In March 2019, SPACES FOR CHANGE | S4C released the report, Unpacking the Official Construction of Risks and Vulnerabilities for the Third Sector in Nigeria, which independently analyzed the findings of the 2016 national risk assessment (Nigeria NRA) on money laundering (ML) and terrorist financing (TF) risks in Nigeria. The Nigeria NRA identified Designated Non-Financial Institutions (DNFIs) as one of those sectors most vulnerable to ML and TF risks. Despite not being subset of DNFIs in the Financial Action Task Force (FATF) Standards, Nigerian regulations designate non-profit organizations (NPOs) as a subset of DFNIs.
S4C’s report interrogated the applicability of the stringent security measures espoused in anti-money laundering and countering financing of terrorism (AML/CFT) legal regimes to the non-profit sector in light of the FATF’s revised Recommendation 8 (R8) and FATF’s Best Practices Paper, paragraph 35 in particular. The report concluded with an assessment of the adequacy of the existing legal and regulatory framework for combating ML/TF risks in the non-profit sector.
S4C’s report has generated a robust debate and very meaningful engagement between AML/CFT stakeholders, including federal regulators, philanthropic bodies and non-profit organizations (NPOs) in Nigeria. Private meetings, focused group discussions and a multi-stakeholder meeting held in Abuja on June 20, 2019 are examples of the logical follow-up steps initiated by various stakeholders towards discussing and addressing the key issues raised in the report.
SPACES FOR CHANGE makes the following update in light of the new information garnered from the extensive stakeholder engagements attending the March 2019 report.