A Comparative Study of the Money Laundering Laws/Regulations in Nigeria, the United States and the United Kingdom: Reporting Requirements

Abstract

The Financial Action Task Force (FATF), the independent intergovernmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and financing the proliferation of weapons of mass destruction, advised countries to enact laws that mandate financial institutions and designated nonfinancial businesses and professions (DNFBPs) to file certain reports. These reports are to be filed when a financial institution or DNFBP suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity or are related to terrorist financing.

Although countries have followed the advice of the FATF, the reporting requirements in different countries are not the same. For example, Nigeria and the United States require financial institutions to file suspicious transaction reports (STRs) and currency transaction reports (CTRs), while countries like the United Kingdom require financial institutions to file only a suspicious activity report (SAR).

This paper, therefore, compares the reporting requirements in Nigeria with those of the United States and the United Kingdom. The aim of such comparison is to determine if Nigeria needs to adopt the approach in these countries or if there is no need for reform.

This paper briefly highlights the relevant money laundering laws/regulations in Nigeria, the United States and the United Kingdom. It will then compare the reporting requirements in Nigeria with those of the United States and the United Kingdom under five subheadings: ‘What to File’, ‘Where to File’, ‘When to File’, ‘Confidentiality of SARs’ and ‘Penalties’. This paper will later analyse issues that arise from the earlier comparison, with the aim of determining if there is need for reform.

Keywords: Reporting Requirements, Suspicious Transaction Reports, Currency Transaction Reports, Tipping off, Penalties, Money Laundering, Terrorist Financing, Confidentiality of SARs, Financial Institutions, Designated Non-Financial Businesses and Professions, Money Service Businesses