AML compliance in Nigeria entered a new phase in 2025 following the country’s removal from the Financial Action Task Force (FATF) Grey List. This milestone reflects a sustained reform effort and signals a shift toward stronger supervision, clearer accountability, and higher expectations for regulated entities operating across Nigeria’s financial system.
For organisations subject to regulatory compliance in Nigeria, grey list removal does not reduce scrutiny. Instead, it marks the beginning of a more mature, enforcement-driven AML environment.
Nigeria’s FATF Grey List Exit: Why It Matters
Nigeria was added to the FATF Grey List in February 2023 due to strategic deficiencies in its AML/CTF framework. After nearly two years of reform, the country was officially removed in October 2025.
This decision followed demonstrable progress in several areas.
Completion of the FATF Action Plan
Nigeria met all milestones under its agreed FATF action plan, showing measurable improvements in supervision, enforcement, and inter-agency coordination.
Stronger Institutional Capacity
Reforms enhanced the operational capability of the Nigerian Financial Intelligence Unit (NFIU) and improved information-sharing across law enforcement and supervisory bodies.
Improved Enforcement Outcomes
Authorities increased prosecution rates, strengthened intelligence-led supervision, and adopted more risk-based approaches across regulated sectors.
What FATF Grey List Removal Signals for Compliance Teams
Grey list removal has raised, not lowered, regulatory expectations. Nigerian supervisors are now focused on ensuring reforms translate into effective, sustainable controls.
Organisations should expect:
- More confidence-driven but stricter supervision
- Reduced tolerance for weak or inconsistent AML controls
- Greater scrutiny of remediation timelines
- Increased focus on auditability and governance
Rising Supervisory Expectations Across Nigeria
Post-grey-list supervision increasingly centres on:
Risk-Based AML Frameworks
Institutions must demonstrate accurate customer risk classification, appropriate enhanced due diligence, and ongoing risk review.
Operational Effectiveness
Policies alone are insufficient. Regulators expect controls such as screening, identity verification, and transaction monitoring to function effectively in day-to-day operations.
Governance and Accountability
Clear board oversight, senior management responsibility, and defined escalation structures are now central to supervisory reviews.
Who Is Most Affected by the New AML Landscape
The following sectors face heightened expectations:
- Banks and deposit-taking institutions
- FinTechs and payment service providers
- Securities and investment firms
- Digital lenders
- Pension administrators and custodians
Organisations operating across multiple sectors must ensure AML frameworks are consistent and scalable.
What Organisations Should Prioritise Going Forward
To meet post-grey-list expectations, organisations should focus on:
- Strengthening customer screening and verification processes
- Maintaining accurate, up-to-date customer risk profiles
- Ensuring transaction monitoring reflects Nigerian risk typologies
- Improving documentation, audit trails, and reporting quality
Conclusion
Nigeria’s removal from the FATF Grey List represents a turning point for AML compliance. In 2025, regulatory focus shifted decisively from reform commitments to operational delivery. Organisations that invest in structured, technology-enabled AML controls will be best positioned to meet supervisory scrutiny in this new regulatory phase.
FAQs
1. Why was Nigeria removed from the FATF Grey List?
Nigeria completed its FATF action plan, strengthening supervision, enforcement, and institutional coordination.
2. Does grey list removal reduce AML obligations?
No. Regulatory expectations have increased, with a stronger focus on effectiveness and governance.
3. Which sectors face the highest scrutiny?
Banks, FinTechs, digital lenders, investment firms, and pension operators.
4. What is the main compliance challenge post-grey-list?
Demonstrating that AML controls work in practice, not just on paper.
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