The Money Laundering (Prevention and Prohibition) Act 2022 Explained: What Nigerian Financial Institutions and DNFBPs Must Do
A plain-English guide to Nigeria's Money Laundering (Prevention and Prohibition) Act 2022: who it covers, the cash limit, customer due diligence and PEPs, STRs within 24 hours, currency transaction reports, foreign transfers, records, compliance programmes, SCUML and penalties.
Short answer: The Money Laundering (Prevention and Prohibition) Act, 2022 (MLPPA), Act No. 14 of 2022, is Nigeria's core anti-money laundering law. It replaced the 2011 Act and applies to financial institutions and designated non-financial businesses and professions (DNFBPs). Its main duties are customer due diligence with extra measures for politically exposed persons, suspicious transaction reports to the Nigerian Financial Intelligence Unit (NFIU) within 24 hours, currency transaction reports above ₦5 million or ₦10 million within seven days, reports of foreign transfers above US$10,000 within one day, five-year records and a compliance programme. It also limits cash payments and establishes the Special Control Unit Against Money Laundering (SCUML) as a department of the Economic and Financial Crimes Commission to supervise DNFBPs.
This guide is for compliance officers, board members and product teams at Nigerian banks, microfinance banks, payment service providers, insurers, capital-market operators, virtual asset service providers and DNFBPs. It follows the Act's sections in order. It is a plain-English summary, not legal advice: the Act, the regulations of your supervisor and the NFIU's guidance are the authoritative texts.
Who the Act covers
- Financial institutions. Banks and other financial businesses. The NFIU reads the Act's definition as including virtual asset service providers.
- DNFBPs. Section 30 lists automotive dealers, hotels and hospitality businesses, casinos, clearing and settlement companies, consultants, dealers in jewellery and in precious metals and stones, real estate dealers, developers, agents and brokers, high-value dealers, legal practitioners and notaries, licensed accountants, mortgage brokers, supermarkets, tax consultants, trust and company service providers and pools betting, plus businesses the trade minister designates.
Each sector's regulator enforces the Act alongside its own rules: the Central Bank of Nigeria, the Securities and Exchange Commission and the National Insurance Commission (NAICOM) through their AML/CFT regulations of 2022, and SCUML for DNFBPs through the EFCC (SCUML) Regulations, 2023.
The Act at a glance
| Section | What it does |
|---|---|
| 2 | Limits cash payments to ₦5 million (individual) or ₦10 million (body corporate) outside a financial institution, and prohibits structuring |
| 3 | Foreign transfers above US$10,000 reported within one day; cross-border cash above US$10,000 declared to Customs |
| 4 | Customer due diligence, beneficial owners, risk-based measures, correspondent banking and PEPs |
| 5 | Casinos: identity checks and a transaction register for SCUML |
| 6 | DNFBPs: declaration to SCUML, identification above US$1,000 and a transaction register |
| 7 | Suspicious transaction reports within 24 hours, stop orders and protection for reporters |
| 8–9 | Records for at least five years, available to the authorities on demand |
| 10 | Compliance programme: compliance officers, training, internal audit |
| 11 | Currency transaction reports above ₦5 million or ₦10 million within seven days |
| 12 | No anonymous or numbered accounts and no shell banks |
| 13 | Risk assessment of new products, practices and technologies |
| 17 | SCUML established within the EFCC to register and supervise DNFBPs |
| 18–19 | Money laundering and other offences |
| 27 | Administrative sanctions by supervisors |
| 29 | Repeal of the Money Laundering (Prohibition) Act, 2011 |
Cash limits and structuring (section 2)
No person or body corporate may make or accept a cash payment above ₦5,000,000 (individual) or ₦10,000,000 (body corporate) except through a financial institution, and nobody may split transactions to avoid a reporting duty. Making or accepting cash above the limit is an offence under section 19.
Foreign transfers (section 3)
Transfers to or from a foreign country of funds or securities above US$10,000 or its equivalent, including by money service businesses, are reported in writing to the NFIU, the Central Bank of Nigeria and the Securities and Exchange Commission within one day, with the nature and amount and the names and addresses of the sender and the receiver. Individuals carrying cash or negotiable instruments above US$10,000 in or out of Nigeria declare them to the Nigeria Customs Service.
Customer due diligence and PEPs (section 4)
Institutions identify customers and beneficial owners, verify identity from reliable independent sources, and check that anyone acting for a customer is authorised. Due diligence applies when a relationship starts, for occasional transactions above the regulations' threshold (including linked transactions), for occasional wire transfers, on suspicion whatever the amount, and when earlier identification data is doubtful. Relationships get ongoing due diligence, enhanced measures where risk is higher and simplified measures only where it is lower and there is no suspicion. A casual customer's transactions above US$1,000 trigger due diligence.
For foreign politically exposed persons (PEPs), institutions obtain senior-management approval, establish the source of wealth and funds, and monitor the relationship more closely; the same measures apply to domestic PEPs and people with a prominent function in an international organisation where the relationship is higher risk. Our enhanced due diligence guide covers the practice.
Casinos and DNFBPs (sections 5 and 6)
Casinos, including internet and ship-based casinos, verify customers' identity and keep a chronological register of transactions for SCUML, preserved for five years. A DNFBP whose business involves cash declares its activities to SCUML before starting business, identifies customers before any transaction above US$1,000 and keeps a numbered register for SCUML. Failing to identify customers or submit returns within seven days carries ₦250,000 for each day and possible loss of licence.
Suspicious transaction reports (section 7)
A transaction is suspicious where its frequency is unjustifiable, its conditions are unusually complex, it appears to have no economic justification or lawful objective, it is inconsistent with the account's known pattern, or the institution believes it involves criminal proceeds. The institution reports to the NFIU immediately and, within 24 hours after the transaction, draws up a written report, acts to prevent the laundering and reports the action taken, whether or not the transaction was completed. The NFIU may defer the transaction for up to 72 hours, the NFIU or the EFCC may place a stop order of up to 72 hours, and the Federal High Court may order funds blocked. Failing to report carries ₦1,000,000 for each day; staff who report in good faith are protected. See our NFIU STR guide.
Records (sections 8 and 9)
Transaction records are kept for at least five years after the transaction, and due-diligence records, account files, business correspondence and analysis for at least five years after the relationship ends. Records must let individual transactions be reconstructed and be made swiftly available to the competent authorities.
Compliance programme (section 10)
Every financial institution and DNFBP designates compliance officers at management level at its headquarters and every branch and local office, trains its employees regularly, centralises the information it collects, and runs an internal audit unit to test the measures. The CBN, SEC, NAICOM and SCUML may impose penalties for failure (up to ₦1,000,000 for DNFBPs, at least ₦1,000,000 for capital brokerage and other financial institutions, and ₦5,000,000 for a bank) and suspend licences.
Currency transaction reports (section 11)
Any single transaction, lodgment or transfer of funds above ₦5,000,000 for an individual or ₦10,000,000 for a body corporate is reported in writing within seven days: by financial institutions to the NFIU and by DNFBPs to SCUML. The penalty for contravention is ₦250,000 to ₦1,000,000 for each day. Legal professional privilege does not apply to listed matters such as property and business sales and managing client money. See our currency transaction report guide.
Accounts, new products and SCUML (sections 12, 13 and 17)
Anonymous and numbered accounts and shell banks are prohibited. New products, business practices, delivery mechanisms and technologies must be risk-assessed. SCUML, a department of the Economic and Financial Crimes Commission, registers, certifies, monitors and supervises DNFBPs, inspects them and receives their cash-based and currency transaction reports.
Offences and penalties (sections 18, 19 and 27)
Money laundering, including concealing, converting, transferring or using the proceeds of an unlawful act, carries 4 to 14 years' imprisonment or a fine of at least five times the value of the proceeds, or both; a body corporate faces a fine of at least five times the value, and persistent offending can cost it its licence. It is not necessary to prove a specific predicate offence. Further offences include tipping off, destroying records, transacting under a false identity, cash payments above the limit and failing to report an international transfer. Supervisors may also impose administrative sanctions prescribed in regulations by the Attorney-General.
What this means for your systems
| Duty | What a system has to do |
|---|---|
| Due diligence and PEPs | Hold identity and beneficial-owner data, rate risk, flag PEPs and route them for senior-management approval |
| Sanctions | Screen against the Nigeria Sanctions List, which the Nigeria Sanctions Committee publishes, and UN lists |
| Suspicious transactions | Raise alerts on the section 7 patterns, and time-stamp each step to meet the 24-hour rule |
| Currency transaction reports | Detect transactions above ₦5 million or ₦10 million by customer type and file within seven days |
| Foreign transfers | Detect transfers above US$10,000 and report them within one day |
| Records | Keep reconstructable records for at least five years |
Our buyer's guide to AML compliance software in Nigeria turns these duties into evaluation criteria.
Frequently asked questions
What is the MLPPA 2022?
The Money Laundering (Prevention and Prohibition) Act, 2022, Act No. 14 of 2022, is Nigeria's core anti-money laundering law. It repealed the Money Laundering (Prohibition) Act, No. 11, 2011.
Who must comply with the MLPPA 2022?
Financial institutions, including virtual asset service providers in the NFIU's reading of the Act, and DNFBPs such as casinos, pools betting companies, real estate businesses, dealers in jewellery and precious metals, automotive dealers, lawyers, accountants and trust and company service providers.
What does section 7 of the MLPPA 2022 require?
An immediate report to the NFIU of a suspicious transaction and, within 24 hours after it, a written report, action to prevent the laundering and a report of that action, whatever the amount and whether or not the transaction was completed.
What does section 11 of the MLPPA 2022 require?
A written report within seven days of any single transaction, lodgment or transfer of funds above ₦5,000,000 for an individual or ₦10,000,000 for a body corporate: to the NFIU by financial institutions and to SCUML by DNFBPs.
What is the penalty for money laundering in Nigeria?
Under section 18, 4 to 14 years' imprisonment or a fine of at least five times the value of the proceeds, or both, for an individual, and a fine of at least five times the value for a body corporate.
See how Creodata's AML compliance software in Nigeria maps each MLPPA duty to a module: book a demo.
