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Money Laundering In Nigeria – Meaning, Causes, History, Laws, Effects

Money Laundering In Nigeria – Meaning, Causes, History, Laws, Effects. In Nigeria, and many other African countries, the problem of money laundering is still very relevant.

Money Laundering In Nigeria

Have you been involved in Money laundering unknowingly? Do you know that it has a number of negative effects? Well, look no more further as this article offers basic information on all you need to know on Money laundering.

MEANING OF MONEY LAUNDERING

Money laundering is an illegal act of hiding the money illegally obtained and making it go through a tangled sequence which is complex.

In other words, money laundering happen when the true origin of money is concealed or withheld. Financial and business crimes has now become associated with Money Laundering. Some common ways of money laundering in Nigeria are buying and resale of products, smuggling of cash, real estate buying etc.

See Also: Challenges Facing Investors in The Nigerian Capital Market

CAUSES OF MONEY LAUNDERING

There are a number of causes of money laundering which are:

  1. Low level of transparency: The illegal act of money laundering may happen more in institutions or organisation that do not practice good values.
  2. Bad governance: Lack of good governance such as observance of the rule of law, accountability and strong rules and regulation promotes money laundering in institutions.

Absence of good governance also does not give room for punishing Criminals properly.

HISTORY OF MONEY LAUNDERING

Money laundering’s earliest history is traced to 2000 years ago when some Chinese merchants hid money that they made from true businesses from kings that were very greedy. They also did not pay taxes after it was successful, they then invested the money in their villages.

The important point to note here is that if one fails to pay one’s tax after doing a business, the person has committed the offence of money laundering.  In modern days, money laundering started when some criminals created criminal groups in the 1920s.

The leader of the gang was identified as Meyer Lansky. He illegally got his money and later started giving out loans to his fellow criminals by his bank to make or show that his wealth came from a legitimate source.

The British Guardian newspaper used the term “Money Laundering ” first to report how one company located in Miami transferred illegal money from the United states to mexico and then sent it back to the united states to  be donated for the re-election of President Nixon.

MONEY LAUNDERING LAWS IN NIGERIA

According to the Money Laundering (Prohibition) Act of 2011 (As Amended) Money laundering laws are spelt out in Section 15 of the Act. Which are:

  1. Illegal for any individual to accept or make any cash payment that exceeds N5,000,000.00 (Five Million Naira). This means that every cash transaction over N5m must be done through a financial institution.
  2. Corporate institutions shall not make or accept any cash payment of a sum exceeding N10,000,000.00 (Ten Million Naira) except in a transaction through a financial institution.
  3. The Act provides that any individual who is transporting cash or negotiable instruments in excess of US $10,000 or its equivalent must declare this to the Nigerian Customs Service. Non declaration of the funds or false declaration s an offence that is punished upon conviction by the individual forfeiting the funds in question, or to imprisonment of not less than 2 years or both.

See Also: Top 10 Functions of The Nigerian Stock Exchange Market

EFFECTS OF MONEY LAUNDERING IN NIGERIA

Money laundering has highly affected Nigeria in trying to come into the world economy. Money laundering again has created a wide gap between the rich and the poor. This thus, pushes a lot of jobless Nigerian youths into Criminal activities such as terrorism and robbery and this in turn negatively affects the country’s economy.

Money laundering also drastically reduces the financial resources of the Nigerian economy from western countries.  This simply means that monetary assistance from the western countries will be negatively affected.

How much is considered money laundering?

This is money laundering. According to the International Monetary Fund, the amount of money laundered every year is estimated to be between $600 billion and $1.5 trillion. Money laundering occurs whenever a person attempts to conceal the source, destination, or identity of illegally obtained or acquired money.

What section is money laundering?

“The offence of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering,” Section 3.


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About the author

Ruth Aldama

Ruth Aldama is a Content Developer at Dailytipsfinder.com. Ben Update Is A Team of Resource Persons and Consultants. If You Need A Personal Assistance on This Topic, Kindly Contact Us.

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