Is SCUML Certificate Mandatory For Law Firms?

By Okpi Bernard Adaafu Esq,

This article examined the Special Control Unit against Money Laundering (SCUML) certificate requirement for law firms under the Money Laundering (Prevention and Prohibition) Act, 2022.

SCUML certificate is one of the requirements for opening of corporate bank account by specified entities. The argument on whether or not a law firm requires SCUML certificate was settled in 2015 when the Court of Appeal ruled that “law firms are excluded from providing SCUML certificate in the course of their operations in order to comply with the rule of confidentiality for legal practitioners (See Registered Trustees of Nigerian Bar Association V. AGF & CBN (Suit No: FHC/BS/173/2014) and; CBN V. NBA & AGF (Appeal No: CA/A/202/2015)). It appears this position is no longer the law as presented below.

A cursory review of the Money Laundering Act 2022 shows that Section 30 of the Act defined designated non-financial institutions/professions to include law firms. Thus, the hitherto jealously guided legal practitioner and client privilege (confidentiality) has been circumscribed in that certain matters are no longer insulated by the rule of confidentiality. Particularly Section 11(4) of the Act provides that;

Legal professional privilege and the invocation of client confidentiality shall not apply in connection with;

1. the purchase or sale of property ;
2. the purchase or sale of any business ;
3. the managing of client money, securities or other assets ;
4. the opening or management of bank, savings or securities accounts ;
5. the creation, operation or management of trusts, companies or similar structures ; or
6. anything produced in furtherance of any unlawful act.

From the foregoing provision, it is clear that the items listed above are not protected by the rule of confidentiality and a lawyer is obligated to release information relating to these transactions to relevant authority whenever the need arises. Similarly, the Act empowered SCUML amongst other things to; ‘register and certify designated non-financial businesses and professions.

Suffice to say law firms are bound to comply with SCUML requirements. The 2015 decision of the Court of Appeal in the case of CBN v NBA was repealed by the Money Laundering Act 2022. There is no need to dissipate energy arguing with entities that demand for SCUML certificate. Law firms should obtain SCUML certificate to avoid embarrassment and delay in the course of their operation. However, the Nigerian Bar Association or its members may approach the court to set aside the provisions of Money Laundering Act 2022 mandating law firms to provide SCUML certificate. Hopefully, the court may reaffirm its 2015 position and exclude law firms from SCUML requirements.

Written By Okpi Bernard Adaafu Esq,okpibernardadaafu@gmail.com
Kanu Godwin Agabi SAN, CON & Associates