Nigeria - Threat Assessment 2020 - Page of 1 - Financial Crime News

Nigeria - Threat Assessment - 2020 Page 1 of 32

Sanctions & Terrorism: No comprehensive
 Nigeria sanctions against the country. In 2019, for
 proliferation, Tier 2 PP Index country with a
 Section 1 - Executive Summary “Moderate” response score of 335/1,300;
 Global Terrorism Index 2019 reported “High”
Grey Lists: Nigeria is listed by the US as a
 impact and a score of 8.597/10. Nigeria is
“Country of Primary Concern” in respect of ML
 included in US Country Reports on Terrorism.
& FC. Nigeria is no longer on the FATF List of
countries, nor are they included in the EU Modern Day Slavery: US Traffi cking in
Commission’s list of AML/CFT defi cient Persons 2020: Tier 2 Country (Watchlist);
countries. Global Slavery Index 15/51 African countries.
 According to the Global Slavery Index (GSI)
NRA: Nigeria published its fi rst NRA in 2017, it
 2018, the population of the people in slavery
reported the most prevalent predicate
 in Nigeria is 1.4 million, (incidence of 7.7/1000
offences as (i) bribery and corruption; (ii)
 people), more than the total number of all the
pipeline vandalism and illegal oil bunkering
 other 16 West Africa countries, combined.
(iii) advance fee fraud (iv) Illicit drugs, & v) arms
traffi cking. Resilience: Nigeria has a “Resilience" score of
 5.67/10 in the OC Index and is ranked 8/54
Corruption: TI CPI 2019 rank of 146/180, with
 African countries and 3/15 West African
a score of 26/100. The lowest score in the
 countries. A MER 4th round country review is
decade was in 2013 at 25/100 improving to 26
 expected in the coming years.
in 2015 and the highest score of 27 in 2017.
Overall bribery rate (according to TI/ Indices: The Mo Ibrahim Index of African
Afrobarometer Survey - 2019) was at 44% (no Governance for 2018 rated Nigeria at an
of users of public service paid a bribe in the overall governance level of 47.9 /100 &
previous 12 months), with the Police perceived Freedom House’s Freedom in the World
as the most corrupt (69%). Report 2019 - a score of 47/100, categorised
 “partly free”.
Organised Crime: According to the OC Index,
Nigeria has the highest level of “criminality” in Overall Ratings: Nigeria is rated overall
Africa with a score of 7.70/10. The OCI ranked “High” Risk,13th highest score out of 14 West
Nigeria’s criminal markets, as follows: human African countries & 29th highest score out of
traffi cking 8.5/10, human smuggling 7/10, 40 overall with a score of 34/100, but with an
arms smuggling 7.5/10, Illegal logging 7.0/10, “Improving” trend.
illegal wildlife traffi cking 8.0/10, non-
renewable resources 9.0/10, and drug
 FCN Rating:” High” Risk 34/100
traffi cking - heroin 6.5/10, cocaine 6.5/10, “Improving” Trend
cannabis 8.0/10 and synthetic drugs 8.5/10.
 Nigeria - Threat Assessment - 2020 Page 2 of 32

Section 2 - Country Dashboard

 Nigeria ↗ Improving
 Capital & Population: Abuja / 214 million approx
 Political Leader: Muhammadu Buhari, President (since 2015)
 GDP: US$376 billion - 2018 (23% of SSA GDP)
 Economic Sector Breakdown: Agri (21%), Ind (22.5%), Services (56.4%)
 Exports: US$34.7 billion (2016 est) of mainly petroleum & petroleum products
 95%, cocoa, rubber to India 30.6%, US 12.1%, Spain 6.6%, China 5.6%, France
 5.5%, Netherlands 4.4%, & Indonesia 4.4% (2017).
 Imports: US$32.67 billion of machinery, chemicals, transport equipment,
 manufactured goods, food and live animals from China 21.1%, Belgium 8.7%, US
 8.4%, South Korea 7.5%, UK 4.4% (2017).

 Score: 34/100 “High” FCN Risk Rating Proceeds / Laundering
 (Average Country Score is 32 - SSA)

 Rank: 29/40 SSA - 13/14 Region WA range 9.5% - 11.5% GDP / 50-60% of Proceeds

 Organised Crime Costs of Corruption
 range up to approx 36 - 38% of Proceeds range up to approx 15 - 20% of Proceeds
(Foreign Actors 7.5/10, State Embedded 8/10, Criminal Networks 9.5/10 & Mafia Style 6/10)

 Nigeria Higher (Inherent) Risk Factors Total Criminal Proceeds in Sub
 Saharan Africa in US$ Billions - FCN
 Customer Sector Geography 2020 (not including fraud and
 Risks Risks Risks corruption and tax evasion)
Customers with elevated Banks (in particular Retail Country Neighbours;
 exposures to Criminal and Correspondent Major Export / Import
 activities such as: Banks), Bureau de- Partner Countries (Trade
 bribery and corruption, Change, MSB’s, MMO’s, Mispricing and IFF’s)
 Mining Fishing
 pipeline vandalism and Gambling Operations & -
 10 2.5
Illegal oil bunkering and DNFBP’s (Law & Third Countries Wildlife
 advance fee fraud have Accounting Firms, US, Brazil, China, Thailand, 2 Goods Piracy
 been identified as the Jewellers & Trust & Co Indonesia and the Balkans 9
most prevalent predicate Service Providers) & Car (Stolen Nigerian oil)
offence where ML threat Dealers
 was rated High (NRA). China & Vietnam (Wildlife Logging
 Hotels & NPOs Products), India (Fake 12.5
 Modern Slavery
 Also: drug trafficking, Drugs)
 8.3
 wildlife trafficking & Informal Sectors
human trafficking - OC UAE, China, Malaysia,
 Index Hawala Hong Kong, South Africa Drugs
 & UK (illicit inflows - NRA) 3
 Theft
 to Higher Risk Sectors & Benin, Togo & Israel 15
and/or Geography Risks (illicit cash outflows - NRA)

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 Nigeria - Threat Assessment - 2020 Page 3 of 32

Section 3 - Country Information

People & Geography: Nigeria is often translated into a signifi cant decline in poverty
referred to as the "Giant of Africa", as it has levels, with over 62% of Nigeria's over 180
Africa’s largest economy and is Africa’s most million people still living in extreme poverty2.
populous country with an estimated 214 Exports of US$34.7 billion (2016 est) of mainly
million people (July 2020 estimate), with 52% petroleum and petroleum products (95%),
living in urban locations, the largest in Lagos - cocoa, rubber to India (30.6%), US (12.1%),
which has a population of over 15 million. Spain (6.6%), China (5.6%), France (5.5%),
Nigeria received an estimated 1.3 million Netherlands (4.4%), & Indonesia (4.4%) - 2017.
immigrants / 1.4 million emigrants in 2019.1 Imports of US$32.67 billion of machinery,
 chemicals, transport equipment, manufactured
Recent History & Leadership: Nigeria gained goods, food and live animals from China
independence from the UK in 1960. Regional (21.1%), Belgium (8.7%), US (8.4%), South
hostilities were a feature of independent Korea (7.5%), UK (4.4%) - 20173.
Nigeria with almost continuous unrest and
then a rebellion in1966, and a civil war that Environment: According to the Environmental
ended in 1970. Nigeria, relying on its large Performance Index 20184. Nigeria scores
reserves of oil, generates signifi cant wealth, 43.41/100 and is ranked 149/180 countries.
but with this wealth comes corruption, which is Nigeria's Delta region, home of the large oil
endemic in Nigeria. Military coups and military industry, experiences serious oil spills and
leaders fi nally gave way to presidential other environmental problems, which has
elections in 1999. In 2015, and in 2019, former caused conflict. Waste management, including
military leader, Muhammadu Buhari, was sewage treatment, deforestation and soil
elected president. He campaigned as a born- degradation, and climate change are also
again democrat, vowing to root out corruption, problems.
revive the economy, and defeat the Islamist
Boko Haram insurgency. Finance: In Nigeria5, 39% of people (over 15)
 have bank accounts, 2.6% have a credit card,
Economy & Trade: Nigeria is Sub-Saharan 5.6% have a mobile money account & 6.3%
Africa’s largest economy with a GDP of US$376 make online payments. Internet penetration is
billion, relying heavily on oil as its main source at 42% via 85 million internet users, and there
of foreign earnings and government revenues. are 169 million mobile connections or 83% of
Beyond petroleum, Nigeria’s economic growth people are connected by mobile. Foreign
has been driven by growth in agriculture, remittances6 received of 23.8 billion / 5.3% of
telecommunications, and services. Economic GDP (2019).
diversifi cation and strong growth have not
 Nigeria - Threat Assessment - 2020 Page 4 of 32

Section 4 - Country Ratings & Country Threats Heat Map

 Source Nigeria Source Nigeria Source Nigeria 

 World Economic Forum 47.5 / 100 Transparency International (TI) 26/100 Proliferation Index - PPI Tier 2
 Organised Crime Index* Corruption Perceptions Index* (146/198) Threat Moderate Threat

 OC Index 7.7/10 TI & Afrobarometer 44% Proliferation Index - PPI 335/ 1300
 Criminality* Citizens Views and Experiences of Corruption Overall Bribery Rate Controls* Low Controls score
 Report

 OC Index 7.75/10 TRACE 65/100 Global Terrorism Index “High” Impact
 Criminal Actors Bribery Risk Matrix (2019) GTI - Impact* 8.597

 OC Index 8/10 Global Slavery Index 7.7/1,000 US Dept of State Yes
 State Embedded Actors GSI Incidence* Incidence Country Reports on Terrorism*

 OC Index 9.5/10 Global Slavery Index 1.4 million Global Cybersecurity Index O.650/10
 Criminal Networks No of estimated Modern Day Slaves Estimated numbers of modern day 2018 (57/152)
 slaves

 OC Index 7.5/10 Global Slavery Index “B” Rating Mo Ibrahim Governance Index 47.9/100
 Foreign Actors Country Response Rating* (Ratings: AAA, AA, A etc) (49.9 - All Africa)* (33/54) Rated “Increasing
 Improvement”

 OC Index 6/10 US Dept of Labor 14 million - 31.1% Freedom House 47/100
 Mafia Style Gangs Child Labour (children aged 5-14 work) Freedom Index* “Partly free”

 OC Index Synthetics 8.5/10 US Dept of State Tier 2 Rated Watchlist Heritage Foundation 57.2/100
 Drugs Trafficking Cannabis 8/10, Cocaine& Heroin Trafficking in Persons* Economic Freedom Index “Mostly Unfree”
 6.5/10

 OC Index 7.5/10 IOM Migration E - 1,400,000 / I - 1,300,000 Basel AML Index* 6.89/100
 Arms Trafficking E - Emigration / I - Immigration

 OC Index 7/10 Illegal Unreported and Unregulated 2.39/5 FIU Egmont Yes
 People Smuggling (IUU) - IUU Fishing Index Member (Suspension lifted in 2018)

 OC Index 8.5/10 EU Listing of Countries for Illegal Not Included Interpol Yes
 Human Trafficking Fishing Member

 OC Index 7/10 US DoS - Wildlife Trafficking Focus Country Asset Confiscations Estimated below 1%
 Illegal Timber Focus / Countries of Concern* over 1% of Proceeds*

 OC Index 8/10 Environment Performance Index 54.76/100 Country National Risk Assessment* 2017
 Illegal Wildlife 105/180 Published

 OC Index 9/10 EUIPO & OECD Counterfeit Goods 0.410 Financial Information Sharing No
 Illegal Mining Propensity of Exports (2016) Partnership

 OC Index 5.67/10 Tax Justice Network Not Included US Dept of State Yes
 Resilience* Financial Secrecy Index INCSR Vol I & Vol II*

 OC Index 6/10 EU List of None Co operative Not Included European Union List* No
 AML Jurisdictions for Tax purposes

 OC Index 6/10 OECD - Global Forum Largely Compliant FATF Standards Not Yet Available
 Law Enforcement on Transparency & Exchange Info for Tax Purposes 40 Recommendations*

 OC Index 6.5/10 Global Financial Integrity US$400 million - 15.53% (2017) FATF Standards Not Yet Available
 International Co- operation Illicit Financial Flows* 11 IO’s on Effectiveness*

 OC Index 6/10 Embassy’s from N Korea, Syria, Iran Syria, Cuba & North Korea FATF Standards Not Yet Available
Economic Regulatory Environment or Cuba Core 10 Recommendations

Illegal Drug Dependency / Disorders 802,669 - 0.46% Embargoes - Country Sanctions None FATF Standards Not Yet Available
 Number/Share (Comprehensive - UN, US, EU, UK) Core 4 IO’s on Effectiveness

 Numbeo Crime Survey 2020 63.77 OFAC Listed Parties 13 Local addresses FATF No
 with Local Addresses Counter - Measures
 Strategic Deficiencies List*

 * Symbol Indicates the information is included in the FCN Country Index

 FCN Final Ratings - Nigeria 

 Financial Crime News “Extremely High” Financial Crime News “High” Risk - 34/100
 Threat Rating 18/100 Financial Crime Rating 29/40 SSA - 13/14 WA

 Financial Crime News “Mod - High” Response Trend Improving
 Response Rating 50/100 (TI CPI, Mo Ibrahim, FATF, Basel Index & GTI - 3-5 years)

 Nigeria - Threat Assessment - 2020 Page 5 of 32

Section 4 Continued - Country Threats Heat Map

There are many threats that affect Nigeria, which are in most part targeted towards its resources,
the people, crops, wildlife, precious metals and forests. The effect of endemic corruption increases
the threats and reduces the ability to effectively respond. For more details in summary form see the
figure below.

 Nigeria - Threat Assessment - 2020 Page 6 of 32

Section 5 - Key Threats

In this Section 5, the most important criminal Department as a Country/Jurisdiction of
markets, are assessed and summarised based Primary Concern in respect of Money
on available sources. Laundering and Financial Crimes in its 2019
 report8.
5.1 National Risk Assessment (NRA): Nigeria
published its fi rst NRA7 in 2017, it reported as Country of Primary Concern
“High” ML threats, bribery and corruption, US INCSR - 2019

pipeline vandalism / Illegal oil bunkering and
advance fee fraud, with “Medium” threats for Despite the various measures taken by the

fraud and forgery, human smuggling and Nigerian government to combat financial

trafficking, drug trafficking, and arms crimes, the report9 states that, “Nigeria is a

trafficking. major drug trans-shipment point and a
 significant centre for financial crime and cyber-
 Corruption, pipeline vandalism and illegal oil crimes. Nigeria has made concerted efforts in
 bunkering, advance fee fraud - highest FC
 recent times to address some of the challenges
 threats
 National Risk Assessment - 2017 it faces, implementing its AML/CFT regime. The
 Nigerian Financial Intelligence Unit (NFIU) is
The NRA also highlighted that “proceeds now independent of the Economic and
generated from criminal activities outside the Financial Crimes Commission (EFCC) and its
country are laundered in Nigeria using different Egmont Group membership has been restored.
mechanisms in order to hide their illicit origin While systems exist for combating money
including trade-based ML, Foreign Direct laundering and associated predicate offences,
Investment (FDI), direct wire transfers, physical the Nigerian government must take steps to
cash transportation, proceeds from drug strengthen them and to institutionalise best
trafficking” etc, identifying the “UAE, China, practices in financial intelligence management,
Malaysia, Hong Kong, South Africa and UK as investigation, and prosecution.”
posing a significant threat to Nigeria in terms of
illicit proceeds inflow”, with countries of 26 out of 100 score and ranked 148 out
 180 Countries for Perceptions of
concern regarding cash outflows being “Benin
 Corruption
Republic, Republic of Togo and Israel due to
 TI’s CPI 2019
the high volume of funds movement from the
said countries to the Middle East through some 5.3 Corruption: The 2019 Transparency
Nigerian land borders and airports”. International (TI) Corruption Perceptions Index

5.2 US INCSR: Nigeria is listed as one of 80 ranks Nigeria 146/180, with a score of 26/100,

countries categorised by the US State a score below 50 is indicative of a country

 Nigeria - Threat Assessment - 2020 Page 7 of 32

struggling with corruption issues. The lowest believing that most or all police are
score in the decade was in 2013 at 25/100 corrupt, with 47% of the respondents
improving to 26 in 2015 and the highest score using police services reported having
of 27 in 201710. paid a bribe to the police, up from 45%
 recorded in 2015.
 TI - CPI Scores - 
 (Scores out of 100 - Lower scores are better)
 • Overall bribery rate was at 44%, namely
 that 44% of users of public service paid
 a bribe in the previous 12 months.
 25.0 26.0 27.0 26.0

 • Nigerians also think that members of

 2013 2015 2017 2019
 parliament are highly corrupt (60%),
 followed by local government officials
Political corruption is a persistent (55%) and government officials (54%).
phenomenon in Nigeria. In 2012, Nigeria was In addition, 51% believe that judges
estimated to have lost over US$400 billion to and magistrates are corrupt.
corruption since independence11. The rise of
public administration and the discovery of oil • Although those Nigerians surveyed
 generally think that NGOs and business
and natural gas are two major events believed
 executives (44%) are less corrupt, 40%
to have led to the sustained increase in the
 of Nigerians surveyed were concerned
 TI & Afrobarometer Findings 2019 (% Survey) - 
 (Scores out of 10 - Lower scores are better)
 UNODC Survey 2019 % - 
 (Scores out of 100 - Lower scores are better)

 69.0

 43.0 44.0 45.0
 40.0 38.0
 30.2 29.0

 ”Increasing” ”Doing Badly” ”Paid Bribe” ”Most Corrupt” - Police
 ”paid bribes - av” “facilitation” ”speed up” ”avoid”

incidence of corrupt practices in the country. about corruption in the NGO sector.

According to TI & Afrobarometer’s Another survey in 2019 from the UNODC
Citizens Views & Experiences of on corruption in Nigeria13, reported the
Corruption, published in 201912: estimated figure of bribery (public bribes
 asked for and/or paid in the last 12
• 43% of Nigerians surveyed think
 months) at 30.2%, and that Nigerian
 corruption increased in the previous 12
 bribe-payers paid an average of 6 bribes
 months & 40% that the country was
 in the 12 months prior to the survey, or
 doing badly. Overall, the police service
 one bribe every two months. As a result,
 is considered the most corrupt
 it is estimated that some 117 million
 institution, with 69% of people

 Nigeria - Threat Assessment - 2020 Page 8 of 32

bribes are paid in Nigeria on a yearly The INCSR 2019 Report16 appears to support
basis, the equivalent of 1.1 bribes per Interpol’s view, stating that “despite the various
adult. According to the survey, almost measures taken by the Nigerian government to
one in two bribes (45 per cent) are paid combat financial crimes, Nigeria is a major
for the purpose of speeding up or drug trans-shipment point and a significant
finalising an administrative procedure. In center for financial crime and cyber-crimes.
a large share of cases, bribes are paid for Nigeria has made concerted efforts in recent
purely speeding up a procedure (38%), times to address some of the challenges it
while the share of bribes paid to avoid
 faces implementing its AML/CFT regime”.
the payment of a fine reached 21% in
2019. High Criminality - High Resilience
 OC Index - 2019
In October 2019, the Human Environmental
 According to the 2019 African OC Index17,
Development Agenda (HEDA) conducted
 Nigeria is considered as a “High-Criminality,
research that revealed that Nigeria has lost at
 High-Resilience” country.
least US$600 billion dollars to corrupt officials
since 196014. Successive governments have Criminality is rated at 7.70/10, Nigeria has the
introduced measures and strategies to counter highest level of criminality in Africa, not least
corruption in the country, such as the current due to its very high scores in almost every
effort of the anticorruption agencies and the criminal market assessed, as well as high
Federal Ministry of Justice, which charged scores across the different criminal actor
several high net worth individuals with
 OC Index Criminal Markets - Importance - 
corruption allegations before different courts (Scores out of 10 - Lower scores are better)

in Lagos and Abuja.

5.4 Organised Crime: According to Interpol’s 8.0 8.0 8.5 9.0 8.5
 7.0 7.5 7.0
Bureau15 in Nigeria, the country’s
“geographical location is attractive to
 Cannabis Wildlife HT Mining Logging Arms Synthetics People Smugg

organised crime groups either wishing to carry
 groups operating in Nigeria.
out smuggling operations across the region or
to cross it bound for other continents”. This is The OCI scored Nigeria’s criminal markets,
no doubt due to Nigeria’s location at the with the highest being: non-renewable
crossroads between West Africa and the resources 9.0/10 (oil bunkering), followed by
Sahel’s most violent conflict zone, where human trafficking 8.5/10, illegal wildlife
instability provides fertile ground for terrorist trafficking 8.0/10, arms smuggling 7.5/10,
groups and criminal networks. illegal logging 7.0/10, human smuggling 7/10
 & drug trafficking - heroin 6.5/10, cocaine
 6.5/10, cannabis 8.0/10 and synthetic drugs
 Nigeria - Threat Assessment - 2020 Page 9 of 32

8.5/10. The top criminal actor types in Nigeria Foreign Criminal Actors, “are also present to a
 significant degree in Nigeria. Several foreign
are “Criminal Networks”, scoring 9.5/10 and
 criminal entrepreneurs are active in the criminal
“State Embedded Actors” scoring 8/10 in the
 markets for arms trafficking, oil and gas, mining
OC Index.
 and practices associated with illicit financial
 OC Index - Criminal Actor Types - Importance - 
 (Scores out of 10 - Lower scores are better)
 flows (in particular, multinational corporate
 entities. Lebanese networks are known to be
 present in Nigeria (and across West Africa
 9.5 generally), and use their contacts within the
 8.0 7.5 7.1
 6.0
 diaspora and their import/export businesses to
 facilitate numerous types of trafficking, from
 Criminal Net State Embedded Foreign Mafia Style Overall
 gold to drugs. Mexican cartels also cooperate
According to the OC Index, “Criminal Networks with Nigerian businesses.”
are the overwhelmingly dominant form of
criminal entrepreneurship in the country. Loose Lastly, there are some Nigerian organised-

networks of opportunistic Nigerian criminals crime groups that have known names and

are a common occurrence in every state of identities. “Mafia-style” organised crime

Nigeria. These are involved in a large number groups “are predominantly active in illegal oil

of criminal markets, including armed banditry, bunkering, often with the protection of armed

kidnapping, burglary, carjacking and militant groups in the Niger Delta.”

smuggling of persons, drugs and other
 5.5 Modern Slavery: In the US Traffi cking in
contraband.”
 Persons (TIP) 201918 report, Nigeria is a Tier 2

State-Embedded criminal actors are country, an improvement from its position on

“widespread in Nigeria and corruption is rife, the Tier 2 Watchlist. Nevertheless, despite

and operate especially in criminal activities noted improvements, Nigeria does not fully

involving public procurement, and collusion meet the minimum standards for the

among national and multinational corporate elimination of trafficking, but is making

entities. While some measures have been taken significant efforts to do so.

to tackle corruption under the current
 An incidence of 7.7/1000 & total
administration, with some degree of success,
 numbers estimated at 1,386,000
corruption is pervasive at all levels of the GS Index - 2018
political apparatus. Individuals involved in
 Nigeria remains a source, transit and
criminal enterprises are known to have become
 destination country for human
involved in politics, but often after having
 trafficking. According to the 2018 Global
laundered their proceeds through licit
 Slavery Index19, Nigeria ranks 32/167 of the
enterprises.”
 countries with the highest number of slaves (an

 Nigeria - Threat Assessment - 2020 Page 10 of 32

incidence of 7.7/1,000), but globally in the top 5.6 People Smuggling: People smuggling
20 for absolute numbers at 1,386,000. routes, albeit identifi ed in 2011, continue to
 see signifi cant numbers in the move from West
Nigeria’s National Agency for the Prohibition of
 Africa, in particular to Europe, especially by sea
Trafficking in Persons (NAPTIP) Report20 in
 to the Canary Islands and the western
2017, identified the average age of trafficked
 Mediterranean routes (overland across the
children in Nigeria as 15. NAPTIP further
 Sahara to Morocco and Algeria) and then by
identified that 75% of those who were
 sea to mainland Spain; otherwise, overland to
trafficked within Nigeria are trafficked across
 Libya, and then by sea to Italy24. Whilst Europe
states, while 23% are trafficked within states.
 is a desired destination, the majority of those
Only 2% of those who are trafficked are
 reaching North Africa actually remain there
trafficked outside the country, according to
 rather than continuing across the
NAPTIP.
 Mediterranean. People smuggling is largely
According to ILAB21, (2019) goods produced controlled by, or involves, organised crime at
from child labour include cocoa, gold, granite, some part of the journey, in particular when
gravel, manioc & sand produced from forced trying to navigate across borders.
labour, but also including forced child labour.
 5.7.1 Environmental “Green Crimes: Illegal
ILAB reported 31% of children aged 5-14 work
 Mining including Oil Bunkering: The NRA25,
(over 14 million children).
 assessed the national ML threat of illegal oil
According to the OC Index22, “Nigerian human bunkering as “High”. Oil bunkering is theft
trafficking networks are notoriously well which “involves the stealing of crude oil and its
established, both across Africa and in other derivatives from pipelines through a variety of
parts of the world. Trafficking networks mechanisms, including illegal “bunkering” and
operating out of southern Nigeria (especially fuel pilfering.” The menace of pipeline
Benin City) specialise in sex trafficking, in many vandalism and illegal oil bunkering continue to
cases for exploitation domestically, in West blight the growth and stability of the Nigerian
Africa and in Europe. Other Nigerian networks economy.
specialise in trafficking, across the West African
 The impact of this criminal activity often forces
region, for labour exploitation, especially
 oil companies to shut down pipelines due to
trafficking of children for domestic work,
 damages caused by pipeline vandals.
begging, small commerce, mining and
 According to a 2013 report by Chatham
farming.”
 House26, oil thieves have many ways to
According to the NRA23, “the country is disguise funds including cash smuggling,
gradually being used as a hub and as a transit delayed deposits, use of middlemen, shell
point by drug traffickers and human companies and tax havens, bribery of bank
smugglers”. officials, laundering cash through legitimate
 Nigeria - Threat Assessment - 2020 Page 11 of 32

businesses and cash purchases of luxury Oil pipeline vandalism in addition to being
goods. It was further reported that carried out for illicit financial gain is justified as
neighbouring countries as well as the United an “avenue for expressing grievances against a
States, Brazil, China, Thailand, Indonesia and hostile and indifferent Nigerian state and the
the Balkans were destinations for stolen oil multinationals….Driven by populist
Nigerian oil, confirmed in part by a 2017 grievances against the state and the oil
report from the Atlantic Council which companies over resource equity, militants in
highlighted that approximately “30% of all the Niger Delta have taken up arms and
hydrocarbons products are smuggled into damaged pipelines and allied petroleum
neighbouring states27”. infrastructure29. Despite reconciliatory
 overtures to the leaders of the Niger Delta
The report also highlights that crimes
 region, a resolution is unlikely, and the illegal
associated with hydrocarbon crime (theft,
 bunkering in the region causing significant
fraud, smuggling, laundering, and corruption)
 losses to the Nigerian state seem likely to
is significant global and security threat. And
 continue.
said that “combating this pervasive criminal
activity is made only more difficult by the reality According to the OC Index30, “the most
that many of those in a position to curb pervasive criminal market in Nigeria is for non-
hydrocarbons crime are the ones benefiting renewable-resource crimes. This is explained
from it”. The report highlights additional by both the sheer range of commodities that
challenges related cases of police corruption are illegally traded and the overall reach of
and military collusion. these submarkets within the country. Oil
 bunkering is a major phenomenon in Nigeria
According to Accord’s28 2019 report on Oil
 and approximately 15% of the country’s oil
pipeline vandalism in the Niger Delta, “the
 production is lost, between 300,000 and
social conditions of the Niger Delta present a
 400,000 barrels per day, to oil theft. Oil is
context and pretext for oil-related crimes, which
 stolen directly from pipelines, refined through
include petroleum vandalism. The region is
 artisanal means, and sold in local and
characterised by high levels of poverty….There
 international markets. The criminal actors
is a high prevalence of material destitution, and
 carrying out the more highly organised
a lack of basic amenities – such as portable
 bunkering activities are heavily armed and have
water, of schools and electricity….The
 extensive links to foreign criminal actors.
incidences of environmental degradation
 Furthermore, illicit gold mining occurs in
arising from oil pollution have exacerbated the
 Nigeria, but the levels of illegal activity are
situation by making it almost impossible for
 lower than in other African countries.
rural dwellers to engage in sustainable farming
 Nevertheless, limited alternative livelihoods
and fishing, which used to be their traditional
 among local illicit gold mining occurs in
mainstay”.
 Nigeria - Threat Assessment - 2020 Page 12 of 32

Nigeria, but the levels of illegal activity are of pangolin scales (weighing 33.9 tonnes), and
lower than in other African countries. based on the estimated value in Singapore,
Nevertheless, limited alternative livelihoods worth more than US$100 million.
among local populations may make them
 5.7.3 Environmental “Green Crimes: Illegal
vulnerable to exploitation and co-option by
 Fishing: Nigeria is scored 2.39/5, as against
criminal groups in the illegal gold mining
 the world average of 2.29 and ranked 49/152
industry.”
 countries, 16/38 African countries, in the Illegal
5.7.2 Environmental “Green Crimes: Illegal Unreported and Unregulated Fishing Index35.
Wildlife Trade: According to the OC Index31, According to the OC Index36, ”Illegal,
“Nigeria is a major hub for fauna trafficking, unregulated and unreported fishing is also a
particularly for wildlife that is trafficked into major problem in Nigeria: the Nigerian Navy
Central Africa, and is a transit country, has reported that the country loses as much as
especially for ivory and pangolin scales U$70 million annually to the illegal practice.”
destined for Asian consumer markets. As
 5.7.4 Environmental “Green Crimes: Illegal
Nigeria has a small population of elephants
 Logging: The illegal trade in rosewood is
and pangolins, most of the trafficked parts
 probably the most lucrative form of wildlife
come from abroad.“
 crime, with demand high for luxury furniture
Nigeria is listed as 1 of 26 “Focus Countries” around the world, but particularly in China and
identified by the US State & Interior South East Asia. Having decimated most
Departments in the Eliminate, Neutralise, and rosewood forests in South East Asia and
Disrupt (END) Wildlife Trafficking Act32, Central America, criminals began focussing on
recognising Nigeria as a country with wildlife Nigeria for new supplies. Native West African
trafficking concerns. rosewood known as “kosso” – has most likely
 become the most traded tropical hardwood
The UNODC33 in 2019, highlighted cases of
 species in the world, despite its listing as a
seized ivory and pangolin scales in Asia which
 threatened species by CITES (Appendix III in
led back to Nigeria, though whilst these were
 May 2016 & then Appendix II effective January
unlikely to originate from Nigeria, it appeared
 2017). According to a report by the
that Nigeria was “acting as a transit hub for
 Environmental Investigation Agency (EIA) in
illicit wildlife products, including pangolins,
 201737, “most of the billions of dollars worth of
elephant tusks and other protected species,
 wood exported by Nigeria over the past four
destined for countries in Asia as well as Europe,
 years was illegal: harvested and/or exported in
the Middle East and North and South America”.
 contravention of state and/or federal laws. The
In September 2019, Reuters34 reported that rosewood trade may have benefited the
within that year Hong Kong and Singapore terrorist group Boko Haram.”
have intercepted three shipments from Nigeria
 Nigeria - Threat Assessment - 2020 Page 13 of 32

Key findings in the EIA report also revealed end-of-life e waste into Nigeria, weak testing
that “evidence strongly indicates that over 1.4 systems at Lagos ports mean smugglers can
million kosso logs, worth about US$300 sneak their consignments in. A large
million, were stopped by Chinese customs percentage of used technology shipped into
officials in 2016, then released in 2017, after Lagos finds its way to central Lagos, known as
Nigerian CITES authorities retrospectively “Computer Village”. Much of the e-waste from
issued approximately 4,000 permits”. The Computer Village, and all over Lagos,
retrospective issuance of theses permits are reportedly ends up mostly in three landfills
reported to be “the result of a grand corruption scattered around the city. According to TRT
scheme that involves over a million dollars paid World40, “One of them is Olusosun, the biggest
by influential Chinese and Nigerian dumpsite in Africa, measuring up to 42.7
businessmen to senior Nigerian officials, with hectares and sitting right in the heart of Lagos.
the alleged help of Chinese consulate”. It is the sky-high heap of waste that most
 people notice upon entering the city centre.
CITES reviewed the findings of the report
 Although e-waste statistics from Lagos are
related to illegal Nigerian rosewood logging,
 unavailable, the dumpsite alone receives up to
and instituted a suspension in this trade in
 10,000 metric tonnes of garbage daily, with a
2018.
 fair amount of it e-waste”.
5.7.5 Environmental “Green Crimes: Illegal
 5.8 Drug Trafficking: The NRA41 assessed the
Waste Dumping: In in May 2015, the United
 ML threat of illicit trafficking in narcotic drugs
Nations Environment Programme (UNEP)38
 and psychotropic substances as “Medium-
reported that each year, the electronics
 High”. Nigeria has an estimated 146,000
industry generates up to 41 million tonnes of
 people42 with illegal drug use disorders
e-waste from goods such as computers and
 (2017), representing 0.46% of the population.
smart phones, with an estimated 60-90% of e-
waste illegally traded or dumped (with According to the US CIA43 Nigeria is a “transit
dumped e-waste worth sometimes up to point for heroin and cocaine intended for
nearly US$19 billion annually), often with the European, East Asian, and North American
involvement of criminal gangs. Citing the same markets; consumer of amphetamines” and a
UNEP report, a media article in TRT World in “safe haven for Nigerian narcotraffickers
February 201939 reported that Nigeria is one of operating worldwide.”
the main destination countries for such e-waste
 Nigeria has long been identified as an import
with an estimated 500 containers, each
 and transit route for illicit drugs, such as
carrying about 500,000 used computers and
 cocaine and heroin, and a grower and exporter
other electronic equipment, entering the
 of cannabis sativa. Cocaine is trafficked from
country’s ports every month from the US,
 Columbia, Bolivia, Brazil, Peru and Mexico
Europe and Asia. Whilst it is illegal to import
 Nigeria - Threat Assessment - 2020 Page 14 of 32

amongst others, through the United Arab a psychoactive substance in the past year for
Emirates and South Africa, into major non-medical purposes”and that “Cannabis is
international airports and across borders from the most commonly used drug. An estimated
Nigeria. Subsequently, the drugs are trafficked 10.8% of the population or 10.6 million
onward to Europe and to Asia. people, had used cannabis in the past year. The
 average age of initiation of cannabis use
Similarly, traffickers smuggle heroin from
 among the general population was 19 years”.
Pakistan, Thailand and Afghanistan by sea and/
or by air into Ethiopia, South Africa, Dubai According to the OC Index46, “Drugs markets
(UAE), Doha (Qatar) and Turkey, where they are are pervasive in Nigeria. Psychotropic
flown into Nigeria for onward distribution to substances (opiates, especially Tramadol,
Europe and the USA. Owing to Nigeria’s amphetamine and codeine) are increasingly
porous borders, (note also the Economic
Community of West Africa (ECOWAS) policy OC Index - Drug Trafficking - Importance - 
 (Scores out of 10 - Lower scores are better)
on free movement of persons and goods
among member states which is abused to

traffic narcotic drugs within the region) has 8.5 8.0
 6.5 6.5
been very difficult for the authorities to break
the activities of the drug syndicates.
 Cocaine Synthetics Cannabis Heroin

Nigeria has emerged over the past decade as both traded and abused in Nigeria.
a significant producer of methamphetamine, Methamphetamines and Tramadol are the
and whilst domestic use is rising, “most is synthetic drugs that lead this market – both are
reportedly exported to South Africa where 1 kg smuggled and sold in the country. The port of
of meth sells for up up to €10,000. It is also Lagos is a major hub for Tramadol imports,
trafficked to South-East Asia, in particular supplying the entire West African region.
Japan, where 1 kg can reportedly fetch Mexican and Nigerian networks have worked
€130 00044.” together to build crystal meth labs (mainly in
 the south-west of the country), and Nigerian-
The UNODC 2018 report on Drug Use in
 sourced methamphetamine now competes in
Nigeria45 reported that “in Nigeria, one in
 the Asian and South African markets. Domestic
seven persons aged 15-64 years had used a
 abuse of Tramadol and codeine is very high,
drug (other than tobacco and alcohol) in the
 especially among Nigerian youths, the latter
past year. The past year prevalence of any drug
 being consumed mainly in the form of cheap
use is estimated at 14.4 per cent (range 14.0
 codeine-based cough syrups. Nigeria heads
per cent - 14.8 per cent), corresponding to 14.3
 the list of West African countries that produce
million people aged 15-64 years who had used
 and export cannabis to Europe. The country's

 Nigeria - Threat Assessment - 2020 Page 15 of 32

lax border controls, corrupt officials and of the unmanned borders to smuggle arms,
globally networked organised-criminal groups resulting in the influx of over 70% of about 8
facilitate the cannabis trade. The country is also million illegal weapons in West Africa. (NRA).
one of the largest producers of cannabis in the The Nigerian government has estimated that at
region. Nigeria’s south-west region (comprising least, 350 million illegal weapons were in the
Ondo, Osun, Oyo and Ogun states) and the country in 201847.
south (Edo and Delta states) produce much of
 5.10 Fraud & Forgery: The advance fee fraud
the cannabis that is consumed in West Africa.
 typology, known the world over is commonly
Cannabis is also widely consumed
 called the Nigerian ‘419’ scam. According to
domestically, and evidence from the National
 Law Explorer48, “The term ‘419’ is coined from
Drug Law Enforcement Agency indicates that
 section 419 of the Nigerian criminal code
cultivation is on the rise. While cocaine is
 dealing with obtaining property by false
associated with affluent consumers and tends
 pretences. This term generally refers to a
not to be used domestically among poorer
 complex list of offences which in ordinarily
segments of the population, Nigeria
 relate to stealing, cheating, falsification,
nevertheless plays a major role in transnational
 impersonation, counterfeiting, forgery and
cocaine trafficking.“
 fraudulent representation of facts.
5.9 Arms Trafficking: The NRA assessed the
 According to the NRA “there are more cases of
ML threat of illegal arms traffi cking as
 fraud and forgeries in the banking sector than
“Medium High”. Small arms and light weapons
 in any other sector”, which included the use of
are becoming endemic in Nigeria and the rate
 the internet, ATM, bank branches, and PoS
of accumulation is increasing which is in turn
 terminals. “Meanwhile, the instruments used by
having a destabilising effect.
 fraudsters to carry out fraud during the period
Herdsmen, armed robbers, cult groups, were cash, cheque, cards and slips”. The NDIC
kidnappers and Boko Haram carry out violence reported that the banking industry lost US$43
with illegal arms, which they obtain easily. million to cases of fraud in 201849.
Nigeria is a destination and a hub of illicit trade
 5.11 Kidnapping and Hostage Taking was
in firearms in Africa, largely due to its porous
 also identifi ed as another vulnerability (Rated
borders. In 2013, the former Minister of
 “Medium High”) in the NRA50 with Nigeria
Interior disclosed that there were over 1,499
 experiencing a “series of kidnapping
irregular (illegal & unmanned) and 84 regular
 incidences in the past within the South-East
(legal & manned) officially identified entry
 and South-South region of the Country.
routes into Nigeria, confirming the very porous
 Although it was most prominent in the South-
state of these borders which permit or allow
 South due to the existence of international oil
illicit transnational arms trafficking. Terrorists,
 companies from where expatriates were mostly
smugglers and other criminals take advantage
 Nigeria - Threat Assessment - 2020 Page 16 of 32

kidnapped for ransom. In recent past, the crime According to WHO, sham drugs are the world’s
of kidnapping has become very rampant, on most lucrative counterfeit goods, with a global
the increase and spread to all parts of the market worth roughly US$200 billion, and
country”. Kidnapping heightened between Africa accounts for around 42% of the world’s
2015 to 2016, and victims include all calibers cases54. Nigeria is a major market for
of individuals, with ransoms ranging from less counterfeit drugs with the Pharmaceutical
than US$70 -US$350 million (NRA51). Society of Nigeria estimating 70% of the
 Nigerian market made up of fakes55, and that
5.12 Counterfeiting and Piracy of products:
 most imported fake and substandard drugs in
According to the Trends in Trade & Pirated
 Nigeria come from India, China, Pakistan,
Goods Report 201952 by the EUIPO & OECD,
 Egypt, and Indonesia. The National Agency for
3.3% of world trade in 2016 is made up from
 Food and Drug Administration and Control
trade in counterfeit goods. Nigeria is
 (NAFDAC) has rejected this figure, believing
estimated as having a low propensity to export
 the figure closer to 2%56. Fakes are dangerous,
counterfeit products with a score of 0.131/1.0
 with an estimated 12,300 deaths annually in
with export trade to the rest of the world &
 Nigeria from fake malaria medication alone57.
0.41/1.0 for export trade with the EU.
 Counterfeiting and Piracy of products is rated
According to an International Chamber of
 as in the NRA58 as “Medium High.”
Commerce Report53 published in 2015,
“Nigeria is the largest market in Africa for 5.13 Car Dealers were assessed in the NRA59
counterfeit and pirated products and serves as as an overall “Medium High” ML threat, with
a gateway to the rest of the continent for the Nigerian automobile market comprised of
rampant illicit trade. The entertainment industry ‘new’ and ‘used’ cars where the used car
in Nigeria is one of Africa’s biggest industries. market is dominated by informal businesses,
Nigeria accounts for 80% of pirated cash transactions, significantly involves
international music CDs and the local music smuggled cars and is attractive to money
industry witnesses 40% of its products being launderers due to the absence of effective
copied. A report by the Nigerian Television supervision, weak border controls and easy
Authority (NTA) in 2008, estimated the total convertibility to cash.
annual loss of the content industries (music,
 5.14 Non-Profit Organisations: The NPO
software and video) within the nation to be well
 sector is also assessed as “Medium High” ML
over N100 billion. And globally, in 2013, the
 threat in the NRA60 which states that, “65% of
Nigeria Copyright Commission (NCC)
 NPOs interviewed, receive 50% of their funding
disclosed that the country was losing over
 from foreign donors. While 35% receive100%
US$1billion to piracy annually.”
 of their funding from domestic donors. The
 Nigeria Network of NGOs is self regulatory in

 Nigeria - Threat Assessment - 2020 Page 17 of 32

the regulation of the activities of NPO’s in The Tax Justice Network does not include
Nigeria …..However, the practice of self Nigeria in its Financial Secrecy Index64.
regulation by NPOs is plagued with weak
 According to the Financial Times in 202065,
enforcement systems and inability to effectively
 there is low tax morale in Nigeria, which could
check members.” The NRA concluded that
 be attributed to the displeasure of citizens in
“The abuse of NPOs for ML may seem to be
 relation to poor services rendered by the
potentially low, but due to the fact that NPO’s
 government. With increasing debt repayments,
are not effectively regulated, they pose a
 and the government seeking to manage the
significant threat for money laundering in the
 reliance on crude oil revenues, one of the
country”.
 initiatives by the government was to raise “the
A FATF and GIABA 2013 typology report61 value added tax rate from 5 per cent to 7.5 per
titled “Terrorist Financing in West Africa” cent as part of a finance bill that aims to bolster
identified cases of non-profit organisations revenue collection”. The FT further reports that
being used for the financing of terrorism, since the election of President Muhammadu
including in one case an international NGO, Buhari, The Federal Inland Revenue Service
based in the Middle East, had sought to open has said it loses "US$15 billion annually to tax
a bank account in Nigeria, whilst being evasion and that it has roughly doubled the tax
associated with / had links to another NGO base since 2015”.
known to have supported terrorist groups. Red
 5.16 Emerging Threats - Cybercrime:
flags included the frequency of withdrawals
 Although the NRA66 did not include
from the NGO’s accounts, especially in states
 cybercrime as a ML threat, Nigeria is a known
where the insurgency was prevalent. The NPO
 centre for cybercrime activities carried out
sub-sector showed some significant exposure
 domestically and internationally. Despite this
to cash transactions, especially as the use
 reputation, the 2018 Global Cybersecurity
electronic payments are not common in rural
 Index (GCI) report67, ranked Nigeria 5th in
areas where the NPOs mostly offer services.
 Africa and 57th globally, with a score of
5.15 Tax Evasion: Nigeria has a Tax to GDP 0.650/10, and describing Nigeria as a country
ratio of 5.9%62,which is the 2nd lowest in Africa that has “developed complex commitments
and below the average African figure of 16.2% and engage in cybersecurity programmes and
and rated across Africa as a “Low” tax initiatives” and a “Medium” level of
collection country. Tax evasion is, according to commitment.
the NRA63, one of the crimes which presents a
 5.17 Overall Threat Level: According to FCN,
high level of threat in Nigeria and that while
 the overall FC Threat Level is rated as “Very
the tax system is moderately transparent, tax
 High” Threat (18/100), ranked equal 2nd
disclosure is estimated to be medium or low.
 highest out of 40.

 Nigeria - Threat Assessment - 2020 Page 18 of 32

Section 6 - Sanctions & Terrorism
In this Section 6 the focus in on Sanctions and approximately 200,000 seeking refuge in
Terrorism threats. neighbouring countries. Islamic extremism was
 a concern for 72% of the Nigerians polled in a
6.1 Sanctions: The Peddling Peril Index68 (PPI),
 study conducted by the Pew Research Center in
prepared by the Institute for Science and
 2014 and has been a top priority for Nigerian
International Security, classifies Nigeria as a
 politicians”.
Tier 2 country, (moderate threat out of 3) with a
low controls score of 335 out of 1,300. There The 2019 GTI advises that “in Nigeria, terrorist
are 19 (7 entities and 12 individuals) OFAC activity is dominated by Fulani extremists and
SDNs listed with connections to Nigeria69. Boko Haram. Together, they account for 78% of
 terror-related incidents and 86% of deaths from
North Korea, Syria and Cuba have embassies
 terrorism”. Since 2009, the Islamic group Boko
in Nigeria, though Iran does not.
 Haram has been largely responsible for the
According to North Korea in the World, North terrorist attacks in Nigeria and thousands of
Korea and Nigeria signed a MOU on deaths throughout the Lake Chad Basin region
Investment to promote bilateral investment of West Africa. “The Salafi- Jihadi insurgency
opportunities in 2012, and an agreement to has led to 35,000 combat-related deaths and
promote economic cooperation and 18,000 deaths from terrorism since 2011,
educational exchanges in 2014. mainly in Nigeria. The group is most active in
 the north-eastern Nigerian state of Borno but
“In 2016 North Korean exports to Nigeria were
 has also perpetrated attacks in Burkina Faso
reported at a value of $2.66 million, while
 and Cameroon”. The terrorism activities of
Nigeria's reported exports to North Korea were
valued at $54,000 (Source: UN Comtrade)”70. Fulani extremists in Nigeria has put the country
 in the spotlight in the last 2 decades. Recently,
6.2 Terrorism: The Global Terrorism Index tensions and violence have increasingly flared
(GTI)71 for Nigeria in 2019 was 8.6/10, Nigeria between herders and farmers with up to
is also ranked 3rd in the list of countries with 60,000 people estimated deaths since 2001.
highest impact of terrorism (2.7 % of GDP) Population explosion, resource scarcity,
behind Afghanistan and Iraq. According to the desertification, ambiguous land laws and a
NRA, the overall terrorism rating and terrorist weak rule of law provide fertile ground for
financing risk rating are assessed as “Medium”. these crises. Events in the GTD attributed to
The Counter Extremist Project72 quotes the the ‘Fulani Extremists’ reflect the use of terrorism
U.S. Department of State as saying that “Boko as a tactic in the conflict between pastoralists
Haram and its offshoots are responsible for the and farmers, rather than the existence of an
displacement of 2.5 million Nigerians, with organised terrorist group.

 Nigeria - Threat Assessment - 2020 Page 19 of 32

Section 7 - Money Laundering
In this Section 7, the focus is on Nigeria’s cash based. With 39% of the population still
vulnerability to money laundering. unbanked and internet penetration at 42%74
 and mobile money at 5.6% much of the day to
7.1 Higher Risk Areas: Higher risk areas have
 day, person to person transactional activity
been identifi ed through the published NRA
 occurs via exchange of cash for goods or
and from other sources, including those set
 services. Criminal proceeds are generated in
out in this Country Threat Assessment. In many
 Nigeria mostly through bribery and corruption,
cases a single risk factor may not be evidence
 organised crime, pipeline vandalism, frauds
of actual higher risks, and higher risks may be
 and forgeries. While most of the amounts from
more likely to arise where a number of risk
 these activities are laundered within Nigeria,
factors are identifi ed.
 numerous high profile cases have showed that

 Nigeria Higher (Inherent) Risk Factors proceeds related to public office corruption
 and PEPs have been laundered overseas.
 Customer Sector Geography
 Risks Risks Risks

 Customers with elevated Banks (in particular Retail and Country Neighbours; Major
 7.3 Trade Based Money Laundering: Whilst
 exposures to Criminal Correspondent Banks), Export / Import Partner
 activities such as: Bureau de-Change, MSB’s, Countries (Trade Mispricing cash based money laundering, including via
 bribery and corruption, MMO’s, Gambling Operations and IFF’s)
 pipeline vandalism and Illegal & DNFBP’s (Law & Accounting -
 oil bunkering and advance Firms, Jewellers & Trust & Co Third Countries mobile money, is probably the principle, and
 fee fraud have been identified Service Providers) & Car US, Brazil, China, Thailand,
 as the most prevalent
 predicate offence where ML
 Dealers Indonesia and the Balkans
 (Stolen Nigerian oil)
 likely the most popular method for laundering
 threat was rated High (NRA). Hotels & NPOs

 Also: drug trafficking, wildlife Informal Sectors
 China & Vietnam (Wildlife
 Products), India (Fake Drugs)
 funds, trade based money laundering is
 trafficking & human trafficking
 - OC Index Hawala UAE, China, Malaysia, Hong another. Nigeria has six ports in total, but the
 Kong, South Africa & UK (illicit
 to Higher Risk Sectors and/or
 Geography Risks
 inflows - NRA) & Benin, Togo
 & Israel (illicit cash outflows -
 Port of Lagos is the largest both in Nigeria and
 NRA)
 in the top 4 in SSA. The Port of Lagos,
Overall, the NRA73 rated Nigeria’s overall ML accommodates 75% of Nigeria’s imports
threat as “Medium High” while overall ML (2017) with 99% of Nigeria’s trade via sea75.
vulnerability has been assessed as “Medium
 7.4 Other Money Laundering: Securities,
High” and the national ML risk level in the
 transaction and virtual currency laundering are
country overall is assessed as “Medium High”.
 not considered significant, though virtual
The NRA identified as “Medium High” rated:
 currency is popular in the country and is
Banking, Real Estate, Hotels, NPOs, Law &
 currently unregulated. According to
Accounting Firms, Bureau De Change
 Chainalysis, Nigeria is ranked 2nd out of top
Operators, Jewellers & Trust & Co Service
 10 SSA countries for illicit virtual currency
Providers, with Car Dealers the only sector
 activity.
rated as overall “High”.

7.2 Cash Based Money Laundering:
Transactions in Nigeria are still predominantly

 Nigeria - Threat Assessment - 2020 Page 20 of 32

Section 8 - Illicit Funds including Estimated Criminal Proceeds

In this Section 8, the focus is on Nigeria’s proportion will be. According to the sources
vulnerability to Illicit Financial Flows and Illegal and analysis carried out in this Threat
Proceeds and to the laundering of criminal and Assessment, estimates for criminal proceeds,
other illicit funds. laundered funds and funds generated by
 corruption and organised crime, amongst
According to the African Union76 based on
 others, are estimated in the following ranges:
work and data provided by GFI, it is estimated
that Nigeria suffered from illicit financial flows • Total estimates for criminal proceeds
from 2004-2013, averaging US$17.8 billion a combined of 9.5 to 11.5%79 of GDP and
year, and US$433 million with 15 - 20%80 of this
 Total Criminal Proceeds in Sub
from 2008-2017, according to Saharan Africa in US$ Billions - estimated as costs of
Global Financial Integrity77 FCN 2020 (not including fraud corruption.
 and corruption and tax evasion)
(GFI), to have left the country
 • Total estimates for monies
and in 2017, US$5.1 billion.
 Mining Fishing available for laundering
 10 2.5
According to GFI, the most Wildlife
 2 Goods Piracy through the formal sector is
 9
common method for 50 - 60%81 of criminal
 Logging
transferring illicit financial 12.5
 Modern Slavery
 proceeds and 36 - 38%82
 8.3
funds, is through trade mis- involving organised crime,
 Drugs
pricing. GFI believe this Theft
 3 with most significant criminal
 15
method or series of techniques actors being “Criminal
may represent up to 80%78 of Networks” and then by “State
illicit financial flows, and can Embedded Actors”, “Foreign
involve abusive and or aggressive transfer Groups” and “Mafia Style Groups".
pricing, trade mis pricing and mis-invoicing, for
 • The largest criminal markets in Nigeria will
example intentionally overpaying for imports
 include corruption, pipeline vandalism and
of goods or services (or underpaying for
 illegal oil bunkering, fraud, drug trafficking
exports or services) is a straightforward way of
 and arms trafficking & tax evasion, and those
illegally transferring monies out of a country.
 crimes identified as the largest markets
The risks increase in trade with so called across Sub-Saharan Africa (see Pie Chart
advanced economies. Whilst not all IFFs are above).
made up of criminal activity, a significant

 Nigeria - Threat Assessment - 2020 Page 21 of 32