then Money Laundering (Prohibition) Act, 28th 2001 which called on member states to: 2004 which was subsequently repealed and “Prevent and suppress the financing of terrorist amended to Money Laundering(Prohibition) Act acts and refrain from providing any form of 2011(as amended). The most recent law from support, active or passive, to entities or persons which SCUML derived its power and mandate is the involved in terrorist acts” (United Nations Security Money Laundering Prevention and Prohibition Act, Council 4385th Meeting). 2022. This was a requirement which brought Nigeria in compliance with Recommendations 18 The magnitude of the problem led all United and 23 of FATF. The Unit by the current law is a Nations (UN) to encourage countries to sign up to department in the EFCC (Money Laundering Anti-Money Laundering and Counter Terrorism (Prevention and Prohibition) Act, 2022). Financing (AML/CTF) standards. One of the key elements of AML/CFT regimes is the requirement Statement of the Problem for Financial Institutions (FIs) and Designated Upon its establishment in 2003, the EFCC was Non-Financial Businesses and Professions (DNFBs) designated Nigeria’s Financial Intelligence Unit to report transactions they deem suspicious of (FIU). By 2005, SCUML was created by the Federal being related to criminal or terrorist activity to Ministry of Commerce and Industry and the EFCC specialised Units of government. As a result of to regulate DNFIBPs in Nigeria. According to the confidentiality traditionally attached to financial FATF, FIUs serve as national centers for the receipt transactions and because reporting entities (FIs and analysis of suspicious transaction reports and and DNFBPs) do not always have the means to relevant money laundering information, associated substantiate their suspicion, it proves difficult to predicate offences, and terrorist financing. The report it directly to the authorities in charge of Egmont Group which is a group of FIUs across the enforcing criminal laws. It therefore became globe who have committed to sharing financial necessary for governments to establish specialised intelligence, stated further that FIUs are to obtain agencies saddled with this task. This heralded the additional information from reporting entities and need to establish Financial Intelligence Unit (FIUs) that all FIUs all over the world must have timely (International