COMPLIANCE IMPERATIVES: What Financial Institutions Should Know About the Nigerian Financial Unit Suspicious Transaction Reporting Guidelines

On 13 December 2024, the Nigerian Financial Intelligence Unit (the “NFIU”) issued the Guidelines for the Identification, Verification and Reporting of Suspicious Transactions Related to Money Laundering, Financing of Terrorism, and Proliferation of Weapons of Mass Destruction (“ML/FT/PF”) for Financial Institutions (the “STR Guidelines”).

These Guidelines are a significant development aimed at enhancing the control measures put in place by financial institutions by requiring these institutions to generate and file adequate Suspicious Transaction Reports (“STRs”). Transactions are deemed “suspicious” when they involve frequencies which are unjustifiable or unreasonable, surrounded by conditions of unusual or unjustified complexity, lack economic justification or lawful objectives, are inconsistent with the known transaction pattern of the relevant account, or in the opinion of the reporting institution, involves the proceeds derived from criminal activities, money laundering or terrorist financing?

This article examines the key provisions of the STR Guidelines and its impact on the operations of financial institutions.