There are several professionals and businesses that must obtain Anti-Money Laundering certificate (often referred to as SCUML Certificate/EFCC Clearance) before they can operate bank accounts. So, Special Control Unit against Money Laundering (SCUML) Certificate is a vital tool for opening and operating a bank account, for many businesses and professionals in Nigeria. This is handled by several law enforcement agencies, regulators and stakeholders, including the economic and Financial Crimes Commission (EFCC). This work focuses on the judgments of the Federal High Court and the Court of Appeal that exempt lawyers from SCUML certificate and the Money Laundering (Prohibition) Act.
To combat money laundering and terrorism, the Federal legislatures enacted two (2) laws to track flow of money in Nigeria. One of the Federal laws is the Money Laundering (Prohibition) Act 2011, which among other things, prohibits cash transactions and mandates Suspicious Transaction Reports to be reported to the Economic and Financial Crimes Commission (EFCC). The other federal law is the Terrorism (Prevention) Act 2011, which is designed to prevent acts of terrorism and by a later amendment in 2013, all law enforcement agencies are empowered to fight terrorism and to adopt measures to prevent terrorism in Nigeria. These are the statutory basis for SCUML certificates in Nigeria.
By the provisions of the Money Laundering (Prohibition) Act 2011, any Designated Non-Financial Institutions (DNFI) that is involved in cash transactions is to provide declaration of its activities to the Federal Ministry of Finance. By that law, Designated Non-Financial Institutions (DNFI) are dealers in Jewelry, cars and luxury goods, chartered accountants, audit firms, tax consultants, clearing and settlement companies, legal practitioners, hotels, casinos, supermarkets, or such other businesses as the Federal Ministry of Commerce or appropriate regulatory authorities may from time to time designate.
In 2013, the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2013 expanded the meaning and list of business/professionals referred to as Designation of Non-Financial Institutions from what is provided in the Money Laundering (Prohibition) Act 2011. By the 2013 Regulations, adding to the existing list, DNFI extended to professions including (a) Law firms, notaries, and other independent legal practitioners; (b) Accountants and Accounting firms ;(c) Trust and Company Service Providers ;(d) Estate Surveyors and Valuers ; (e) Mortgage Brokers ; and (f ) Non-Profit Organisations. And also to businesses including; (a) dealers in precious stones and metals ;(b) dealers in Real Estate, Estate Developers, Estate Agents and Brokers; (c) hospitality Industry; (d) Consultants and Consulting Companies; (e) Construction Companies ;(f ) importers and dealers in cars or any other automobiles ; (g) dealers in mechanized farming equipment and machineries ; and (h) practitioners of mechanized farming.
On 15 December 2016, came the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2016. This 2016 Regulations was made by the Minister of Industry, Trade and Investment, following powers created by the Money Laundering (Prohibition) Act 2011. By the 2016 Regulations, the list of Designated Non-Financial Institutions (DNFI) was expanded to include pool betting and lottery businesses. By the 2016 Regulation, the list and meaning of Designation of Non-Financial Institutions (DNFI) includes dealers in jewelry, cars and luxury goods, Precious stones and metals, Real estate, Estate developers, Estate surveyors and Valuers, Estate Agents, Chartered accountants, audit firms, tax consultants, clearing and settlement companies, legal practitioners, hotels, casinos, pool betting and lottery business, supermarkets and such other business as undertaking as other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate.
Although legal practitioners are listed both by law and regulations as professionals that need SCUML certificate, the professional body of lawyers (Nigerian Bar Association) has obtained a valid court judgement against this requirement. The duties expected of legal practitioners under the Money Laundering (Prohibition) Act and its related Regulations, translate to lawyers divulging sensitive information about their clients. These are privileged information offered to lawyers under the Client-Lawyer Relationship and cannot be breached except in special circumstances. This is part of the fundamental human rights of a client; “Right to Private and Family Life”. Click to read more on the judgement protecting lawyers from SCUML Certificate.
My authorities are:
1. Section 37 of the Constitution of the Federal Republic of Nigeria 1999.
2. Sections 1, 2, 5, 6, 25 and 26 of the Money Laundering (Prohibition) Act 2011
3. Section 1, 40 and 41 of the Terrorism (Prevention) Act, 2011
4. Section 1, 4, 14, 14 and 20 of the Terrorism (Prevention) (Amendment) Act, 2013
5. The Central Bank of Nigeria (Anti Money Laundering and Combating of Financing of Terrorism for Banks and Other Financial Institutions in Nigeria) Regulation 2013.
6. The Nigeria Securities and Exchange Commission (SEC) and National Insurance Commission (NAICOM) AML/CFT Regulations for their respective operators.
7. Regulations 1, 2, 4, 33 and 34 of the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2013
8. Regulations 1, 2, 3, and 4 of the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2016
9. The Terrorism Prevention (Freezing of International Terrorists Funds and Other Related Measures) Regulations, 2013.
10. The National (Money Laundering & Terrorist Financing) Risk Assessment Forum, “NIGERIA ANTI MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM NATIONAL STRATEGY 2018 – 2020” (SCUML, 2018) accessed 24 August 2020.
11. Sections of 192 and 195 of Evidence Act
12. Rule 19(1) of the Rules of Professional Conduct for Legal Practitioners 2007
13. The judgement of the Federal High Court in the case of Registered Trustees of Nigerian Bar Association V. AGF & CBN (Suit No: FHC/BS/173/2014).
14. The judgment of the Court of Appeal in the case of CBN V. NBA & AGF (Appeal No: CA/A/202/2015).
15. The Nation, “Court Restraints Fed Govt, CBN SCUML from Enforcing Money Laundering Act on Legal Practitioners” (The Nation, 23 December 2014) accessed 23 August 2020
16. Toyin Nwiido, Interview with Ogwemoh Sylva, SAN (Commercial Law Development Services, July 2018) accessed 22 August 2020.