ANTI-MONEY LAUNDERING (AML) REGIME IN BANKS AND OTHER FINANCIAL INSTITUTIONS: TRENDS, CHALLENGES AND PROSPECTS FOR NIGERIA

Abstract

Money laundering undermines the integrity of a country’s financial system and facilitates criminal activities, such as drug trafficking, terrorists financing, and corruption. Nigeria has been identified as one of the major money laundering hubs in the world due to its large informal economy, weak financial regulations, and porous borders. Recognizing the effects of money laundering to the economy, the country has implemented various initiatives to combat money laundering, but with no meaningful results. Adopting the doctrinal research methodology, this paper examines the trends, challenges, and prospects for money laundering on the Nigeria's economy. The paper argued that despite the legal and institutional framework, and other measures put in place for combating money laundering in Nigeria, this illicit activity remains a part of Nigeria’s daily life. It concluded that Nigeria’s financial system is most vulnerable to money laundering activities because of the high volume of cash transactions and ineffective enforcement mechanisms and advocated for review of the laws to align with emerging trends.