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To encourage compliance with Anti Money Laundering, combating the financing of Terrorism laws and regulations, and protect financial institutions from being used for financial crimes, the Central Bank of Nigeria issued a new regulation in 2022 that is titled “Central Bank of Nigeria (Anti Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction In Financial Institutions) Regulations.” This article will address some of the frequently asked questions concerning the new regulation.
The aim of the guidelines are provided for in SECTION1(a-c)[i] of the Regulations, they are:
The Objectives of the guidelines are[ii] as listed below:
i. To Guide promoters in complying with Anti Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing requirements in license applications for banks and other financial institutions.
ii. Ensure that proceeds of crimes are not used to establish financial institutions.
iii. Ensure that criminals do not own or control financial institutions in Nigeria.
iv. Identify and verify the beneficial owners of financial institutions.
v. Ensure that promoters of financial institutions put in place appropriate and effective measures to mitigate ML/TF/PF risks.
These Guidelines cover the minimum Anti Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing requirements for license applications for banks and other financial institutions under the regulatory purview of the Central Bank of Nigeria.
The Guidelines must be adhered to by any individual or group (the Applicant) that submits an application to the CBN for a license to perform banking services or any other financial services subject to CBN regulation.
As compliance with the Guidelines is now a requirement for the issuance of a license, applicants will be asked to provide evidence of conformity with the Guidelines as part of the license application process.
In addition to adhering to other licensing requirements contained in the Guidelines by the CBN, The CBN’S FINANCIAL POLICY AND REGULATION DEPARTMENT[iii] gave requirements that promoters of financial institutions must submit in their application for approval-in-principle. They are:
• Compliance structure, including designation and status of a compliance officer;
• Employee screening and monitoring.
• Customer identification and verification.
• Customer due diligence measures;
• ML/TF/PF Risk Assessment;
• AML/CFT/CPF training of the board, senior management, and other employees;
• Independent assessment of the AML/CFT/CPF Programme;
• Suspicious transaction monitoring, reporting, and record keeping
The following information/documents must be provided by financial institution promoters in order to identify and confirm the beneficial owners:
The CBN may refuse[iv] an application for a license or a party to an application, such as a beneficial owner, shareholder, director, or senior management staff, based on the grounds provided in the Guidelines.
The CBN may refuse an application for any of its licenses or refuse a party to an application if:
The CBN provided a template of the beneficial owner’s declaration form in the Guidelines.[v]
[i] https://www.cbn.gov.ng/Out/2022/FPRD/AML%20CIRCULAR%20AND%20REGULATIONS%20MERGED.pdf
[ii] https://www.cbn.gov.ng/Out/2022/FPRD/Circular_and_AML_Licensing_Guideline.pdf
[iii] https://www.cbn.gov.ng/Documents/FPRGuidelines.asp
[iv] https://www.cbn.gov.ng/Out/2022/FPRD/Circular_and_AML_Licensing_Guideline.pdf
[v] Contained in Appendix 1
Written by Esegi Maureen for The Trusted Advisors
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