Persons That Must Obtain SCUML (EFCC) Certificate.

Daily Law Tips (Tip 738) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)

While many banks and bankers may not worry or warn a customer when accepting deposits, they sure will warn and demand for an Anti-Money Laundering certificate (often referred to as SCUML Certificate/EFCC Clearance) before allowing withdrawals and operation of bank accounts. So, Special Control Unit against Money Laundering (SCUML) Certificate is a vital tool for opening and operating a bank account, for many businesses and professionals in Nigeria. This is handled by several law enforcement agencies, regulators and stakeholders, including the Economic and Financial Crimes Commission (EFCC). This work focuses on the class and list of persons, professionals and businesses that are required to obtain SCMUL certificate and the essence of the certificate.

To combat money laundering and terrorism, the federal legislature enacted two (2) laws to monitor the flow of illicit monies in Nigeria, among other things. One of the Federal laws is the “Money Laundering (Prohibition) Act 2011”, which among other things, prohibits cash transactions and mandates Suspicious Transaction Reports to be sent to the Economic and Financial Crimes Commission (EFCC). The other federal law is the Terrorism (Prevention) Act 2011, which is designed to prevent acts of terrorism and by a later amendment in 2013, all law enforcement agencies are empowered to fight terrorism and to adopt measures to prevent terrorism in Nigeria. These are the statutory basis for SCMUL certificates in Nigeria.

The Special Control Unit against Money Laundering (“SCUML”) of the Federal Ministry of Industry, Trade and Investment is empowered by the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations 2013, to register and monitor the activities of Designated Non-Financial Institutions (DNFI) in Nigeria, in collaboration with the Nigerian Financial Intelligence Unit (NFIU) and other professional bodies and regulators. DNFIs are expected to establish robust internal control and compliance mechanism, Customer Due Diligence Measures and to make appropriate reports to SCUML. In reality and for operational convince, the SCUML is domiciled in the EFCC.

By the provisions of the Money Laundering (Prohibition) Act 2011, any Designated Non-Financial Institutions (DNFI) that is involved in cash transactions is to provide declaration of its activities to the Federal Ministry of Finance. By that law, Designated Non-Financial Institutions (DNFI) are dealers in Jewelry, cars and luxury goods, chartered accountants, audit firms, tax consultants, clearing and settlement companies, legal practitioners, hotels, casinos, supermarkets, or such other businesses as the Federal Ministry of Commerce or appropriate regulatory authorities may from time to time designate. By the Terrorism (Prevention) Act 2011 and its later amendment in 2013, there are provisions for law enforcement to ensure terrorism is not funded.

In 2013, the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2013 expanded the meaning and list of business/professionals referred to as Designation of Non-Financial Institutions from what is provided in the Money Laundering (Prohibition) Act 2011. By the 2013 Regulations, adding to the existing list, DNFI extended to professions including (a) Law firms, notaries, and other independent legal practitioners; (b) Accountants and Accounting firms ;(c) Trust and Company Service Providers ;(d) Estate Surveyors and Valuers ; (e) Mortgage Brokers ; and (f ) Non-Profit Organisations. And also to businesses including; (a) dealers in precious stones and metals ;(b) dealers in Real Estate, Estate Developers, Estate Agents and Brokers; (c) hospitality Industry; (d) Consultants and Consulting Companies; (e) Construction Companies ;(f ) importers and dealers in cars or any other automobiles ; (g) dealers in mechanized farming equipment and machineries ; and (h) practitioners of mechanized farming.

On 15 December 2016, came the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2016. This 2016 Regulations was made by the Minister of Industry, Trade and Investment, following powers created by the Money Laundering (Prohibition) Act 2011. By the 2016 Regulations, the list of Designated Non-Financial Institutions (DNFI) was further expanded to include pool betting and lottery businesses.

By the 2016 Regulation, the list and meaning of Designation of Non-Financial Institutions (DNFI) includes dealers in jewelry, cars and luxury goods, Precious stones and metals, Real estate, Estate developers, Estate surveyors and Valuers, Estate Agents, Chartered accountants, audit firms, tax consultants, clearing and settlement companies, legal practitioners, hotels, casinos, pool betting and lottery business, supermarkets and such other business as undertaking as other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate.

It is important to note that, although legal practitioners and law firms are listed both by law and regulations as professionals and businesses that need SCUML certificate, the professional body of lawyers (Nigerian Bar Association) has obtained a valid court judgement against this requirement. The duties expected of legal practitioners under the Money Laundering (Prohibition) Act and its related Regulations, translate to lawyers divulging sensitive information about their clients. These are privileged information offered to lawyers under the Client-Lawyer Relationships and cannot be breached except in special circumstances. This is part of the fundamental human rights of a client; “Right to Private and Family Life”. Click to read more on the judgement protecting lawyers from SCUML Certificate.
 
 
My authorities are:

1. Section 37 of the Constitution of the Federal Republic of Nigeria 1999.
2. Sections 1, 2, 5, 6, 25 and 26 of the Money Laundering (Prohibition) Act 2011
3. Section 1, 40 and 41 of the Terrorism (Prevention) Act, 2011
4. Section 1, 4, 14, 14 and 20 of the Terrorism (Prevention) (Amendment) Act, 2013
5. The Central Bank of Nigeria (Anti Money Laundering and Combating of Financing of Terrorism for Banks and Other Financial Institutions in Nigeria) Regulation 2013.
6. The Nigeria Securities and Exchange Commission (SEC) and National Insurance Commission (NAICOM) AML/CFT Regulations for their respective operators.
7. Regulations 1, 2, 4, 33 and 34 of the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2013
8. Regulations 1, 2, 3, and 4 of the Federal Ministry of Industry, Trade and Investment (Designation of Non-Financial Institutions and Other Related Matters) Regulations, 2016
9. The Terrorism Prevention (Freezing of International Terrorists Funds and Other Related Measures) Regulations, 2013.
10. The National (Money Laundering & Terrorist Financing) Risk Assessment Forum, “NIGERIA ANTI MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM NATIONAL STRATEGY 2018 – 2020” (SCUML, 2018) accessed 24 August 2020.
11. Sections of 192 and 195 of Evidence Act
12. Rule 19(1) of the Rules of Professional Conduct for Legal Practitioners 2007
13. The judgement of the Federal High Court in the case of Registered Trustees of Nigerian Bar Association V. AGF & CBN (Suit No: FHC/BS/173/2014).
14. The judgment of the Court of Appeal in the case of CBN V. NBA & AGF (Appeal No: CA/A/202/2015).
15. The Nation, “Court Restraints Fed Govt, CBN SCUML from Enforcing Money Laundering Act on Legal Practitioners” (The Nation, 23 December 2014) accessed 23 August 2020
16. Toyin Nwiido, Interview with Ogwemoh Sylva, SAN (Commercial Law Development Services, July 2018) accessed 22 August 2020.
17. Onyekachi Umah, “Lawyers No Longer Need SCUML (EFCC) Certificate” (LearnNigerianLaws.com, 16 September 2020) accessed 17 February 2021.
18. Onyekachi Umah, “Legality of SCUML (EFCC) Certificate” (LearnNigerianLaws.com, 26 Augsut 2020) accessed 17 February 2021
19. Onyekachi Umah, “The Central Bank of Nigeria Notices on Cryptocurrencies; a Ban or a Banger?” (LearnNigerianLaws.com, 9 February 2021) accessed 17 February 2021.
20. Onyekachi Umah, “Lawyer’s Bank Account is Exempted from EFCC, SCUML, NFIU and Police Registration/Clearance” (LearnNigerianLaws.com, 19 June 2018) accessed 17 February 2021.

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