CBN laments loopholes in Nigeria's financial regulations

By The Citizen

The Central Bank of Nigeria (CBN) has decried the perceived loopholes in the nation's legal and regulatory system, which gave rise to its inclusion in the 'Grey List' of countries that had not made appreciable progress in Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime by the Financial Action Task Force (FATF).

This was contained in a statement by the Director of Corporate Communications of the premier bank, Ugochukwu Okoroafor, in reaction to alleged freezing and closure of accounts of religious organizations on suspicion of links with terrorist groups by CBN.

He said that CBN has not ordered the closure or freezing of the bank account of any religious body or any institution whatsoever, as alleged in the publications and posts (not The Guardian), but called on the Nigerian authorities to rise to the challenges of financial processes and procedures.

The statement said: 'Prior to 2006, Nigeria was on the infamous list of the Non- Cooperating Countries and Territories (NCCTs) of FATF'- a global watchdog on financial crimes, but was removed as the government took stringent actions thereafter.

'However, by 2007, as a result of loopholes in Nigeria's legal and regulatory system, the country was included in the 'grey list'. It was therefore incumbent on Nigerian authorities to ensure that its financial processes and procedures as well as the provisions of the Money Laundering Prohibition Act (MLPA) of 2011 and the Prevention of Terrorism (PTA) Act of 2011, were in conformity with FATF recommendations and international best practice.'

It further noted that the recent measure, which mandated all Designated Non-Financial Businesses and Professions (DNFBPs) operating accounts in all financial institutions to update their account information was not targeted at any particular organization, but to ensure that their respective businesses and vocations were registered as stipulated by the relevant statutes.

DNFBPs refer to dealers in jewelry, precious metals and stones, cars and luxury goods, audit firms, tax consultants, clearing and settlement companies, lawyers, notaries, other independent legal practitioners and chartered accountants, trust and company service providers (who provide services to third parties), hotels, casinos (including internet and ship- based casinos).

Others are supermarkets, real estate agents, non- governmental organisations (NGOs), religious and charitable organisations, or such other businesses or professions as the Federal Ministry of Trade and Investments, or appropriate regulatory authorities may, from time to time, designate.

The requirement to this effect is the presentation of evidence of registration, specifically, certificate of registration, showing registration number with the Special Control Unit Against money Laundering.

The CBN had issued several circulars requiring all such account holders classified as DNFBPs to update their account information since early 2012, while shifting the deadline for compliance three times, with the last expiring by December 2013.

Ugochukwu in the statement noted that the new deadline has neither come nor enforcement carried out, adding that the circulars are in line with global best practice and consistent with the laws of the Federal Republic of Nigeria.

'We wish to state, however, that upon the expiration of this final deadline, the CBN shall ensure that FATF rules are complied with. We, therefore, urge all affected DNFBPs to comply as soon as possible,' the statement added.