ANTI-MONEY LAUNDERING POLICY AND PROCEDURE MANUAL FOR CITILODGE HOTEL

POLICY

At CITIHEIGHT HOTEL we are committed to ensuring that our business is performed 

professionally for the avoidance of reputational risk and sustenance of integrity.

WHAT IS MONEY LAUNDERING?

Money  laundering is a process by which  criminals attempt  to hide  or disguise  the true  origin  and  ownership  of  their  ill  gotten  wealth.

“Money  laundering  is the processing  of  disguising  criminal  proceeds  from  their  illegal  origin”

-F A T F

Illegal sources of funds include:

Drug trafficking

Human trafficking

Kidnapping

Robbery

Fraud

Smuggling

Corruption

Tax evasion etc

Purpose of Money Laundering -To avoid prosecution, conviction and confiscation of ill gotten wealth.

STAGES OF MONEY LAUNDERING 

A complete money laundering operation can be analyzed in three stages:

Placement – this involves the injection of illicit funds into the financial and designated non financial systems through deposits, purchasing items of value, e.g. motor vehicles etc and payment for services.

Layering – this is the process of separating illicit proceeds from their source by creating complex layers of financial transactions designed to make it difficult to trace the origin of the illicit funds.

In other words, at this stage, criminals attempt to further obscure the trace of criminally generated funds. Examples include wire transfers, buying and selling of investible products, requesting for refund of deposit etc.

Integration – At this stage, the ill gotten funds are moved intothe main stream of the economy through legitimate economic activities such as investment, purchasing of shares etc. That is the illegal proceeds are re-integrated back to the economy.

OVERVIEW OF THE AML REGIME IN NIGERIA

Nigeria has a comprehensive AML legal frame work [Money laundering prohibition Act – MLPA] that prohibits the laundering of the proceeds of crime.

The MLPA has been amended severally to keep pace with the dynamism of money laundering

Starting with the MLPA, 2002 which extended the scope of offences, it was this law that extended AML obligations to non-bank financial institutions.

The  MLPA 2003 & 2004 provided a broader interpretation of financial institutions, expanded the scope of supervision of regulatory authorities and enhanced the customer identification procedures. This legislation also removed the threshold requirement on Suspicion Transactions.

The MLPA 2004 – for the first time this law incorporated as well as defined Designated Non Financial Institutions (DNFIs) and vested the regulatory responsibility of same on the Federal Ministry of Commerce.

The most recent legislation on Money Laundry is MLPA 2011 (as amended).

The enforcement of the MLPA is by the EFCC while the NFIU is the prime agency that ensures compliance with all AML law in the country. Federal Ministry of Commerce (FMC) through itsSpecial Control Unit on Money Laundering (SCUML) co-ordinate AML/CFT within the DNFIs in collaboration with the EFCC/NFIU.

BUSINESSES THAT CONSTITUTE DNFIs IN NIGERIA

DNFIs in Nigeria include:

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 business as the FMC may from time to time designate[see MLPA 2011 & SCUML  regulatory document for DNFIs]

Subsequently, the FMC designated dealers in precious metals and stones, trust and company service providers, estate agents, pool betting and lottery, Non Governmental Organization [NGOs] as DNFIs.

 OBLIGATIONS OF THE DNFIs UNDER THE AML REGIME IN NIGERIA

With the tightening of regulatory measures in the financial sector, money launderers are quickly shifting their operations to the DNFIs because of the weak AML culture within the DNFIs sector. This emerging trend presents a weak link in the campaign against money laundering.

The obligations of the DNFIs to help combat money laundering in Nigeria, includes:

Customer identification i.e. Know Your Customer – KYC –

[See FMC, KYC Guideline &MLPA 2011, S3].

DNFIs are required to establish and verify the identity of any person or entity and the nature of business they do before entering into business relationship with them.

Records preservations-

[see MLPA 2011 S7 & FMC Guideline for DNFIs ]DNFIs are required to maintain records of all transactions above threshold [N5 M – individuals, N10M- firms](CTR) for a period of at least five years after severance of business relationship.

Rendition of statutory reports [STRs and CTRs]-

[MLPA 2011 Ss 5 & 6, FMC Guideline require all DNFIs to file Suspicious Transactions Report [STRs] and Currency Transaction Reports [CTRs]to the NFIU within seven days of any transaction. Such reports should include

All transfer to or from Nigeria in excess of $10,000.00 or its equivalent must be reported to NFIU within seven days.

Other Obligations

      [MLPA 2011 S9,FMC&I Guidelines]

Limitation to make or accept cash payments – MLPA 2011S1, FMC Guidelines

DNFIs are not to make or accept cash payments in any single transaction in excess of N5M [Individuals] and N10M [corporate bodies] or equivalent except through a financial institutions. This to forestall illegal funds getting integrated into the economy.

Registration with FMC-

DNFIs are required to register with FMC. See FMC Guideline

This is for regulatory purposes only.

STRATEGIES FOR AML COMPLIANCE AT CITILODGE

 Registration with FMC

 Training/manpower development

 Sensitization and awareness creation

 Prompt reporting of CTR and STR to FMC through its SCUML

 Risk- based approach

 Routine check or investigative check on registration procedure at the front office 

 Cooperation with competitors, regulatory authorities and international agencies

CONCLUSION

The cost of non compliance is by far more than the cost of compliance. Accordingly, we at CITIHEIGHT have put in place appropriate measures to ensure full compliance with the laws and regulations that impact on our operations.