Apr.30, 2010, 02:46 AM

Ahead of the June deadline for compliance with international standards in the war against terrorism and money laundering, the Senate on Thursday, passed, for second reading, the amendment of the Money Laundering Act.

The Money Laundering (amendment) Act augments the Anti Terrorism bill that was read for the second time the previous day. Both bills have also passed through second reading on the floor of the House of Representatives.

When passed into law, both bills will make Nigeria fully compliant with the anti-money laundering and combating the financing of terrorism regime of the Financial Action Task Force. According to a letter the acting president, Goodluck Jonathan, wrote to the leadership of the National Assembly on the 12th of this month, Nigeria may be blacklisted again by the FATF if the bills are not passed into law by the end of June.

Nigeria, at its last meeting with the FATF in Bahrain in February, 2010, promised to pass both bills before June 30, 2010, six months later than an earlier promise by Umaru Yar’adua that the bills will be ready before the end of 2009.

“Given this administration’s commitment to combat corruption and terror and boost the country’s economic development, a blacklisting by the Financial Action Task Force (FATF) will no doubt seriously hamper these laudable efforts,” the Acting president wrote in his letter.

Although the money laundering bill had no financial implication - a major requirement of bills considered in the Senate - the Senate went ahead to debate and pass it after the Senate President, David Mark, persuaded the Senators to relax the rules owing to the exigency of the bill.

The Money Laundering bill

The new money laundering act seeks to replace the Money Laundering Act of 2004 and make more comprehensive provisions to prohibit the financing of terrorism. The bill also makes provision for appropriate penalties for offenders, and expands the scope of supervisory and regulatory authorities.

“The bill also takes care of the deficiencies and weaknesses in the existing law,” Teslim Folarin, the Senate Leader argued in his lead debate. For instance, in the current money laundering prohibition law, “there is no requirement that relates to politically exposed persons, and no statement that clearly defines such according to FATF standards.” Also, the current reporting requirement for occasional transactions that are wire transfers, is US $5, 000, which exceeds the FATF standard of US $1, 000.

The new bill makes provisions for the prohibition of the establishment of shell banks in Nigeria, legal requirement for the reporting of suspicious transactions or transactions relating to terrorism financing, legal protection for whistle blowers, and a legal provision that requires the Nigerian Financial Intelligence Unit (NFIU) to ensure that the information it holds is securely protected and disseminated only in accordance with the law.

The new bill will also bring a clear definition of money laundering, provide stiffer penalties for offenders, and proffer solution to the management of confiscated properties of convicted offenders.

Like the anti terrorism bill read the previous day, the money laundering bill also received favourable debate from the sitting Senators and was subsequently referred to the Senate committee on drugs and narcotics for further legislative action, and to be returned for passage into law in a fortnight.