Nigeria: FATF High-Risk Jurisdictions Call for Action Amid Money Laundering Concerns

• The FATF has issued updated statements identifying high-risk jurisdictions subject to a call for action and those under increased monitoring.
• Nigeria is among the countries affected by these developments, as it was included in the list of jurisdictions subject to a call for action.
• Companies operating in or with ties to Nigeria must review their exposure to potential sanctions or reputational damage due to business dealings with high-risk jurisdictions.
• The FATF's statements provide guidance on the level of risk associated with doing business in certain countries and emphasize the importance of effective AML/CFT measures.

The FATF has urged Nigeria and other affected countries to strengthen their AML/CFT frameworks and implement effective measures to prevent money laundering and terrorist financing.

The Financial Action Task Force (FATF) has issued updated statements identifying high-risk jurisdictions subject to a call for action and those under increased monitoring. The FATF's February 2026 Plenary Session saw the release of these critical updates, which aim to combat money laundering and terrorist financing globally. Nigeria is among the countries affected by these developments, as it was included in the list of jurisdictions subject to a call for action.

The FATF's statements are significant because they provide guidance on the level of risk associated with doing business in certain countries. For instance, jurisdictions that have been identified as high-risk may face increased scrutiny from regulatory bodies and financial institutions. This could lead to reputational damage or even sanctions for companies operating in these regions.

The FATF's call for action is not a formal designation, but rather an indication of the need for countries to take concrete steps to address their deficiencies in anti-money laundering (AML) and combating the financing of terrorism (CFT). The FATF has urged Nigeria and other affected countries to strengthen their AML/CFT frameworks and implement effective measures to prevent money laundering and terrorist financing.

The FATF's statements are based on a thorough assessment of each country's AML/CFT framework. The assessment takes into account factors such as the effectiveness of a country's laws, regulations, and enforcement mechanisms in preventing money laundering and terrorist financing. Nigeria, like other countries subject to a call for action, must demonstrate its commitment to implementing effective AML/CFT measures.

The FATF's guidance is not binding, but it carries significant weight in the global financial community. Regulatory bodies and financial institutions rely on the FATF's assessments when making decisions about whether to engage with certain jurisdictions or entities. Failure to comply with the FATF's recommendations can result in reputational damage, loss of business, or even sanctions.

In Nigeria, the Securities and Exchange Commission (SEC) has issued a circular reminding all capital market regulated entities of their obligations under the FATF's statements. The SEC has emphasized the importance of reviewing existing relationships with entities in high-risk jurisdictions and taking steps to mitigate potential risks.

The implications of the FATF's statements are far-reaching, particularly for companies operating in or with ties to Nigeria. Lawyers and compliance officers must review their clients' exposure to potential sanctions or reputational damage due to business dealings with jurisdictions subject to a call for action or increased monitoring.

Companies that fail to address AML/CFT risks may face significant consequences, including loss of business, fines, or even criminal charges. In contrast, those that take proactive steps to mitigate these risks can maintain their reputation and avoid costly penalties.

The FATF's statements serve as a reminder of the importance of effective AML/CFT measures in preventing money laundering and terrorist financing. By working together with regulatory bodies and financial institutions, countries like Nigeria can strengthen their AML/CFT frameworks and reduce the risk of reputational damage or sanctions.

Lawyers and compliance officers should review their client's exposure to potential sanctions or reputational damage due to business dealings with jurisdictions subject to a call for action or increased monitoring.

Source: Original reporting via SEC Nigeria Circular