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Risk assessment; a process of evaluating potential risks, is often tailored round a projected activity as a way to define an estimate of risk related to the known threat. Over the years, Nigeria, like many African countries, has become a significant center for financial crime. This is essentially due to lack of proper checks and balances within the socio-economic purview, weak laws, weaker implementations of the laws already on ground and general lack of attention being paid to the movement of money especially within the third sector; terrorist organizations and corrupt officials therefore take advantage of the situation to launder money through not-for profit organizations and for the most part, get away with it.


The requirement to perform a National Risk Assessment stemmed from the 40 Recommendations on International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation handed down by the Financial Action Task Force’s (FATF), issued in 2012 and subsequently revised in 2016. The FATF is an intergovernmental body established in 1989It is the global body that sets the standards for combating money laundering and terrorist financing as well as other related threats to the integrity of the international financial system.


The National Risk Assessment began in the wake of the revision of the FATF recommendations which was done in 2012, recommending that countries identify, assess and understand the level of risks their countries face in terms of money laundering and terrorist financing. It mandated the need for specific actions to be taken in order to assess and ultimately mitigate these risks in their locales. Before it was officially reviewed and amended in 2016, the FATF Recommendation characterized Non-Governmental Organizations (NGOs) as being particularly vulnerable to terrorists abuse and this impacted the operation of civil society organizations greatly as laws which restricted the free operations of NGOs were then implemented. The revision however helped in gauging the effectiveness of the stringent laws, bringing to light the areas where implementation could be enhanced to mitigate the high risk of terrorist abuse within the sector.


Since inception, assessments have been done via mutual evaluations that are conducted with the country and representatives of the FATF or regional standard setter. It is to ensure that measures which are intended to be put in place to combat and ultimately mitigate the of risks of money laundering and terrorist financing within a country, sector or an organization are proportionate with the level of risks identified; anywhere there is movement of money: Financially-Based Organizations (FBO) as well as Designated Non-Financial Institutions (DNFI) which received sponsorship from various sources; NPOs are a part of , there is a perceived threat and the aim is to prevent criminals from using the financial system to move ill-gotten funds.


The Nigerian Financial Intelligence Unit (NFIU) has established a unit responsible for conducting thematic strategic analysis with a view to identifying money laundering and terrorism financing trends and typologies prevalent in the country. In this capacity, the NFIU relies mainly on the intelligence generated by itself and has not systemically benefited from other information in particular cases investigated by law enforcement agencies which were not triggered by NFIU. To date the NFIU has published one typology report on terrorist financing.


Organizations would demonstrate that the issues which predispose them to risks or amplify their level of vulnerability are taken into consideration; adequate measures to strengthen their structures and mitigate these risks are thought through and implemented. It is important to note however that even in all of these, risk is a dynamic and amorphous concept as it is inherently difficult to describe or measure in quantifiable terms; areas which were not initially considered to be vulnerable could pop up as the weak link if the mitigated measures are not carried out to safeguard the organization or sector as a whole therefore a risk assessment will involve making judgments about these perceived issues to achieve it intended goal.


Written by Chidinma Okpara: Project Officer, and Oyindamola Aramide: Communications Officer, Regulatory Engagement, NNNGO.


Thoughts and opinions expressed are that of the authors and does not necessarily reflect the views of the Nigeria Network of NGOs


The Inter-Governmental Action Group against Money Laundering in West Africa, (GIABA) is responsible for strengthening the capacity of ECOWAS member states towards the prevention and control of money laundering and terrorist financing in the region.


Officially inaugurated in year 2000, GIABA operates as one of the eight FATF style regional bodies concerned with ensuring that member states of ECOWAS comply with international AML/CFT standards as well as granting Observer Status to African, non-African States and Inter-Governmental Organizations which have applied for observer status and support its objectives and actions.


The creation of GIABA is a major response and contribution of the ECOWAS to the fight against money laundering. GIABA consists of 16 countries: Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Sao Tome and Principe, Senegal, Sierra Leone, and Togo.


GIABA’s core functions includes: Institutional Development, compliance monitoring, technical support to member states, Regional and International Cooperation, partnership, Typologies and other Research. This helps to determine the techniques, methods, extent, pattern, trends, location and impact of Money Laundering and Terrorist financing on Member States. The conduct of Technical Assistance Needs Assessment (TANA) on member States was aimed at determining specific targets for intervention with a view to making maximum impact in strengthening the regional AML/CFT framework.


This anti-money laundering agency operates through four main organs: An Ad Hoc Ministerial Committee consisting of three ministers responsible for Finance, Justice and Interior/ Security of each Member State; The Secretariat, which is located in Dakar, Republic of Senegal; the Technical Commission, which consists of experts drawn from the above-mentioned ministries of member States and; a network of national correspondents.


In carrying out its duties, GIABA conducts Mutual Evaluations of Member States in accordance with FATF standards and also in compliance with its enabling Statutes. The Evaluations are based on the FATF Forty Recommendations (2003) and the Nine Special Recommendations on Terrorist Financing (2001), using the AML/CFT Methodology 2004.


Member States of GIABA agree to subject themselves to a mutual assessment process in conformity with international standards for preventing money laundering and financing of terrorism as contained in Articles 12 to 14 of the GIABA Statute. The scope of the Evaluation is to assess whether the necessary laws, regulations or other measures required under the essential criteria are in force and effect, that there has been a full and proper implementation of all the necessary measures, and that the AML/CFT system as implemented is effective.


The evaluated country is rated depending on the efficacy of measures put in place to detect, prevent or sanction cases of money laundering and terrorist financing. Ratings range from compliant, largely compliant, partially compliant, to non-compliant. A report is issued after completion of the mutual evaluation. It is then discussed and adopted at GIABA Plenary. Once the report is adopted by the Plenary, it will be published on GIABA website unless the country raises objection to the publication of the report. In such a situation, the Secretariat would publish a note to indicate that the country has chosen not to publish its report. The mutual evaluation onsite visits are based on the calendar approved from time to time by the GIABA Ad Hoc Ministerial Committee.


It is safe to say that going by its method of evaluation, implementation of laws and regulations and the adoption of FATF’s way of doing things, GIABA has adopted the FATF procedure in the evaluation of Member States.

Legal Framework for the Establishment of Not-for-Profit Organizations

Written by Adeola Odunsi, Project Officer, Regulatory Engagement with editorial support by Oyindamola Aramide, Communications Officer.


Thoughts and opinions expressed are that of the authors and does not necessarily reflect the views of the Nigeria Network of NGOs

26th April, 2017.


Corporate entities and nonprofit organizations in Nigeria and beyond have continued to support and engage in charitable causes, which have met the yearnings and aspirations of individuals, groups and the society at large. Many corporate entities have adopted various corporate social responsibility policies in an attempt to give back to the society in which they operate. Activities of foundations established by corporate organizations have been beneficial to the public in a variety of ways ranging from tackling abuse of various forms to developmental issues, healthcare, environmental and socio-cultural challenges.


This article seeks to provide a general overview on the legal framework for the establishment of nonprofits in Nigeria. It also highlights governance structures for nonprofits, dissolution and corporate social responsibility reporting.


The legal framework for non-governmental organizations in Nigeria stems from the provision of the Constitution of the Federal Republic of Nigeria 1999 which recognizes the right to peaceful assembly and association. The Companies and Allied Matters Act, Cap C20, Laws of the Federal Republic of Nigeria 2004 (“CAMA”), is the principal legislation that regulates corporate entities registered in Nigeria and the Corporate Affairs Commission (the “Commission” or “CAC”) is the supervisory regulatory body for registered corporate entities.


Under the Company and Allied Matter Act, the commonly used structures for incorporating not-for-profit organizations are companies limited by guarantee and incorporated trustees and the procedures for registration are provided for under CAMA.


The Part C of CAMA provides for registration of incorporated trustees. Section 590(1) of CAMA provides thus:

“where one or more trustees are appointed by any community of persons bound   together by customs, religion, kinship or nationality or by anybody or association of persons established for any religious, educational, literary, scientific, social, development, cultural, sporting or charitable purpose, he or they may if so authorized by the community, body or association…apply to the Commission in the manner hereafter provided for registration…as a corporate body.”


Once the association or organisation is registered by the Commission as an incorporated trustee, the trustees jointly become a body corporate with perpetual succession and have the power to sue and be sued. It is pertinent to state that the registration of an incorporated trustee confers the corporate status on the trustees rather than on the organisation itself unlike a company limited by guarantee which confers the status of a corporate body on the company itself. The significance of this fact is that, where an organisation has incorporated trustees registered under CAMA, the trustees on behalf of the organisation are empowered to contract in the same form and manner as an individual. This includes the power to hold, acquire and transfer any property on behalf of the association.

NGO Self-Regulation

Written by Oyindamola Aramide, Communications Officer, NNNGO.


Thoughts and opinions expressed are that of the authors and does not necessarily reflect the views of the Nigeria Network of NGOs


Regulation is the process by which Civil Society Organizations function under a set of established laws and policies by governments and are held accountable to their communities. It could be in the form of self-regulation, control by state or national governmental agencies or the use of regional norms and standards.


Over the years and since the unprecedented boom of the civil society in Nigeria, there have been calls for CSO accountability and transparency in carrying out their activities especially with expansion and continued alliances with domestic and foreign donors for funding. It is believed amongst government quarters that some NGOs use their platforms to launder funds received from donors and so the government in particular is seeking to regulate their activities. Some NGOs have been set up with the main purpose of taking advantage of foreign funds meant for development work.


However, it could be said that this calls which were originally made with good intention have been misrepresented by government through seeking to formulate laws that would invariably curtail the activities of CSOs and justify restrictive regulation.


In response to these developments, it would not be presumptuous for CSOs to begin to work together as a sector to develop self-regulatory initiatives. As key actors in the governance of social and economic affairs, there is the need to make known their good intentions, sound values and the ability to be accountable for their actions. As the Nigerian civil society space grows, there is the need for a cooperative effort within the society to address issues from how CSOs are governed to what information they should be making public and how they should evaluate their activities.


Self-regulation is the process through which Civil society Organizations institute their own regulatory mechanisms. In some cases, self-regulation can involve a third party such as a fellow civil society organization, preferably with the same thematic focus or a watchdog undertaking external assessments of organizations while in some others, CSO self-regulation can involve the government. In these cases power is partially delegated to an umbrella organization or other association representing CSOs to regulate behavior or set standards for the sector.


Civil society organizations would find it easier to voice their complaints whenever the need arises without fear of being crushed by the weight of the law as they are confident of their own personal involvement in their affairs. All forms of CSO self-regulation have in common the fact that they are not the subject of legal requirement; at least some aspects of each CSO self-regulatory initiative involve the voluntary participation of the sector in developing and administering common norms and standards of behavior.


An advantage of self-regulation that cannot be over-emphasized is the strengthening of internal structures of individual CSOs who have them in place. Adopting a strong and systematically developed self-regulatory mechanism would no doubt allow for smooth and transparent operation within the organization. There would be less need for validation of an external or governmental body in situations where nonprofits lobby for funding.


Self-regulation can help build public trust in the sector. Making public commitments to clear principles, norms and standards provides a standard to which CSOs can be held accountable for their actions and activities. Furthermore, self-regulation can also help limit reputational damage to the sector caused by the wayward and unaccountable behavior of a minority of organizations. It also empowers participating organizations, or the sector as a whole, to signal trustworthiness and professionalism to donors and the general public. In cases where participation in the initiative is limited, self-regulation can assist participating organizations to stand out to potential donors in an increasingly competitive field. Another benefit of self-regulations is to help protect the sector from fraudulent organizations.


The ongoing debate at the National assembly on the passage of NGO regulatory bills which seeks to regulate activities of CSOs is a call to the civil society organization to fasten its belt in legitimatizing the sector by presenting a transparent and more accountable front through creating an enviable self-regulatory structure. The need for an inquiry into the regulation of CSOs in Nigeria cannot be underestimated as the space for CSOs to operate is gradually decreasing due to interference in their activities by national governments.