Analysis

Analysis: Is SCUML Certificate a snag to ease of doing business?


Ibrahim Magu Chairman, EFCC


One of the most important policy thrust of the Buhari administration has been to improve Nigeria’s Ease of Doing Business status around the world. Nigeria, thought to be the largest economy in Africa, is notoriously known for bottlenecks with ease of doing business and ranks as one of the worst in the world.

Though, marked improvements has been seen this year, most business still find it challenging to start a business. One common example is what it takes to open a corporate bank account in Nigeria. Currently there are about 14 steps/requirements you will need to provide to open a bank account in Nigeria. Among them is the Special Control Unit Against Money Laundering (SCUML), which by most accounts can take between 7 days to even a month to be obtained.



Startups or companies looking to open a corporate account, have often complained about the rigorous nature of SCUML and why they need to provide this requirement to open a simple bank account.



What is SCUML?

SCUML means Special Control Unit Against Money Laundering is a unit of the Economic and Financial Crimes Commission (EFCC). The certificate is issued by the EFCC as a proof that a bank account is not being used for money laundering activities and is issued after a thorough background check.

What does the SCUML do ?

SCUML is charged with the responsibility of monitoring, supervising and regulating the activities of Designated Non Financial Institutions (DNFIs) in line with the Money Laundering (Prohibition) Act ML(P)Act 2011 and the Prevention of Terrorism Act (PTA) 2011.

What is money laundering ?

Money laundering is the process of making illegally obtained money appear legiitmate by passing it through legitimate businesses.

Who are designated Non Financial Institutions ?

Section 25 of the Money Laundering Prohibition Act defines DNFIs as dealers in jewellery, cars and luxury goods, Precious stones and metals, Real estate, Estate developers, Estate surveyors and Valuers, Estate Agents, Chartered accountants, audit firms, tax consultants, clearing and settlement companies, hotels, casinos, supermarkets,.

Others include dealers in Merchanised Farming equipment and machineries, Practitioners of Mechanised farming, Non Governmental Organisations (NGOs) or such other businesses as the Federal Ministry of Trade and Investment or appropriate regulatory authorities may from time to time designate.

What category of businesses need the SCUML certificate ?

Organizations designated as Non Financial Institutions are required to obtain the certificate in order to open a bank account.

What documents are required to obtain the SCUML certificate ?

i. Certificate of Incorporation.
ii. Article and Memorandom of Association.
iii. Tax Clearance Certificate ( Not Applicable to NGOs).
iv. Audited Financial Report.
v. Authorised Operational License ( Not Applicable to NGOs).
vi. Company/Organization Profile.
vii. Constitution ( For NGOs Only)
vii. Agreement Signed between the NGO and the National Planning Commission ( For International NGOs Only).

Does one need to pay for the certificate ?

Registration can be done on the SCUML website for free.

Is SCUML good for ease of doing business?

Whilst the intention of SCUML are understandable and required, it has proven to be burdensome for Startups and companies looking to operate a bank account in Nigeria. Regardless of its good intentions, anything that creates an additional bottleneck for doing business in Nigeria requires urgent attention, and SCUML appears to be one of such. The EFCC or any other agency involved in issuing the certificate should make the process easier to operate.

Critics of SCUML also wonder why the EFCC has to get involved in the account opening process. SCUML by design suggest the EFCC approves which company qualifies to have a bank account in Nigeria. This in their view creates an impression of being “guilty till proven innocent” and is...