typologies Of Money Laundering From Illicit Trafficking In Drugs And Psychotropic Substances In Nigeria

July 2023 UNITY AND FAITH PEACE AND PROGRESS TYPOLOGIES OF MONEY LAUNDERING FROM ILLICIT TRAFFICKING IN NARCOTICS AND PSYCHOTROPIC SUBSTANCES IN NIGERIA UNDER INVESTIGATION SEALED BY NDLE A LAGOS COMMAND 6/6/23 OF NIGERIA 1000 N50 5870 00 #20 UGENIA BOF1494 50 20 10 5

A publication of the Nigerian Financial Intelligence Unit AN FINANCIAL INTELLIGEN UN NFIU INTEGRITY & DILIGENCE The Nigerian Financial Intelligence Unit (NFIU) is the central national agency responsible for the receipt of disclosures from reporting organisations, the analysis of these disclosures and the production of intelligence for dissemination to competent authorities. The NFIU is an autonomous unit, domiciled within the Central Bank of Nigeria and the central coordinating body for the country's Anti-Money Laundering, Counter-Terrorist Financing and Counter- Proliferation Financing (AML/CFT/CPF) framework. No reproduction or translation of this publication may be made without prior written permission. Applications for such permissions, for all or part of this publication, should be made to The Director/Chief Executive Officer, Nigerian Financial Intelligence Unit 12, Ibrahim Taiwo Street, Aso Villa Abuja, Nigeria 1, Monrovia Street, Block 3, Wuse II, Abuja, Nigeria (e-mail: info@nfiu.gov.ng) © 2023 NFIU. All rights reserved.

TABLE OF CONTENTS ACKNOWLEDGEMENTS 3 LIST OF ACRONYMS 4 CHAPTER 1: INTRODUCTION 6 1.1 Objective of the Report... 9 1.2 Methodology/ Scope/Limitation 10 CHAPTER 2: CONCEPTUAL FRAMEWORK FOR ILLICIT TRAFFICKING IN NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES 11 2.1.Definition of Narcotic Drugs... 11 2.2. Definition of Psychotropic Substances. 11 CHAPTER 3: NIGERIA'S LEGAL AND INSTITUTIONAL FRAMEWORK FOR COMBATTING ILLEGAL TRAFFICKING OF NARCOTICS AND PSYCHOTROPIC SUBSTANCES. 12 CHAPTER 4: SUMMARY OF REPORTS ON ILLIICT TRAFFICKING IN DRUGS & PSYCHOTROPIC SUBSTANCES 17 4.1 The 2023 World Drug Report 17 4.2 THE UNODC 2023 Global Cocaine Report 19 4.3 FATF (2022), Money Laundering from Fentanyl and Synthetic Opioids 20 4.4 THE 2022 National Inherent Risk Assessment of MONEY LAUNDERING IN NIGERIA ...... 21 4.5 Drug Trafficking in Nigeria: Its Causes and Effects on the Citizens (2022): Nigeria and Drug Cartel Links Close to the Summit of Power .. 22 4.6 Trends in Illicit Drug Trafficking in Nigeria Highlighting the Imperative of Raising the Red Flag (2019). 23 4.7 The UNODC 2018 Survey on Drug use in Nigeria 23 4.8 Drug Trafficking and the Threat to Nigeria's National Security (2016). 24 4.9 Illicit Drug Trafficking In Nigeria: Obstacle To National Development And Security ....... 24 CHAPTER 5 ANALYSIS OF QUESTIONNAIRE RESPONSES. 26 CHAPTER 6: MONEY LAUNDERING TYPOLOGIES AND CASE STUDIES OF ILLICIT TRAFFICKING IN NARCOTIC DRUGS ANS PSYCHOTROPIC SUBSTANCES IN NIGERIA 31 6.1 Typology1: Laundering The Proceeds Of Illicit Trafficking In Drugs Through The Real Estate Sector.. 31 6.2 Typology 2: Use Of Auto Dealership.. 33 1 Page

6.3 Typology 3: Use Of The Capital Market Sector. 6.4 Typology 4: Use Of Bank Products.. 36 38 6.5 Other Emerging Typologies In Laundering Proceeds From Illicit Drugs Trafficking 42 6.6 Illicit Drugs Trafficking Related Suspicious Transaction Reports Filed By Banks To The NFIU 43 6.7 Jurisdictions of Concern.. 46 6.8 Trends Associated with Illicit Drug Trafficking 47 6.9 Vulnerable Sectors Susceptible to Money Laundering through Illicit Trafficking in Drugs Activities 48 6.10 Emerging Trends of Money Laundering Techniques Associated with Illicit Trafficking in Drugs.... 48 6.11 Types of Drugs According to Estimated Proceeds of Crime seized and destroyed between 2021 and 2023 by the NDLEA 49 6.12 Drug Trafficking Heat Map in Nigeria 50 CHAPTER 7: CONTEMPORARY ISSUE ON DRUG TRAFFICKING IN NIGERIA 55 CHAPTER 8: VULNERABILITIES AND CHALLENGES IN THE FIGHT AGAINST ILLICIT DRUG TRAFFICKING IN NIGERIA 58 CHAPTER 9: CONCLUSION AND RECOMMENDATION 61 9.1 Conclusion 61 9.2 Recommendation 61 2 Page

ACKNOWLEDGEMENTS We extend our sincere appreciation to the following esteemed agencies, whose contributions have been instrumental in the completion of this report on money laundering typologies through illicit trafficking in drugs and psychotropic substances in Nigeria: 1. 2. Economic and Financial Crimes Commission (EFCC) Federal Ministry of Justice (FMoJ) 3. 4. International Police Organisation – National Central Bureau (INTERPOL – NCB) National Drug Law Enforcement Agency (NDLEA) 5. National Agency for Food & Drug Administration & Control (NAFDAC) 6. Nigeria Customs Service (NCS) 7. Nigeria Immigration Service (NIS) This report represents a collaborative effort marked by diligence, expertise, and unwavering commitment to a critical issue that affects our nation. The importance of this endeavour cannot be overemphasized, as it provides a comprehensive understanding of money laundering typologies through illicit drugs trafficking, particularly in light of the high-risk findings from Nigeria's national risk assessment with respect to the predicate crime. This study is a crucial source of information in a world where the dynamics of money laundering are ever evolving. It provides reporting entities and competent authorities the knowledge required to successfully detect and combat money laundering respectively. Once again, we extend our heartfelt gratitude to these agencies for their invaluable contributions to this endeavour. Together, we stand prepared to face the challenges ahead and secure the integrity of our financial systems. Finally, we would like to express our gratitude to all of the Nigerian Financial Intelligence Unit (NFIU) team members whose persistent work and commitment made this study possible. We appreciate their efforts to this project and their excellent dedication to professionalism and quality. Thank you all for your support and contributions to this report on money laundering typologies through illicit trafficking in drugs & psychotropic substances in Nigeria. Modibbo R. HammanTukur Director/CEO Nigerian Financial Intelligence Unit 3 Page

LIST OF ACRONYMS ADSU AIDS AML ATS BDC CBN CDD CFT CMOS CPF DNFBPS DOGI DSS EFCC FARC FATF FinCEN Fls FMoJ GOA HIV INCB INCSR INTERPOL-NCB ITD KYC MDMA MLPPA NAFDAC NAICOM NCS NDLEA NFIU NIRA NIS NPF NPS NSA Anti-Drug and Smuggling Unit Acquired Immunodeficiency Syndrome Anti Money Laundering Amphetamine-Type Stimulants Bureau De-Change Central Bank of Nigeria Customer Due Diligence Counter Financing of Terrorism Capital Market Operators Counter Proliferation Financing Designated Non-Financial Businesses and Professions Directorate of General Investigation Department of State Services Economic and Financial Crimes Commission Colombia's Revolutionary Armed Forces Financial Action Task Force Financial Crimes Enforcement Network Financial Institutions Federal Ministry of Justice Government Accountability Office Human Immunodeficiency Virus International Narcotics Control Board International Narcotics Control Strategy Report International Police Organisation – National Central Bureau Illicit Trafficking in Drugs Know Your Customer Methylenedioxymethamphetamine Money Laundering (Prevention and Prohibition) Act 2022 National Agency for Food and Drug Administration and Control National Insurance Commission Nigeria Customs Service National Drug Law Enforcement Agency Nigerian Financial Intelligence Unit National Inherent Risk Assessment Nigeria Immigration Service Nigeria Police Force New Psychoactive Substances National Security Agency 4 Page

OFC PCMD POS PSPS SAR SCUML SEC STRS ΤΡΡΑ UNDOC USD WHO Offshore Finance Centre Proceeds of Crime Management Directorate Point of Sale Payment Service Providers Suspicious Activity Reports Special Control Unit against Money Laundering Securities and Exchange Commission Suspicious Transaction Reports Terrorism (Prevention and Prohibition) Act 2022 United Nations Office on Drugs and Crime United States Dollar World Health Organization 5 Page

CHAPTER 1: INTRODUCTION Globally, the use of illicit drugs remains an issue of great concern. Globally, the use of illicit drugs remains an issue of great concern. Research indicates that in the past 12 months, one in every 17 individuals aged 15-64 has used drugs, with an estimated 296 million users in 2021. Research indicates that in the past 12 months, one in every 17 individuals aged 15-64 has used drugs, with an estimated 296 million users in 2021. The number has increased by 23 percent from 2011, mainly due to population growth. The number has increased by 23 percent from 2011, mainly due to population growth. Among the drugs used, cannabis is the most widely-used with an estimated 219 million users globally. Among the drugs used, cannabis is the most widely-used with an estimated 219 million users globally. While men constitute the majority of cannabis users, women account for 42 percent of users in North America¹. While men constitute the majority of cannabis users, women account for 42 percent of users in North America¹. Additionally, in 2021, an estimated 36 million people used amphetamines, 22 million used cocaine, and 20 million used "ecstasy"-type substances. Additionally, in 2021, an estimated 36 million people used amphetamines, 22 million used cocaine, and 20 million used "ecstasy"-type substances. Female users are prevalent in amphetamine-type stimulants and non-medical use of pharmaceuticals, while men dominate opiates and cocaine use. Female users are prevalent in amphetamine-type stimulants and non-medical use of pharmaceuticals, while men dominate opiates and cocaine use. Opioids continue to cause the most severe drug-related harm, including fatal overdoses. Opioids continue to cause the most severe drug-related harm, including fatal overdoses. An estimated 60 million people engaged in non-medical opioid use in 2021, with 31.5 million using opiates primarily². An estimated 60 million people engaged in non-medical opioid use in 2021, with 31.5 million using opiates primarily². Most of the proceeds generated from drug trafficking accumulate in the country of consumption, with organised criminal groups profiting from the local sale of drugs. Most of the proceeds generated from drug trafficking accumulate in the country of consumption, with organised criminal groups profiting from the local sale of drugs. However, as the funds move towards these criminal groups who manage the larger scale shipments, the proceeds and the goods can de-couple and the proceeds may move through more complex money laundering schemes. However, as the funds move towards these criminal groups who manage the larger scale shipments, the proceeds and the goods can de-couple and the proceeds may move through more complex money laundering schemes. Criminal groups that operate in an organized manner incur significant costs related to smuggling and procuring drugs and the creation of synthetic opioids (if they engage in clandestine production). Criminal groups that operate in an organized manner incur significant costs related to smuggling and procuring drugs and the creation of synthetic opioids (if they engage in clandestine production). These expenses include acquiring manufacturing tools and equipment and hiring specialized labor, such as chemists, to conduct the synthesis. These expenses include acquiring manufacturing tools and equipment and hiring specialized labor, such as chemists, to conduct the synthesis. The process may involve intermediary countries and companies facilitating precursor product smuggling. The process may involve intermediary countries and companies facilitating precursor product smuggling. To ensure the arrival of these products, criminal organizations may resort to bribing officials. To ensure the arrival of these products, criminal organizations may resort to bribing officials. Regarding the different stages of money laundering, the placement phase typically occurs within the country where the consumer is located. Regarding the different stages of money laundering, the placement phase typically occurs within the country where the consumer is located. The layering and integration phases often involve bulk cash smuggling, front companies, money value transfer services, trade-based money laundering, or correspondent banking arrangements (particularly for trade-related financial transfers). The layering and integration phases often involve bulk cash smuggling, front companies, money value transfer services, trade-based money laundering, or correspondent banking arrangements (particularly for trade-related financial transfers). Criminal organizations use a variety of money laundering schemes, indicating that there is no one "business model" for these activities3. Criminal organizations use a variety of money laundering schemes, indicating that there is no one "business model" for these activities3. The history of drug abuse in Nigeria dates back to the pre-colonization era when man settled from being a gatherer to a farmer. The history of drug abuse in Nigeria dates back to the pre-colonization era when man settled from being a gatherer to a farmer. Among the first crops, he cultivated included intoxicants such

1 https://www.unodc.org/res/WDR-2023/WDR23_Exsum_fin_SP.pdf 2 ibid 3 https://www.fatf-gafi.org/content/fatf-gafi/en/publications/Methodsandtrends/Money-laundering-fentanyl- synthetic-opioids.html 6 Page

as wine, strong tobacco and other hard substances. as wine, strong tobacco and other hard substances. However, the introduction of illicit drugs in Nigeria did not originate within the country. However, the introduction of illicit drugs in Nigeria did not originate within the country. World War II veterans who returned from Malaysia and Burma (present day Myanmar) brought concealed packets of cannabis as souvenirs, leading to the illegal cultivation of cannabis as farm produce. World War II veterans who returned from Malaysia and Burma (present day Myanmar) brought concealed packets of cannabis as souvenirs, leading to the illegal cultivation of cannabis as farm produce. Although drug trafficking was low between the 60s and 70s, research shows that the 1980s saw the introduction of drugs like Cocaine, Heroin, and Hallucinogens into the country. Although drug trafficking was low between the 60s and 70s, research shows that the 1980s saw the introduction of drugs like Cocaine, Heroin, and Hallucinogens into the country. The Nigerian Government took several measures to monitor drug production, circulation, distribution, and consumption in response⁴. The Nigerian Government took several measures to monitor drug production, circulation, distribution, and consumption in response⁴. The illicit trafficking of narcotic drugs and psychotropic substances pose a significant global challenge, with severe social, economic, and security implications. The illicit trafficking of narcotic drugs and psychotropic substances pose a significant global challenge, with severe social, economic, and security implications. This issue, intricately connected with money laundering activities, threatens the stability and development of nations worldwide. This issue, intricately connected with money laundering activities, threatens the stability and development of nations worldwide. Nigeria, as a prominent regional economic power in Africa, has been grappling with the intricate web of illicit drug trafficking and its associated money laundering schemes. Nigeria, as a prominent regional economic power in Africa, has been grappling with the intricate web of illicit drug trafficking and its associated money laundering schemes. Nigeria's geographical location, extensive transportation networks, and complex socio-economic dynamics make it vulnerable to drug trafficking and money laundering. Nigeria's geographical location, extensive transportation networks, and complex socio-economic dynamics make it vulnerable to drug trafficking and money laundering. Based on aggregate reporting to UNODC, by Nigeria and other countries, on the main cocaine trafficking routes during 2018-2021, trafficking of cocaine was reported from Nigeria to 20 countries or territories, including countries within the sub-region (Burkina Faso, Mali, Niger, Ghana, Senegal, Liberia), transit countries in Africa (Algeria, Ethiopia, Morocco), and countries and territories in the Asia- Pacific region (Australia, China, Hong Kong, India, Malaysia, Sri Lanka), in the Near and Middle East/ South-West Asia (Pakistan, Saudi Arabia, United Arab Emirates) and in Europe (Turkiye, United Kingdom). Based on aggregate reporting to UNODC, by Nigeria and other countries, on the main cocaine trafficking routes during 2018-2021, trafficking of cocaine was reported from Nigeria to 20 countries or territories, including countries within the sub-region (Burkina Faso, Mali, Niger, Ghana, Senegal, Liberia), transit countries in Africa (Algeria, Ethiopia, Morocco), and countries and territories in the Asia-Pacific region (Australia, China, Hong Kong, India, Malaysia, Sri Lanka), in the Near and Middle East/ South-West Asia (Pakistan, Saudi Arabia, United Arab Emirates) and in Europe (Turkiye, United Kingdom). Illicit trafficking in narcotic drugs and psychotropic substances is an international term that includes many offences involving narcotic drugs and psychotropic substances such as the production, cultivation, import, smuggling and promotion. Illicit trafficking in narcotic drugs and psychotropic substances is an international term that includes many offences involving narcotic drugs and psychotropic substances such as the production, cultivation, import, smuggling and promotion. The term extends to include crimes related to tools and means of transporting used in the commission of the offences and the diversion of precursors and chemicals used in the illicit manufacture of narcotic drugs and psychotropic substances as well as crimes related to proceeds used in or resulting from illicit trafficking according to Article (3) of the United Nations Convention Against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances (1988) (Vienna Convention). The term extends to include crimes related to tools and means of transporting used in the commission of the offences and the diversion of precursors and chemicals used in the illicit manufacture of narcotic drugs and psychotropic substances as well as crimes related to proceeds used in or resulting from illicit trafficking according to Article (3) of the United Nations Convention Against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances (1988) (Vienna Convention). According to the United Nations Office on Drugs and Crime (UNODC), Illicit drug trafficking is a global trade involving the cultivation, manufacture, distribution and sale of substances which are subject to drug prohibition laws. According to the United Nations Office on Drugs and Crime (UNODC), Illicit drug trafficking is a global trade involving the cultivation, manufacture, distribution and sale of substances which are subject to drug prohibition laws. The rising prevalence of illegal drug trafficking across the globe

4 https://peakng.com/history-of-drug-abuse-in-nigeria/ 5 https://www.unodc.org/documents/data-and-analysis/cocaine/Global_cocaine_report_2023.pdf 6 https://www.menafatf.org/sites/default/files/Illicit_Trafficking_and_ML_Eng.pdf 7 Page

(IDT) is one of the major threats to security, economic growth, and human life. (IDT) is one of the major threats to security, economic growth, and human life. The majority of Nigeria's borders are porous, allowing for the simple entry, transportation, and exit of drugs. The majority of Nigeria's borders are porous, allowing for the simple entry, transportation, and exit of drugs. However, Nigeria's struggling economy, insecurity, high under-employment rate, poverty, inability of the government to provide for basic needs, high level of corruption, and prevalence of the "get rich quick" syndrome among young people are among the many problems that contribute to the state's illicit drug trafficking industry. However, Nigeria's struggling economy, insecurity, high under-employment rate, poverty, inability of the government to provide for basic needs, high level of corruption, and prevalence of the "get rich quick" syndrome among young people are among the many problems that contribute to the state's illicit drug trafficking industry. According to WHO data, about 200,000 people per year die from drug abuse. According to WHO data, about 200,000 people per year die from drug abuse. More than 11 million disability-adjusted life-years are lost every year due to consumption of drugs (opiates, cocaine and amphetalmines), equivalent to some 19 years per 100 drug use.7 More than 11 million disability-adjusted life-years are lost every year due to consumption of drugs (opiates, cocaine and amphetalmines), equivalent to some 19 years per 100 drug use.7 Drug trafficking has profound negative effects, such as, increase in drug abuse and related psychological disorders, drug-induced crimes and generate illegal funds for criminals which can be deployed to corrupt public officials, undermine the integrity of national institutions, create distortions in the economy (e.g., inflation) create communal violence, fund insurgency and hijack political power. Drug trafficking has profound negative effects, such as, increase in drug abuse and related psychological disorders, drug-induced crimes and generate illegal funds for criminals which can be deployed to corrupt public officials, undermine the integrity of national institutions, create distortions in the economy (e.g., inflation) create communal violence, fund insurgency and hijack political power. Through the transiting of illicit drugs, traffickers are able to develop new markets in the countries of transit thereby creating an active drug user population in the country of transit.8 Through the transiting of illicit drugs, traffickers are able to develop new markets in the countries of transit thereby creating an active drug user population in the country of transit.8 The 2022 National Inherent Risk Assessment (NIRA) of Money laundering in Nigeria has identified drug trafficking as a high-risk predicate crime in Nigeria. The 2022 National Inherent Risk Assessment (NIRA) of Money laundering in Nigeria has identified drug trafficking as a high-risk predicate crime in Nigeria. The report highlights the proficiency of Nigerian drug cartels in dealing with and trafficking drugs, including psychotropic substances. The report highlights the proficiency of Nigerian drug cartels in dealing with and trafficking drugs, including psychotropic substances. The use of clandestine laboratories for methamphetamine production has been discovered in various locations in the country. The use of clandestine laboratories for methamphetamine production has been discovered in various locations in the country. As a result, Nigeria is becoming a significant consumer of hard drugs, transitioning from a transit country. As a result, Nigeria is becoming a significant consumer of hard drugs, transitioning from a transit country. The National Drug Law Enforcement Agency (NDLEA) has reported various drug syndicates operating with high levels of sophistication. The National Drug Law Enforcement Agency (NDLEA) has reported various drug syndicates operating with high levels of sophistication. Some cartels operate independently, using different laundering methods, with the possibility of connivance between the subjects of investigation, bank officials, and professionals like accountants and lawyers. Some cartels operate independently, using different laundering methods, with the possibility of connivance between the subjects of investigation, bank officials, and professionals like accountants and lawyers. The report also notes that drug trafficking generates many proceeds, with over 3 million USD worth of drugs seized between 2019 and 2021. The report also notes that drug trafficking generates many proceeds, with over 3 million USD worth of drugs seized between 2019 and 2021. Similarly, it has been reported that Nigeria is a significant producer and consumer of cannabis⁹, which was confirmed by the NIRA findings. Similarly, it has been reported that Nigeria is a significant producer and consumer of cannabis⁹, which was confirmed by the NIRA findings. Four years ago, Nigeria had the highest number of cannabis consumers globally, with 10.6 million people using the drug. Four years ago, Nigeria had the highest number of cannabis consumers globally, with 10.6 million people using the drug. The 2022 World Drug Report reveals that illegal drug markets can negatively affect the municipal, community, or

7 https://www.unodc.org/documents/data-and-analysis/Studies/Illicit_financial_flows_2011_web.pdf 8 https://www.giaba.org/media/f/118_final-drugs-typologies-report-dev071811---english.pdf 9 Drug trafficking, consumption rate worry stakeholders | The Guardian Nigeria News - Nigeria and World News News The Guardian Nigeria News – Nigeria and World News 8 Page

individual environment. individual environment. The carbon footprint of indoor cannabis cultivation is much higher than outdoor cultivation, with estimates ranging from 16 to 100 times more. The carbon footprint of indoor cannabis cultivation is much higher than outdoor cultivation, with estimates ranging from 16 to 100 times more. Additionally, the carbon footprint of 1 kilogram of cocaine is 30 times greater than that of cocoa beans. Additionally, the carbon footprint of 1 kilogram of cocaine is 30 times greater than that of cocoa beans. Environmentally harmful practices associated with illegal drug production include deforestation from cocoa cultivation and the generation of large amounts of waste during the production of synthetic drugs. Environmentally harmful practices associated with illegal drug production include deforestation from cocoa cultivation and the generation of large amounts of waste during the production of synthetic drugs. This waste can be up to 30 times the volume of the finished product, and its disposal can directly or indirectly impact organisms, animals, and the food chain. This waste can be up to 30 times the volume of the finished product, and its disposal can directly or indirectly impact organisms, animals, and the food chain. Thus, at every stage of the production and supply of class A narcotics 10, there is intense competition between rival organized crime groups that frequently results in fatalities. Thus, at every stage of the production and supply of class A narcotics 10, there is intense competition between rival organized crime groups that frequently results in fatalities. Additionally, there is corruption across the entire drug supply chain, including the involvement of dishonest port and airport personnel. Additionally, there is corruption across the entire drug supply chain, including the involvement of dishonest port and airport personnel. Consequently, drug trafficking organizations frequently engage in a variety of other crimes, and the money made from selling illegal narcotics is used to finance these other crimes, such as purchasing illegal weapons and supporting terrorism. Consequently, drug trafficking organizations frequently engage in a variety of other crimes, and the money made from selling illegal narcotics is used to finance these other crimes, such as purchasing illegal weapons and supporting terrorism. Drug trafficking-related crimes are typically violent, have a clear correlation to illegal usage of weapons and gang-related knife attacks, and traffickers frequently prey on the young and defenseless. Drug trafficking-related crimes are typically violent, have a clear correlation to illegal usage of weapons and gang-related knife attacks, and traffickers frequently prey on the young and defenseless. In the above light, raising awareness among reporting entities and law enforcement agencies about the different methods used by drug traffickers to move illegal drugs and launder their profits is crucial. In the above light, raising awareness among reporting entities and law enforcement agencies about the different methods used by drug traffickers to move illegal drugs and launder their profits is crucial. To achieve this goal, a team of experts from agencies responsible for regulating and enforcing drug trafficking offences and monitoring suspicious transactions were selected to collaborate with NFIU in conducting this study in order to detect and prevent drug trafficking in Nigeria. To achieve this goal, a team of experts from agencies responsible for regulating and enforcing drug trafficking offences and monitoring suspicious transactions were selected to collaborate with NFIU in conducting this study in order to detect and prevent drug trafficking in Nigeria. The NFIU leverages section 3(1)(0) and 23(2)(b) of the Nigerian Financial Intelligence Unit Act, 2018 to conduct the study. The NFIU leverages section 3(1)(0) and 23(2)(b) of the Nigerian Financial Intelligence Unit Act, 2018 to conduct the study. 1.1 OBJECTIVE OF THE REPORT The main purpose of this report is to investigate and understand the different types and methods used by individuals and criminal organizations involved in illicit drug trading in Nigeria. The main purpose of this report is to investigate and understand the different types and methods used by individuals and criminal organizations involved in illicit drug trading in Nigeria. It will also examine the ways they conceal the proceeds generated from drug trafficking, using both traditional and modern methods of money laundering. It will also examine the ways they conceal the proceeds generated from drug trafficking, using both traditional and modern methods of money laundering. By studying these patterns, law enforcement agencies, policymakers, and stakeholders can gain a better understanding and develop specific strategies to effectively disrupt and dismantle these criminal networks. By studying these patterns, law enforcement agencies, policymakers, and stakeholders can gain a better understanding and develop specific strategies to effectively disrupt and dismantle these criminal networks. The report also aims to achieve the following objectives: The report also aims to achieve the following objectives:

10 This is an illegal narcotic drug classified as being of the most harmful and addictive kind, possession or sale of which incurs the most severe legal penalties. 9 Page

1. To analyze and understand criminal networks involved in drug trafficking, activities and their impact on Nigeria's public health, security, and economic stability.
2. To analyze and understand criminal networks involved in drug trafficking, activities and their impact on Nigeria's public health, security, and economic stability.
3. Review the existing legal and regulatory frameworks to identify gaps and challenges in enforcing and implementing anti-money laundering, counter financing of terrorism, counter financing of proliferation (AML/CFT/CPF) measures.
4. Review the existing legal and regulatory frameworks to identify gaps and challenges in enforcing and implementing anti-money laundering, counter financing of terrorism, counter financing of proliferation (AML/CFT/CPF) measures.
5. Enhance International cooperation, information sharing, and capacity building crucial to combating illicit activities, focusing on Nigeria.
6. Enhance International cooperation, information sharing, and capacity building crucial to combating illicit activities, focusing on Nigeria.
7. To highlight vulnerable sectors and jurisdictions involved in the organized crime of illicit drug trafficking and identify typologies related to drug trafficking and money laundering to facilitate evidence-based policy-making and targeted interventions.
8. To highlight vulnerable sectors and jurisdictions involved in the organized crime of illicit drug trafficking and identify typologies related to drug trafficking and money laundering to facilitate evidence-based policy-making and targeted interventions.
9. To provide recommendations based on the findings to enhance the capacity of law enforcement and intelligence agencies, policymakers, reporting entities and stakeholders and promote collaboration to disrupt and dismantle criminal networks involved in money laundering through drug trafficking.
10. To provide recommendations based on the findings to enhance the capacity of law enforcement and intelligence agencies, policymakers, reporting entities and stakeholders and promote collaboration to disrupt and dismantle criminal networks involved in money laundering through drug trafficking. 1.2 METHODOLOGY/ SCOPE/LIMITATION To compile this report, an extensive review of existing literature, reports, open-source information and studies on illicit drug trafficking and money laundering in Nigeria has been conducted. To compile this report, an extensive review of existing literature, reports, open-source information and studies on illicit drug trafficking and money laundering in Nigeria has been conducted. Valuable insights from previous typologies reports, United Nations conventions such as the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, and other relevant international agreements have been incorporated to provide a comprehensive overview of the current landscape. Valuable insights from previous typologies reports, United Nations conventions such as the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, and other relevant international agreements have been incorporated to provide a comprehensive overview of the current landscape. The report also benefits from the analysis of questionnaire responses from drug enforcement agencies, investigative agencies, border control agencies and reporting entities identified to be vulnerable to money laundering through illicit trafficking in drugs & psychotropic substances. The report also benefits from the analysis of questionnaire responses from drug enforcement agencies, investigative agencies, border control agencies and reporting entities identified to be vulnerable to money laundering through illicit trafficking in drugs & psychotropic substances. 10 | Page

CHAPTER 2: CONCEPTUAL FRAMEWORK FOR ILLICIT TRAFFICKING IN NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES This section serves as a foundational component of the report by providing clear definitions of key terms and concepts related to illicit trafficking in narcotic drugs and psychotropic substances, as well as money laundering. This section serves as a foundational component of the report by providing clear definitions of key terms and concepts related to illicit trafficking in narcotic drugs and psychotropic substances, as well as money laundering. A shared understanding of these terms is essential for effective communication and comprehension throughout the report. A shared understanding of these terms is essential for effective communication and comprehension throughout the report. The definitions provided herein are based on established international conventions, scholarly literature, and legal frameworks. The definitions provided herein are based on established international conventions, scholarly literature, and legal frameworks. 2.1.DEFINITION OF NARCOTIC DRUGS: The Single Convention on Narcotic Drugs, 1961, and as amended by the 1972 Protocol stipulated in Article 1(j) that “drug means any of the substances in Schedule I and II, whether natural or synthetic” and in Article 1(u), the Single Convention stipulated that “Schedule I”, “Schedule II”, “Schedule III” and “Schedule IV” mean the correspondingly numbered lists of drugs or preparations annexed to this Convention, as amended from time to time in accordance with Article 311”. 2.1.