FAQ
Most frequent questions and answers
Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions.
Section 1 of the ANTI-Money Laundering Act, 2008 (Act 749) as amended states that; a person commits an offence of money laundering if the person knows or ought to have known that property is or forms part of the proceeds of unlawful activity and the person:
(a) converts, conceals, disguises or transfers the property,
(b) conceals or disguises the unlawful origin of the property, or
(c) acquires, uses or takes possession of the property
Placement –This is the physical disposal of cash/assets derived from a criminal activity into the financial system.
Layering –Separating illicit proceeds from their sources through layers of financial transactions intended to conceal the origin of the proceeds
Integration –It is the stage of giving legitimacy to illicit wealth through the re-entry of the funds into the economy.
The process of identifying the threats, vulnerabilities and impact of money laundering and terrorist financing on the national level, product, customer, geographical location, delivery channels among others.
This refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.
This is the financing of terrorist acts, and of terrorists and terrorist organisations.
This refers to any group of terrorists that:
(i) commits, or attempts to commit, terrorist acts by any means, directly or indirectly, unlawfully and willfully;
(ii) participates as an accomplice in terrorist acts;
(iii) organises or directs others to commit terrorist acts; or
(iv) contributes to the commission of terrorist acts by a group of persons acting with a common purpose where the contribution is made intentionally and with the aim of furthering the terrorist act or with the knowledge of the intention of the group to commit a terrorist act.
Is an inter-governmental body that sets and promotes standards on money laundering and terrorist financing.
Ideally, within a matter of hours of a designation by the United Nations Security Council or its relevant Sanctions Committee (e.g. the 1267 Committee, the 1988 Committee, the 1718 Sanctions Committee). It also means upon having reasonable grounds, or a reasonable basis, to suspect or believe that a person or entity is a terrorist, one who finances terrorism or a terrorist organisation.
Is a specialized institution of ECOWAS that is responsible for strengthening the capacity of member states towards the prevention and control of money laundering and terrorist financing in the region. There are other nine (9) FATF-Style Regional Bodies.
These are regional bodies created to replicate the activities of the FATF. Activities such as Mutual Evaluations, capacity building workshops are organized by the regions. The following are FATF Style Regional Bodies;
- Asia/Pacific Group on combating money laundering (APG)
- Caribbean Financial Action Task Force (CFATF)
- Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe (MONEYVAL)
- Eurasian Group (EAG).
- Middle East and North Africa (MENAFATF)
- Eastern and Southern Anti-Money Laundering Group (ESAAMLG).
- Financial Action Task Force on Latin America (GAFILAT).
- Task Force on Money Laundering in Central Africa (GABAC).
- Inter-Governmental Action Group against Money Laundering in West Africa (GIABA).
This refers to steps an institution undertakes in order to understand the money laundering/ terrorist financing risk posed by a client. The following steps are minimum steps that may be considered under KYC/CDD measures:
- Identifying the customer and verifying that customer’s identity using reliable, independent source documents, data or information.
- Identifying the beneficial owner, and taking reasonable measures to verify the identity of the beneficial owner, such that the financial institution is satisfied that it knows who the beneficial owner is. For legal persons and arrangements this should include financial institutions understanding the ownership and control structure of the customer.
- Understanding and, as appropriate, obtaining information on the purpose and intended nature of the business relationship.
- Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, their business and risk profile, including, where necessary, the source of funds.
Financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) should be required to keep all records obtained through CDD measures (e.g. copies or records of official identification documents like passports, identity cards, driving licences or similar documents), account files and business correspondence, including the results of any analysis undertaken (e.g. inquiries to establish the background and purpose of complex, unusual large transactions), for at least five years after the business relationship is ended, or after the date of the occasional transaction.
This means the permanent deprivation of funds or other assets by order of a competent authority or a court.
Refers to banknotes and coins that are in circulation as a medium of exchange.
Refers to a trust clearly created by the settlor, usually in the form of a document e.g. a written deed of trust.
Is an assessment of a country’s measures to combat money laundering, the financing of terrorism and the proliferation of weapons of mass destruction. This includes an assessment of a country’s actions to address the risks emanating from money laundering activities as well as designated terrorists or terrorist organisations.
This is where countries identify, assess and understand the risks of money laundering and terrorist finance that they face and then adopt appropriate measures to mitigate those risks.
Is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes