The Role of Special Control Unit Against Money Laundering

The Role of Special Control Unit Against Money Laundering (SCUML) under the “Money Laundering (Prevention and Prohibition) Act 2022”

Author: O. M. Atoyebi S.A.N FCIArb. (U.K.)., Contributor: Chikezie M. Iwu

June 9, 2023
1:52 pm

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In years past, the EFCC (Economic and Financial Crimes Commission) has been tasked with the responsibility of coordinating various organizations involved in fighting money laundering and enforcing all laws in Nigeria about economic and financial crimes, both for financial institutions and non-financial institutions. This is so because Nigeria’s Financial Intelligence Unit (FIU) is officially the EFCC.

Before the enactment of the MLA, 2022, the Federal Government established the Special Control Unit Against Money Laundering (SCUML) within the EFCC in 2005 by executive order, with the aim of specifically operationalizing the EFCC’s functions as they relate to designated non-financial institutions (DNFIs). Today, in Nigeria, the SCUML manages, supervises, monitors, and regulates DNFIs in terms of MLA compliance criteria. Until the passage of MLA 2022, the SCUML was established through a Federal Government executive order.

This article will explore the establishment of the Special Control Unit Against Money Laundering (SCUML) under the MLA, 2022, its operations, and its duties.

ESTABLISHMENT OF SCUML

The Money Laundering (Prevention and Prohibition) Act, 2022, provides a comprehensive legal and institutional framework for preventing and prohibiting money laundering in Nigeria. It establishes the Special Control unit under the Economic and Financial Crimes Commission. The Money Laundering (Prevention and Prohibition) Act, 2022, is divided into Five Parts with thirty-one sections. It also includes the Objectives of the Act, which were notably absent in the repealed 2011 Act.

The Special Control Unit against Money Laundering was established under Section 17, PART III of the MONEY LAUNDERING (PREVENTION AND PROHIBITION) ACT, 2022.

SECTION 17 of the Act states:

(1) There is established a department under the Economic and Financial Crimes Commission to be known as the Special Control Unit Against Money Laundering (in this Act referred to as “the SCUML”) which shall be responsible for the supervision of designated non-financial businesses and professions in their compliance with the provisions of this Act, relevant laws and applicable regulations.

(2) The functions of SCUML are to:

(a) Register and certify designated non-financial businesses and professions in accordance with the provisions of this Act, relevant laws, and applicable regulations;

(b) Monitor and supervise designated non-financial businesses and professions in accordance with the provisions of this Act, relevant laws, and applicable regulations;

(d) Conduct off-site, on-site, and on-the-spot checks, and inspections of designated non-financial businesses and professions for the purposes of money laundering control and supervision;

(e) Establish and maintain a comprehensive database of designated non-financial businesses and professions;

(f) Receive cash-based transaction reports and currency transaction reports from designated non-financial businesses and professions in accordance with the provisions of this Act;

(g) Sensitize designated non-financial businesses and professions regarding their responsibilities under this Act; and

(h) Perform other functions necessary to fulfill its responsibilities under this Act or any other relevant laws and applicable regulations.[1]

However, the MLA, 2022, has provided a statutory basis for the independent existence and operation of SCUML–even though its administrative operations remain under the purview of the EFCC. The MLA 2022 designates SCUML as the authority directly responsible for the supervision of DNBPs in their compliance with the provisions of the MLA 2022, relevant laws, and applicable regulations. In essence, the EFCC–as a whole is responsible for FIs, while the SCUML regulates DNBPs.[2]

THE ROLE OF SCUML UNDER MLA, 2022.

The Special Control Unit against Money Laundering (SCUML) is a department under the Economic and Financial Crimes Commission charged with the responsibility of registering, monitoring, and supervising the activities of Designated Non-Financial Businesses and Professions (DNFBPs) in line with the Money Laundering (Prevention & Prohibition) Act, 2022, and Economic & Financial Crimes Commission (Anti-Money Laundering, Combating the Financing of Terrorism and Proliferation of Weapons of Mass Destruction for Designated Non-Financial Businesses and Professions and other Related Matters) Regulations, 2022.

The Designated Non-Financial Businesses & Professions are required under the above laws and Regulations to carry out the following:

(i) To register with SCUML.

(ii) To make Currency Transaction Reports (CTRs) to SCUML of any single transaction, lodgment, or transfer of funds in excess of N5,000,000 or it’s equivalent in the case of an individual, and N10,000,000 in the case of a corporate body within 7 days from the date of transaction via SCUML online reporting platform (infoscuml@efcc.gov.ng) or on the SCUML website scuml.org.

(iii) To make Cash Based Transaction Reports (CBTRs) to SCUML of any single transaction in excess of $1,000 or it is equivalent within 7 days from the date of transaction via SCUML online reporting platform (infoscuml@efcc.gov.ng) or on the SCUML website scuml.org.

(iv) To make Suspicious Transaction Reports (STRs) to the Nigeria Financial Intelligence Unit (NFIU) via dnfbp.nfiu.gov.ng.

(v) To comply with all relevant provisions of the Money Laundering (Prevention & Prohibition) Act, 2022.

Who are Designated Non-Financial Institutions (DNFIs) under the Act?

Section 30 of the MLA, 2022, defines DNFBPs as dealers in

1. Jewelry,

2. Cars and Luxury Goods,

3. Precious Stones and Metals,

4. Real Estate, Estate Developers, Estate Surveyors, and Valuers, Estate Agents,

5. Chartered Accountants, Audit Firms, Tax Consultants,

6. Clearing and Settlement Companies,

7. Hotels, Casinos,

8. Supermarkets,

9. Dealers in Mechanized Farming Equipment and Machineries, Practitioners of Mechanized Farming or

Such other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate.[3]

PROCEDURE AND EFFECT OF SCUML REGISTRATION

The registration for a SCUML Certificate can be completed on the online portal of The Special Control Unit against Money Laundering (SCUML) by doing the following:

1. Fill out the SCUML registration form online either by yourself or with the help of an experienced agent.

2. Submit the application alongside the required documents.

The documents required to be uploaded depend on the type of corporate entity and the applicable DNFI category.

The general documents required are:

1. CAC incorporation documents.

2. Evidence of tax registration; Tax Identification Number (TIN).

3. Evidence of tax exemption (where applicable).

4. Approvals/Authorization/licenses (where applicable).

5. Professional certificate (where applicable).

6. Any other document deemed necessary.

However, upon applying, a notification is sent on whether the application is approved or denied and it takes 14 to 21 days after submission of the application to complete the registration process and obtain the certificate.

The salient effect of obtaining the SCUML certificate issued by the EFCC is that it serves as proof that the organization’s bank account is not used for money laundering activities and certifies the organization as legitimate.

SUSPICIOUS TRANSACTIONS UNDER THE AML, 2022

The Special Control Unit against Money Laundering (SCUML) and Economic Financial Crimes Commission (EFCC) are the regulatory authorities for the implementation of the AML, 2022 concerning the DNFBP sector in Nigeria. However, suspicious transactions under the Act are considered an offense, unethical, and prohibited.

A transaction is tagged suspicious when a DNFBP suspects that it may involve:

1. proceeds of any of the offenses specified in the Money Laundering (Prevention and Prohibition) Act, 2022, regardless of the value involved; or

2. Appears to be made in circumstances of unusual or unjustified complexity, or

3. Appears to have no economic justification or lawful objective; or

4. A rise in suspicion that it may involve financing terrorism. STR has no threshold; it could be based on any amount. This report should be solely submitted to the Nigeria Financial Intelligence Unit (NFIU).

CONCLUSION

In conclusion, the Money Laundering (Prevention and Prohibition) Act, 2022, improves the current framework for tackling money laundering and related offences with the sole aim of “SCUML’’ being to contribute to the development of anti-money laundering efforts in Nigeria because it is not sufficient to control money laundering through financial institutions.

Lastly, it is essential to know that when a corporate entity is registered in Nigeria and falls under the category of DFNI, it ought to obtain a SCUML certificate as it is a mandatory obligation to fulfill, and the registration can be done on the SCUML website at no cost.

[1] Section 17 of the MLA, 2022.

[2] .Section 4(1) (d) of the MLA 2022.

[3] Section 30 of the MLA, 2022

The Role of Special Control Unit Against Money Laundering (SCUML) under the “Money Laundering (Prevention and Prohibition) Act 2022”

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