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Monday, July 22, 2024

CBN issues new guidelines to check terrorism, money laundering

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The Central Bank of Nigeria, CBN, has issued new guidelines to banks to help in the implementation of Regulation 22 on Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions.

The updated guideline with the reference, CBN AML/CFT/CPF Regulations, the CBN says, will help to check abuses in the financial system.

According to the CBN, the objective of the guidance was to assist financial institutions in identifying and verifying the Beneficial Owners (BO) of legal persons and legal arrangements in line with extant anti-money laundering laws and regulations.

The CBN in a circular dated January 12, 2023, and directed to all banks and Other Financial Institutions (OFIs), which was signed by the bank’s Director, Financial Policy and Regulations Department, Chibuzor Efobi, said though the guidance was not exhaustive and would be amended as necessary, it, however, applies to financial institutions under the regulatory purview of the central bank.
The CBN defined BO as the “natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or legal arrangement”.
It stated that in line with the Financial Action Task Force (FATF), consideration must be given to the “natural person(s) who have ultimate (actual) ownership and control over the corporate vehicle, not necessarily the legal owner, or the person(s) entitled on paper to do so, but the natural person(s) who exert effective control over the corporate vehicle, or on whose behalf the transaction is being conducted”.

Essentially, BO refers, among other things, to the natural person(s) who ultimately owns and holds at least five percent of the issued shares in the legal person either directly or indirectly; holds a right directly or indirectly, to appoint or remove the majority of the directors or similar positions of the legal person, and on whose behalf a transaction is being conducted; and/or who exercise ultimate effective control over a legal person or legal arrangement – exercise significant influence or control, directly or indirectly, over the legal person.

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