InNigeria today, there are some names you should know when it comes to policymaking and managing compliance and money laundering issues. Let me give you a few.
- Moses Abayomi Ademosu – Assistant director at Central Bank of Nigeria
- Anthony Ifechukwu – Director governance office at CBN
- Okwu Joseph Nnanna – He has been the Chairman and Director at Africa Finance Corporation since March 29, 2017. Dr. Nnanna is a Deputy Governor (Financial System Stability) Central Bank of Nigeria on February with over three decades of experience as an economist and banker. Dr. Nnanna rejoined the Central Bank of Nigeria in 1994 and was appointed an Advisor to the Governor of the Central Bank.
- Godwin Emefiele – He has been Governor of the Central Bank of Nigeria since June 3, 2014. He served as Chief Executive officer and Group Managing Director of Zenith Bank Plc.
“Corruption, money laundering, and tax evasion are global problems, not just challenges for developing countries.”
On February 11, 2019 the Central Bank of Nigeria released a 37-paged document detailing its position on combating the financing of terrorism and Anti –money laundering (AML/CFT) policy and procedures. The manual contains information on relevant laws and regulations, whistle blower protections, KYC documentation requirement, customer due diligence, investigations amongst many other key issues.
The manual provides good information on some key terms and lexicon in the industry. See more detailed definitions here.
According to the manual, The Central Bank of Nigeria Act 2007 (as amended) enumerated the core functions of the Bank as follows:
- Ensure monetary and price stability
- Issue legal tender currency in Nigeria
- Maintain external reserves to safeguard the international value of the legal tender currency
- Promote a sound financial system in Nigeria and;
- Act as Banker and provide economic and financial advice to the Federal Government.
Laws are spider webs through which the big flies pass and the little ones get caught.
Reading this manual was totally enjoyable and hopefully you do enjoy it too. See the complete document at the end of this article.
A key area that caught my attention however was the section on CDD (Customer Due Diligence).
The manual gave 3 situations that would require a financial institution to complete customer due diligence to include:
- When banking relationships are established
- Where there is a suspicion of money laundering or terrorist financing
- When the Bank has doubts about the validity or adequacy of previously obtained customer identification data.
In the US and most other countries with more robust policies, CDD is a lifelong process and is required both at onboarding and periodically over the banking relationship with a client. The frequency of review however, majorly depends on the risk rating of the client. This existing process in Nigeria would not prove to be effective in combating money laundering and terrorist financing, as customers’ information would most definitely change over the lifecycle of their account. In many cases, these changes do not necessarily have to meet the 3 requirements stated above.
A poor CDD process and procedure would mean wrong account categorization, which invariably affects customer’s profiling thus affecting the effectiveness of the transaction monitoring process.
If customer due diligence is lapse, the financial institutions would remain vulnerable to the bad guys.
When it can be said by any country in the world, my poor are happy, neither ignorance nor distress is to be found among them, my jails are empty of prisoners, my streets of beggars, the aged are not in want, the taxes are not oppressive, the rational world is my friend because I am the friend of happiness. When these things can be said, then may that country boast its constitution and government. Independence is my happiness, the world is my country and my religion is to do good.
Other issues analyzed in the manual include account monitoring and suspicious transaction reporting.
The trust building process adopted by some fraudsters before eventually using their account for money laundering purposes was rightfully highlighted. CBN urges banks therefore to accept any opportunity to update information on customers in order to maintain a high standard of monitoring.
The goal of compliance is to protect our institutions. Boldness and tenacity is a must have in this industry.
Full Manual Here.
