AN EXAMINATION OF THE CONCEPT OF CUSTOMER DUE DILIGENCE UNDER THE NIGERIAN MONEY LAUNDERING (Prohibition) ACT, 2011 (As amended).
The key steps financial and designated â€“ non financial institutions are required to perform to prevent illicit funds from entering their system is Customer Due Diligence (CDD), to find out who their customer is, where his funds have come from and the beneficiary of such funds. While it is important that financial institutions develop their own effective CDD policies, leaving them to do it on their own without regulatory oversight will not work, because the avoidance of illicit funds, inevitably involves turning down potential business, and not all financial institutions are willing to do this. The current system of customer due diligence entrenched in Nigerians Money Laundering (Prohibition) Act, 2011 (As amended), is full of loopholes. The result is that financial and designated-non financial institutions are complicit in helping to perpetrate money laundering and terrorist financing. It is the aim of this paper to explore the provisions of Nigeriaâ€™s Money Laundering (Prohibition) Act, 2011 with a view to identifying vulnerabilities where Nigeriaâ€™s response to customer due diligence may need to be strengthened.
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