In October 2025, the Financial Action Task Force (FATF) recognized Nigeria’s significant progress in strengthening its anti-money laundering (AML) framework and announced that the country was no longer subject to increased monitoring. The intergovernmental organization, founded in 1989 at the initiative of the G7 to develop policies to combat money laundering and promote their effective implementation, highlighted key improvements in Nigeria’s legal and regulatory frameworks for tackling financial crimes, increased enforcement capabilities, and improved cooperation between the Central Bank of Nigeria (CBN), other regulatory bodies, and financial institutions to ensure compliance with AML regulations. Nigeria’s progress is the result of a concerted effort by multiple agencies and stakeholders, including the Nigeria Customs Service (NCS).

What constitutes money laundering offences in Nigeria? Under Nigerian law, money laundering occurs when a person or company, inside or outside Nigeria, engages in (1) concealing or disguising the origin of; (2) converting or transferring; (3) removing from jurisdiction; or (4) acquiring, using, retaining, or taking possession of funds or property, knowing they are partly or wholly proceeds of an unlawful act.[2]

These “unlawful acts” include participation in organized crime; racketeering; terrorism and terrorist financing; illegal drug and psychotropic substance trafficking; illicit arms trafficking and trafficking of stolen goods; counterfeiting and piracy; environmental crimes; smuggling; tax crimes; and any other unlawful acts in Nigeria, whether committed locally or elsewhere.

Criminal proceeds are frequently and increasingly moved from one country to another, which gives law enforcement authorities – and Customs administrations in particular – the opportunity to intervene to confiscate those proceeds and/or prosecute criminal offences.

The NCS pays particular attention to two typologies of alleged money laundering and/or terrorist financing schemes that relate to Customs competency, namely:

• Illicit physical movement of currencies and other negotiable instruments: in compliance with the FATF Recommendations, regulations in Nigeria also require the declaration to Customs of cash or bearer negotiable instruments (BNIs) exceeding $10,000 or its equivalent. Violations of the declaration requirement are criminal offences subject to forfeiture, a prison term, or both.
• Trade-based money laundering (TBML) and money laundering activities related to cross-border predicate offences. TBML involves disguising criminal proceeds by moving money through trade transactions to legitimize illicit origins. Defined by the FATF, TBML uses trade as a conduit, not for its own sake, employing fraudulent documentation, misrepresenting prices or quantities, using shell companies, phantom shipments and transfer pricing, and abusing payment systems outside Customs control.

To combat money laundering and terrorism financing, the Nigeria Customs Administration has a specialized unit that coordinates all anti-money laundering and terrorist financing (AML/CTF) activities. It implements the cross-border currency declaration system, detects and investigates TBML activities, and serves as a liaison for collaboration and coordination with the FIU, police, tax authorities, and other stakeholders. Internally, the unit acts as the focal point for AML efforts, supporting operational departments’ requisite capacity and coordination to identify and address ML activities.

Over the years, personnel of the unit have developed expertise in intelligence gathering, passenger profiling, trade analysis, and investigative techniques, including using open-source profiling and virtual asset tracing tools. All officers undergo a basic course upon deployment, and routine on-the-job training. Currently, the unit has over 100 officers, with activities coordinated at headquarters and some, such as currency declaration, decentralized to border posts.

The specialized unit conducts the following activities:

• Administration of the currency declaration/reports: officers of the unit are trained and deployed to administer the currency declaration system at clearly designated points within the Customs zone at various border posts. The NCS has transitioned to an automated declaration process, in line with the Service’s modernization drive. Officers of the unit are trained to assist travellers (only where necessary) carrying cash or BNIs above the statutory threshold in scanning the electronic QR code and completing the declaration process. The currency declaration system also covers shipments transported by postal operators and express carriers.
• Cross-border currency analysis and intelligence reports: the NCS operates an automated currency operations monitoring centre at NCS headquarters. It reviews all declarations and traveller manifests in real time to generate intelligence and support field operations. Analytical tools, such as Microsoft Power BI, help produce targeted reports that show trends and risk grades for routes, carriers, and destinations associated with money laundering offences. These reports analyse travel frequency, non-compliance history, links to money launderers, and criminal records.
• Analysis of advance passenger information (API): the Nigerian API, managed by the Nigeria Immigration Service, provides advance traveller movement intelligence, allowing Customs to target and arrest potential travellers on a watch list with greater precision. Other law enforcement agencies can access it with approval.
• Submission of suspicious transactions/activity report to the FIU, and use of financial intelligence: the unit serves as the AML/CTF liaison, coordinating intelligence sharing, training, and other engagement with the FIU.
• Review of suspected TBML cases reported by field offices, including trade mis-invoicing, phantom shipments, diversions, and criminal shipments.
• Case management and coordination for ML offences linked to cross-border crimes such as smuggling, environmental crimes, and narcotics: the unit guides relevant departments on managing high-profile interceptions and seizures, ensuring integrated financial investigations for ML. Notably, success has been seen in illegal wildlife trafficking via Nigeria’s ports to Asia. Drug cases are usually transferred to the Anti-Narcotics Agency.

While on the FATF list of Jurisdictions under Increased Monitoring (also known as the FATF “grey list”), the NCS AML Programme received support from several international bodies, including the FATF, WCO, and Inter-Governmental Action Group against Money Laundering in West Africa (GIABA). Through engagement, they gained guidance on updating Standard Operating Procedures, internal coordination, and collaboration with other agencies.

The WCO Secretariat supported the NCS as part of the activities carried out under Projects OCTAGON and TENTACLE. The NCS, a core member of Project OCTAGON, also participates in peer reviews and is currently preparing for a WCO mentoring mission, during which WCO experts will review and advise the AML/CTF Unit on how to further improve its processes and practices.

The NCS supported and significantly contributed to Nigeria’s AML reform by strengthening Customs’ legal and regulatory frameworks, completing the National Risk Assessment (NRA), and implementing key measures under the FATF International Co-operation Review Group (ICRG) Immediate Outcome action plan.

Specifically, Customs led the implementation of measures related to the cross-border currency declaration regime:

1. A thorough ML risk assessment was performed, profiling border posts. Results showed that international airports are high risk for bulk cash movements, while land borders and seaports are susceptible to trade-based money laundering. This categorization helps prioritize the deployment of trained personnel and measures.
2. Standard Operating Procedures were reviewed and updated to clarify the roles, functions and responsibilities of units and staff. The review eliminated doubts, uncertainty, and overreach that had previously complicated enforcement, investigations and prosecutions.
3. Non-intrusive inspection (NII) equipment was deployed to ensure systematic scanning of baggage and cargo at the borders.
4. An electronic currency declaration system was launched by the NCS in 2025 to address inefficiencies, such as delays in the manual process. The electronic system has significantly reduced processing time, improved integrity, and increased efficiency.
5. Specialized ML training for frontline officers and other agencies covers passenger profiling, collaboration, and investigation techniques.
6. Sensitization and awareness campaigns were conducted through signage, jingles, and media outreach to inform the public about existing regulations and penalties.

As expected, these efforts paid off, with remarkable outcomes: currency declarations increased by over 120% from 2024 to 2025, and only about 18 declaration violations occurred in 2025.

Couriers mainly conceal cash in hand-carry or luggage. We have selected two interesting cases to illustrate how we work. The first case involves a Nigerian national who was travelling back from the Middle East and had been placed on a watch list, based on operational intelligence. The API system monitored her journey and, upon arrival in Nigeria, her movements were closely watched. Although a Customs official reminded the traveller of the need to make a declaration if she was carrying cash above 10,000 USD or its equivalent, she said that she had nothing to declare. After the mandatory screening, the traveller was taken in for an enhanced search, during which carefully cellophane-wrapped bundles of various currencies, totalling 1,154 USD and 135,900 SAR (about 9,659 USD) were found concealed among “dates fruits” in the accompanying luggage.

The other case involved an outbound traveller heading to Europe, who was flagged for an enhanced search after suspicious behaviour was observed during the cabin bag screening process. During the search, Customs officials found bundles of currency wrapped in envelopes concealed in various compartments of the bag, totalling about 800,000 USD and 650,000 EUR.

In all cases detected by Customs, investigations are properly conducted, and penalties range from outright forfeiture of involved to possible imprisonment. In the two cases above, the suspects were prosecuted and convicted, and the funds were fully forfeited to the Federal Government of Nigeria, as stipulated by the relevant provision of the Money Laundering Act.

NCS vigilance and enforcement operations have continued to disrupt illicit trade, thereby serving as predicate offences for cross-border money laundering. These operations, encouraged by the WCO, cover disruptions linked to criminal wildlife trafficking, drugs and narcotics.

In a wildlife trafficking case, the NCS led a multi-agency task force that dismantled a cross-border syndicate. Illicit goods were seized, criminals arrested, prosecuted and convicted, and their assets were confiscated. The syndicate was falsifying Customs export documents, describing protected wildlife as “dried fish” and “Ginger”, and was using front companies registered as exporters of agricultural and seafood products. They had set up shell companies (i.e. entities without active operations, to obscure ownership) and transferred money through foreign remittances, wire transfers, and bureau de change (BDC) operators. They also laundered funds through buying real estate in Nigeria and abroad.

Similarly, the “follow-the-money” approach is being applied to all drug seizures. According to the AML National Risk Assessment, drug and narcotics offences are rated high in Nigeria, hence the policy of integrated financial investigation for all drug cases. The NCS plays an important role in detecting and seizing these illicit substances during border enforcement, and supports the National Drug Law Enforcement Agency (NDLEA), which conducts investigations, prosecutions, and asset recovery. Observed modi operandi include concealing drugs in used vehicles and household items (furniture, kitchenware, etc.), falsifying import documents, and using front and shell companies to obscure and evade detection.

TBML shares many similarities with other offences that exploit the trade system, such as Customs fraud or the evasion of trade sanctions. TBML and other types of fraud can occur simultaneously, making it difficult to identify a TBML scheme. Moreover, there are no limits to the types of commodities or the variety of techniques that can be used for TBML. A challenge for Customs, therefore, is the lack of awareness and skills to suspect infractions which go beyond fraud and extend to potential ML activities. The NCS has identified this challenge and is conducting routine capacity building and sensitization for its frontline officers to report suspected cases for review and investigation. In a particular case referred to the NCS AML/CTF Unit from the port, investigations showed how simple mechanical tools and signal devices were outrageously over-invoiced, and the criminal use of shell companies to make import payments (consistently for all imports) to a third-party shell company (which was not the actual supplier of the goods) and to a high-risk money laundering jurisdiction.

Taken together, therefore, in order to effectively curtail and combat TBML, it is necessary to raise awareness among frontline officers regarding ML techniques. Enhancing data analytics will also be critical. To assess potential money laundering risks, Customs risk management systems must be reviewed and updated to incorporate financial intelligence for interpreting Customs and trade data.

Some of the challenges encountered by the NCS in combating cross-border money laundering include:

• Information fragmentation with Customs and financial institutions and other LEAs: whereas Customs hold the commercial trade data, the underlying transaction records are held (outside the view of Customs) in financial institutions that do not see the goods. Other domestic LEAs also have records of predicate crimes but these are aslo outside Customs’ view and are rarely shared due to very protective information sharing policies.
• Inadequate or overlapping regulatory mandates among some authorities sometimes result in rivalry and a lack of clarity about actions. Cooperation agreements and joint investigation mechanisms for cross-agency cases will help strengthen effectiveness.
• The financial exclusion of part of the population and the use of informal payment systems by informal traders: Customs sometimes cannot link a trade transaction to a money transaction. There is therefore a need to reduce the informal economy and the use of informal service providers as a risk-mitigating measure. Efforts by the Central Bank of Nigeria to leverage on the rise and acceptability of digital payment platforms should be sustained and expanded to cover regional cross-border trade transactions.
• The prevalence of poverty and high unemployment among cross-border rural communities is pushing young individuals into becoming willing tools for criminal networks, including money launderers.
• Financial resource constraints which hamper the acquisition of cutting-edge technological tools and platforms, such as drones for surveillance of activities taking place in remote or very large territorial areas.

 Perspectives

The fight against money laundering is an ongoing effort. One area of work identified by the NCS to enhance the efficiency of its operations in this domain is greater collaboration and coordination with the FIU. International cooperation with peer Customs administrations on coordinated intelligence sharing and enforcement will also be very helpful. Internally, the NCS should consider integrating methods used to combat illicit financial flows, such as the Price Filter Method (PFM) which can highlight adverse trade mis-invoicing, into its automated cargo risk management system. It should also be intentional about sensitizing its frontline officers to suspect activity that goes beyond mere commercial fraud, revenue infractions, and recovery and extends into ML activities.

More information
salihu.safiyanu@customs.gov.ng

[1] This list identifies countries that are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolving swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the grey list. Source: https://www.fatf-gafi.org/en/countries/black-and-grey-lists.html, consulted on 22 April 2026.