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1. Introduction
Nigeria has been described as one of the most corrupt countries in the world. Pervasive corruption in Nigeria constitutes a major threat and underlies most of the money laundering cases reported in recent time (The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), 2008). Over the past 27 years, the Nigerian Government has committed itself to combating corruption and money laundering.
In the 1980s, Nigeria took a bold initiative to enact the National Drug Law Enforcement Agency (NDLEA) Act, No. 48 of 1989. This was to set the stage in confronting the menace of money laundering on economic activities and to comply with the Vienna Convention.
Again in 1994, the Government took another bold step to address bank failure, through checking the activities of money launderers and abuse by insiders in the banking sector, by promulgating the Failed Banks (Recovery of Debt and Financial Malpractice in Banks) Act of No. 18 of 1994. Until then, a number of unpleasant developments in the banking industry were threatening to undermine confidence in and integrity of the financial system, through facilitating crime and corruption, as well as allowing criminally minded bank directors and managers to retain and savor the rewards of their illegal actions (Sanusi, 2003).
The third bold step was the promulgation of the Money Laundering Act of 1995, which criminalized money laundering – the first to do so in Africa. This law was, however, limited in scope, as it covered money laundering offences related only to proceeds of drug trafficking. Thus, it was amended in 2004 to meet the requisite international standards, including provision for the establishment of a financial intelligence unit.
Under the Money Laundering Prohibition Act 2004, predicate offences covered a wide range of criminal conducts including financial malpractices, retention of proceeds of crime, corruption, conversion or the transfer of resources derived from narcotic drugs or any illegal act or crime (The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), 2008).
In 2009, the Financial Action Task Force (FATF) decided to subject Nigeria to a targeted review on account of the size of her financial system and poor ratings on 13 of the 16 key/core recommendations of the FATF during the country’s 2007 Mutual Evaluation. In view of...