What does FATF mean?
The FATF grey list identifies jurisdictions that are actively working to address
deficiencies in their AML/CFT regimes. Being on this list often leads to
heightened scrutiny of cross-border transactions, increased compliance costs
for businesses, and reduced investor confidence. Nigeria was first placed on
the list in February 2023, following concerns over enforcement weaknesses,
beneficial ownership transparency, and coordination among regulatory and
intelligence agencies. Over the past two years, Nigeria has made significant
progress in strengthening its legal and institutional frameworks. The key steps
include:
Implementation of key legislation such as the Money Laundering (Prevention
and Prohibition) Act, 2022, the Terrorism (Prevention and Prohibition) Act,
2022, and the Proceeds of Crime (Recovery and Management) Act, 2022.
Operationalization of a Beneficial Ownership Register to improve
transparency of company structures.
Enhanced inter-agency coordination between the Economic and Financial
Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU),
Central Bank of Nigeria (CBN), and other regulatory bodies.
Successful completion of a FATF on-site assessment in August 2025, which
confirmed tangible progress across all 19 recommended action points given
during the period of delist.
Legal implication of Nigeria’s exit:
The exit affirms the effectiveness of Nigeria’s 2022 laws and gives them
global recognition.
Regulatory agencies such as EFCC, NFIU, and CBN now operate under
enhanced legitimacy to impose stricter compliance obligations on financial
and non-financial institutions.
Nigeria’s request for help in tracing illegal illicit assets is now more likely to
receive positive responses under multilateral conventions.
Compliance officers and financial institutions must ensure robust
Know-Your-Customer (KYC) and beneficial ownership verification
procedures in line with FATF standards, while also adopting an internal
AML compliance framework.
It strengthens the rule of law and aligns with section 15(5) of 1999
Constitution of Federal Republic of Nigeria (as amended), which mandates
the state to abolish corrupt practices and abuse of power.
Positive Impact of the Exit
Nigeria’s removal from the grey list carries far-reaching implications, some of
which are:
- Restored global financial credibility and confidence.
- Reduced risk perception could attract higher foreign direct investment
(FDI). - Smoother banking relationships.
- Better access to foreign capital and trade finance.
In conclusion to avoid future relisting, Nigeria must not only maintain its
current standards but also strengthen the culture of financial accountability
across both public and private sectors. As the development sends a powerful
signal to global markets that Nigeria is open, compliant and ready for
sustainable growth.
This summary is intended for informational purposes only and does not constitute legal advice. Contact lawyers@nijioni.com for guidance.
