Can FATF's Focus on Beneficial Ownership Aid Anti-Corruption Efforts in a ‘Low-Capacity’ Country? Challenges From the Front Line in Nigeria

While the aims of the Financial Action Task Force’s (FATF) 40 Recommendations are to combat money laundering, the financing of terrorism and proliferation of weapons of mass destruction, their overall purpose is the disruption and discouragement of underlying criminal activity. In doing so the FATF addresses the use of beneficial ownership (BO) as a means of hiding the proceeds of crime including corruption, which is a major problem in Nigeria.

This chapter considers the tension between FATF’s suggestion that countries maintain and share accurate and up-to-date information regarding the legal and BO of companies and trusts (Recommendations 24 and 25) and its acknowledgement of the varying capacity of jurisdictions to live up to its standards – its ‘low-capacity country’ designation. The chapter does this by examining Nigeria’s attempts to comply with these two recommendations which have evolved in the context of its anti-corruption regime.

Following a slow and tortuous journey, disclosure of significant control and BO is now included within Nigeria’s Companies and Allied Matters Act 2020 in compliance with FATF Recommendations 24 and 25. However, despite its passage, the Nigerian authorities will face challenges in the creation of a register that meets the tests of accuracy and reliability. These challenges arise from a cultural lack of transparency and tendency towards secrecy that compound systemic data deficiency within Nigeria’s institutions, and an elaborate institutional landscape that masks its overall effectiveness, caused largely by a lack of inter-agency cooperation.