Nigeria AML & Sanctions Compliance - ANQA

Nigeria AML & Sanctions Compliance

Navigate Nigeria's complex regulatory landscape with Anqa's comprehensive compliance solutions designed for West Africa's leading financial hub.

Nigeria Overview

Nigeria maintains a sophisticated financial sector with comprehensive AML/CFT requirements. The country's regulatory framework is primarily governed by the Money Laundering (Prevention and Prohibition) Act 2022 and the Terrorism (Prevention and Prohibition) Act 2022, with oversight from multiple regulatory bodies.

Regulatory Framework

Nigeria's approach to Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) is defined by a robust set of national laws and oversight from multiple regulatory bodies, aiming to safeguard its significant financial sector.

The AML/CFT framework in Nigeria is primarily governed by the Money Laundering (Prevention and Prohibition) Act 2022 and the Terrorism (Prevention and Prohibition) Act 2022. Key regulatory and supervisory bodies include:

  • Nigerian Financial Intelligence Unit (NFIU): The central unit for receiving, analyzing, and disseminating financial intelligence, and supervising compliance of Designated Non-Financial Businesses and Professions (DNFBPs).
  • Central Bank of Nigeria (CBN): Regulates and supervises banks and other financial institutions, issuing AML/CFT directives and conducting on-site examinations.
  • Securities and Exchange Commission (SEC): Regulates and supervises the capital market, ensuring AML/CFT compliance by market operators.
  • National Insurance Commission (NAICOM): Regulates and supervises the insurance sector for AML/CFT compliance.
  • Economic and Financial Crimes Commission (EFCC): Investigates and prosecutes economic and financial crimes, including money laundering and terrorism financing.

FATF Status & Engagement

Summary of FATF Standing & Key Issues

Key References/Verification

Compliance Requirements

Financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) in Nigeria must adhere to a comprehensive set of AML/CFT obligations as stipulated by the Money Laundering (Prevention and Prohibition) Act 2022, Terrorism (Prevention and Prohibition) Act 2022, and regulations from NFIU, CBN, SEC, NAICOM and other supervisory bodies.

Core Obligations

  • Customer Due Diligence (CDD) / Know Your Customer (KYC): Enhanced CDD required for high-risk customers, including Politically Exposed Persons (PEPs). Verification of customer identity using valid government-issued documentation and other reliable, independent sources is mandatory.
  • Beneficial Ownership Identification: Requirements to identify and verify beneficial owners, typically defined by a threshold (e.g., 5% direct/indirect shareholding or voting rights as per CAMA 2020, or significant control). Implementation has been strengthened through the Companies and Allied Matters Act (CAMA) 2020, which mandates the maintenance of a register of Persons with Significant Control (PSC Register) by companies.
  • Transaction Monitoring: Institutions must implement risk-based transaction monitoring systems, whether manual or automated, to detect unusual or suspicious transactions. Automated systems are generally expected for larger institutions.
  • Record Keeping: Minimum 5-year retention period for all customer identification data, transaction records, correspondence, and analysis results, after the termination of the business relationship or the date of the transaction.
  • Reporting Obligations: Mandatory reporting of Suspicious Transaction Reports (STRs) to the NFIU promptly (e.g., within 24 hours of suspicion). Currency Transaction Reports (CTRs) for transactions above specified thresholds (e.g., ₦5 million for individuals, ₦10 million for corporate bodies) must also be filed with the NFIU.

Key Challenges

  • Cash-Based Economy: Significant informal sector with heavy reliance on cash transactions, posing challenges for traceability and formal financial inclusion.
  • Corruption and PEP Risks: High corruption perception presents elevated risks associated with Politically Exposed Persons (PEPs), public procurement, and illicit enrichment.
  • Identity Verification: While improving with the National Identification Number (NIN) and Bank Verification Number (BVN), challenges remain in consistently verifying identities across all sectors and for all customer types, especially in remote areas.
  • Cross-Border Financial Flows: Porous borders and extensive regional trade can facilitate illicit financial flows, including trade-based money laundering and smuggling.
  • Rapid Fintech Growth: The fast-evolving financial technology landscape requires agile regulatory responses and creates new avenues for ML/TF risks if not adequately supervised.

Sanctions Considerations

Nigeria implements UN Security Council Resolutions (UNSCRs) through national laws and regulations, primarily via the Terrorism (Prevention and Prohibition) Act 2022 and other enabling legislation. Financial institutions and DNFBPs must screen customers and transactions against UN sanctions lists, as well as other international watchlists (e.g., OFAC, EU, UK) as part of their risk-based approach. The NFIU, CBN, and other regulators also issue guidance on sanctions compliance.

Heightened due diligence is required for transactions involving high-risk jurisdictions and sectors, particularly those with exposure to corruption, terrorism financing, or proliferation financing risks. Specific attention should be paid to entities and individuals designated under Nigerian domestic anti-terrorism (e.g., Proscription Orders) or anti-corruption frameworks. Institutions must have systems to identify and freeze assets of designated persons and entities without delay and report actions taken to relevant authorities.

Key Compliance Challenges in Nigeria

Understanding the unique obstacles facing financial institutions and DNFBPs in Nigeria

1

Regulatory Complexity & Coordination

Nigeria's financial system is regulated by multiple authorities (NFIU, CBN, SEC, NAICOM, EFCC), each with specific AML/CFT mandates, creating a complex compliance landscape that requires careful navigation and inter-agency coordination.

2

Mobile Money & Fintech Evolution

The rapid growth of mobile money services and fintech innovations requires vigilant management of new payment channels and evolving risks, ensuring compliance with AML regulations, data protection, and consumer protection.

3

Beneficial Ownership Transparency

Complex corporate structures and nominee arrangements can obscure beneficial ownership, posing challenges for identification and verification, particularly for entities in high-risk sectors or involved in cross-border activities, despite the PSC Register.

4

Sanctions Screening & Compliance

As a major African economy and regional financial hub, Nigeria requires sophisticated sanctions screening capabilities against multiple international and domestic lists, particularly for international trade, correspondent banking, and emerging TF risks.

5

Effectiveness of Implementation

While the legal framework is largely robust, ensuring consistent and effective implementation of AML/CFT measures across all reporting entities, and demonstrating this effectiveness to international assessors, remains an ongoing focus and key challenge.

6

Corruption & Reputational Risk

Significant corruption risks necessitate robust due diligence, particularly for PEPs, public contracts, and state-owned enterprises. AML/CFT deficiencies can lead to severe reputational damage and regulatory penalties.

Anqa's Approach for Nigeria: The Platform

Our comprehensive AML solution tailored for Nigeria's sophisticated regulatory requirements and diverse financial landscape.

1

Nigeria KYC/CDD & Onboarding Hub

Digital KYC integration with Nigeria's identity verification systems (e.g., NIN, BVN where applicable), centralized repository, and assisted onboarding tools. Workflows aligned with NFIU, CBN, and other regulatory requirements for various customer types.

Benefit: Streamlines customer identification, supports compliance with Nigerian CDD/KYC mandates, and enhances data accuracy for risk assessment.

2

Risk-Based Approach for Nigeria

Dynamic risk classification engine using Nigeria-specific parameters (e.g., exposure to cash-intensive sectors, PEPs, high-risk industries like oil & gas). Behavior-driven risk adjustments aligned with local regulatory expectations.

Benefit: Enables effective risk segmentation and application of proportionate AML/CFT controls as required by Nigerian regulations.

3

Comprehensive Screening (Global & Local)

Screening against UN, OFAC, EU, UK sanctions lists, global PEP databases, adverse media, and relevant Nigerian domestic watchlists (e.g., terrorism, financial crimes). Optimized matching for Nigerian naming conventions.

Benefit: Mitigates sanctions and high-risk entity exposure, supporting compliance with both international obligations and Nigerian specific requirements.

4

Transaction Monitoring (Naira & Digital)

Advanced transaction monitoring with rules and anomaly detection tailored for Naira (NGN) transactions, digital payments, and emerging fintech services. Supports generation of data for CTRs and STRs to NFIU.

Benefit: Detects suspicious activities in line with Nigeria's economic context and regulatory reporting thresholds, aiding timely submissions to the NFIU.

5

Compliance Workflow & Reporting

Centralized case management with customizable workflows aligned with Nigerian investigation and reporting processes (NFIU, CBN). Audit trails for all compliance actions.

Benefit: Ensures accountability, simplifies regulatory examinations, and helps Nigerian institutions meet reporting duties effectively.

6

Deployment & Localized Support

Flexible deployment options (cloud/on-premise). Modular pricing. Training and support geared towards Nigerian regulatory understanding and operational needs.

Benefit: Offers an adaptable and user-friendly AML solution for Nigerian institutions, enhancing adoption and effectiveness.

Anqa: Partnering for AML/CFT Excellence in Nigeria

Anqa is dedicated to supporting Nigeria in its commitment to strengthening its AML/CFT regime and addressing the strategic deficiencies identified by FATF. Our platform is designed to empower financial institutions and DNFBPs across Nigeria to build resilient compliance frameworks.

By providing advanced, adaptable technology solutions for KYC/CDD, risk assessment, transaction monitoring, and regulatory reporting, we aim to help Nigerian entities meet the stringent requirements of the Money Laundering (Prevention and Prohibition) Act 2022, CBN guidelines, NFIU directives, and contribute to Nigeria's progress in enhancing the effectiveness of its AML/CFT system. We believe robust compliance is vital for Nigeria's financial integrity, economic growth, and its standing in the international financial community.

Nigeria — AML & Compliance FAQs

  • AML compliance in Nigeria is primarily regulated by the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU). Other important agencies include the Securities and Exchange Commission (SEC Nigeria) and the Special Control Unit Against Money Laundering (SCUML). These authorities oversee Nigeria’s evolving AML compliance framework for financial institutions, fintechs, microfinance banks, and designated non-financial businesses.

  • Under the Money Laundering (Prevention and Prohibition) Act, 2022, Nigerian fintechs, SMEs, and financial service providers must implement stringent KYC verification processes, conduct continuous transaction monitoring, file Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) with the NFIU, and perform sanctions list screenings. Adhering to CBN AML guidelines 2025 and understanding how to report suspicious transactions in Nigeria is essential for maintaining compliance and avoiding regulatory penalties.

  • Businesses must submit a Suspicious Transaction Report (STR) to the Nigerian Financial Intelligence Unit (NFIU) immediately upon detecting suspicious activity, regardless of whether the transaction was completed. Filing STRs accurately and promptly is a critical component of Nigeria AML compliance. Businesses can use electronic platforms or designated reporting channels provided by the NFIU to fulfill their reporting obligations efficiently.

  • Yes. Nigerian fintechs, mobile money operators, and digital banks must comply with CBN’s comprehensive AML/CFT regulations, including customer due diligence, transaction monitoring, record keeping, and mandatory STR and CTR filing. The rise of fintech solutions has led regulators to issue additional fintech compliance requirements Nigeria to ensure mobile financial services meet national and international AML standards.

  • Anqa Compliance offers affordable, mobile-first AML compliance solutions tailored for Nigeria’s SMEs, fintechs, and regulated entities. Our platform enables businesses to automate KYC onboarding, monitor customer transactions in real time, perform sanctions screenings, and file STRs and CTRs with the NFIU — all aligned with Nigeria AML compliance obligations for 2025. Simplify your AML workflows and stay ahead of evolving regulatory demands with Anqa.

Dig Deeper – Country Compliance in Focus

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