The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to immediately freeze the accounts, funds and other assets belonging to individuals and organisations designated for alleged terrorism financing.
The directive was contained in a circular issued on Thursday and signed by the Director of Compliance, Olubunmi Ayodele-Oni.
According to the apex bank, the action followed recent designations by the Nigeria Sanctions Committee and the United States Treasury Department’s Office of Foreign Assets Control (OFAC), which identified individuals and entities allegedly involved in financing terrorist activities.
The United States recently imposed sanctions on three individuals and six entities accused of providing financial support to the Islamic State (ISIS). Among those sanctioned are three Nigerian bureau de change (BDC) operators said to be operating from Lagos and Kano.
The CBN said all financial institutions must immediately enforce the sanctions by freezing all funds and economic resources linked to the designated persons and entities.
The circular directed banks to “immediately freeze, without prior notice, all funds, assets, and other economic resources belonging to, owned, held, or controlled (directly or indirectly) by the designated persons and entities”.
The regulator also ordered financial institutions to screen their existing customers, beneficial owners, transactions and business relationships against the updated sanctions list to identify any matches.
It further instructed banks to ensure that no funds, financial services, or other economic resources are made available, directly or indirectly, to any of the listed individuals or organizations.
As part of the compliance measures, the apex bank directed financial institutions to file Suspicious Transaction Reports (STRs) with the Nigerian Financial Intelligence Unit (NFIU) for all confirmed or attempted matches involving the designated persons and entities.
Banks are also required to “submit reports to the CBN within 48 hours, detailing the status of any matches, affected accounts, amounts frozen and actions taken”.
The circular added that “Nil returns are mandatory where no matches are identified.”
The CBN further instructed banks and other financial institutions to strengthen internal monitoring systems to detect possible terrorism financing activities. It identified red flags to include rapid movement of funds, the use of money service businesses to disguise transactions and financial dealings involving jurisdictions considered to pose a high terrorism financing risk.
The regulator warned that failure to comply with the directive would attract regulatory sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020, the Terrorism (Prevention and Prohibition) Act 2022, and other applicable laws and regulations.
The apex bank said it would intensify supervisory oversight through off-site reviews, on-site examinations and other compliance engagements to ensure that financial institutions fully implement the sanctions measures.
The latest directive forms part of Nigeria’s ongoing efforts to strengthen its anti-money laundering and counter-terrorism financing framework, amid growing domestic and international pressure to disrupt the financial networks of terrorist organizations and other criminal groups operating within and outside the country.
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