BANKING (FREEZING OF ACCOUNTS) ACT

An Act empowers the Federal Government to freeze bank accounts suspected of holding unlawful funds. It targets individuals under investigation for financial crimes and law enforcement agencies. This preserves assets for ongoing investigations.

What Is This Policy?

An Act that empowers the Federal Government to freeze bank accounts of persons or entities suspected of holding funds connected with unlawful activities, in order to prevent dissipation of such funds pending investigation or legal proceedings.

Who Does It Target?

Persons under investigation for financial crimes or corruption Banks and financial institutions holding frozen accounts The Federal Government and the Attorney General of the Federation Economic and Financial Crimes Commission (EFCC) and other law enforcement agencies

What Does It Aim to Achieve?

Preserve assets suspected to be proceeds of crime or corruption by enabling the government to freeze accounts without delay, ensuring funds are not transferred or dissipated before investigation or prosecution.

Key Features

Freezing Power: The Federal Government may by order freeze any bank account where there is reasonable ground to believe the funds are connected to unlawful activity. Bank Obligations: Banks must comply immediately with a freezing order and must not permit any transactions on a frozen account. Court Oversight: Freezing orders are subject to judicial review, and account holders may apply to court to challenge or lift a freeze. Duration: Frozen accounts remain frozen until the order is lifted by the government or discharged by a court.

Current Status

Rollout Stage: Active — frequently used in high-profile corruption and financial crime investigations Coverage: Nationwide; applies to all banks and financial institutions Beneficiaries: Nigerian public through asset preservation in corruption cases; law enforcement Funding: Federal Government

How to Access

Account holders subject to freezing orders may seek legal redress through the courts Banks must implement freezing orders immediately upon receipt Third parties with legitimate claims on frozen funds may apply to court Application method: Freezing orders issued by the Attorney General of the Federation or authorised agencies; no public application.

Important Terms

Operating a frozen account is a criminal offence for both the account holder and the bank A freezing order does not amount to a finding of guilt Interest continues to accrue on frozen accounts during the period of the order

Official Resources

Website: https://www.agf.gov.ng Contact: Office of the Attorney General of the Federation / EFCC

Legal Framework

Enacted under the legislative powers of the National Assembly vested by Section 4 of the 1999 Constitution (as amended). Operates alongside the Money Laundering (Prevention and Prohibition) Act 2022, the EFCC (Establishment) Act 2004, the Proceeds of Crime (Recovery and Management) Act 2022, the CBN Act 2007, and the Banks and Other Financial Institutions Act (BOFIA) 2020. Aligns with FATF Recommendations on asset freezing and targeted financial sanctions.