CBN Introduces Guidelines to Curb Money Laundering in the Financial Sector

The Central Bank of Nigeria (CBN) has issued guidelines on anti-money laundering and combating the financing of terrorism for other financial institutions (OFIs).

The director of the financial policy and regulation department Chibuzo Efobi signed a circular in which guidance was issued to assist the sub-sector in the 

identification, assessment, as well as mitigation of money laundering and terrorist financing (ML/TF) risks in their operations.

The risks may originate from customers, products, services, business practices or delivery methods and jurisdictions or geographical presence.

The CBN said that while carrying out its supervisory activities, it observed that OFIs have unique challenges in the implementation of an effective risk-based approach to the AML/CFT programme that meets the standard of regulatory requirements.

The Guidance Note will be applied to assist the institutions in taking appropriate measures to review, monitor and mitigate the identified risk. OFIs could use more stringent tools to identify and assess ML/TF risks in their institutions. However, irrespective of the method adopted, the risk assessment should be updated regularly, the CBN said.

According to the CBN, the determination of criminals and criminal organizations to use other financial institutions (OFIs) to launder funds and finance terrorist activities poses threats to the financial system globally. “This threat continues to be a source of concern to the Central Bank of Nigeria,” the note stated.

“OFIs understand their business better and thus, are best placed to identify and determine the inherent risks their business faces from money laundering (ML) and terrorism financing (TF). They are therefore expected to develop appropriate strategies to manage, mitigate and control these risks,” the CBN said in the note.

The CBN explained that the Guidance Note does not constitute secondary regulation or a new regulatory requirement. It is intended to assist OFIs to comply with measures contained in the CBN AML/CFT Regulations, 2013 (as amended) and other relevant AML/CFT laws.

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