Banks to report abnormal transactions by Governors, others to EFCC

By Masahudu Ankiilu Kunateh - Ghanaian Chronicle
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Financial institutions in Nigeria, especially the banks, have been directed by the Central Bank of Nigeria to report any abnormal transactions from all political office holders and members of their families to the Economic and Financial Crime Commission (EFCC).

Specifically, banks are to report to the EFCC and other relevant authorities' abnormal transactions involving heads of State or government, Governors, local government chairmen, senior politicians, senior government officials and judicial or military officials.

Others to be reported are the senior executives of state owned corporations, important political party officials, family members or close associates of politically exposed person (PEP) and members of royal families.

In a revised CBN anti-money laundering/counter terrorism financing (AML/CFT) manual pasted on the CBN's website yesterday, financial institutions are required to put in place appropriate risk management systems to determine whether a potential customer or existing customer or the beneficial-owner is a politically exposed person.

CBN said: “Financial institutions are also required to obtain senior management approval before they establish business relationships with a PEP and to render monthly returns on their transactions with PEPs to the CBN and NFIU”

“Where a customer has been accepted or has an ongoing relationship with the financial institution and the customer or beneficial-owner is subsequently found to be or becomes a PEP, the financial institution is required to obtain senior management approval in order to continue the business relationship.”

CBN also directed financial institutions to take reasonable measures to establish the source of wealth and the sources of funds of customers and beneficial-owners identified as PEPs and report all anomalies immediately to the CBN and other relevant authorities.

It also said that financial institution in a business relationship with a PEP is required to conduct enhanced ongoing monitoring of that relationship.

“In the event of any transaction that is abnormal, FIs are required to flag the account and to report immediately to the CBN and other relevant authorities such as EFCC/NFIU”, it said.

According to a draft copy of the revised edition of the anti-money laundering/counter terrorism financing (AML/CFT), sanctions provided are not only proportionate and dissuasive but such that will affect legal persons/financial institutions and their directors/senior management staff also, depending on the requirements breached.

It said: “Every financial institution which fails to comply or contravenes the provisions contained in this manual shall be subject to sanction by the CBN.

“Any individual, being an official of a financial institution, who fails to take reasonable steps to ensure compliance with the provisions of this, manual, shall be sanctioned accordingly.

“For purpose of emphasis, incidence of false declaration or false disclosure by the financial institution or its officers shall be subject to administrative review and sanction as stipulated in this manual.”

CBN also said that any financial institution or its officer that contravenes the provisions of the manual shall be subject to applicable sanctions, which include imposition of a penalty not exceeding N2, 000, 000 from the first to the fifth instances on each offence.

“On the sixth instance, the CBN shall set up an investigation panel to examine the institution's operations and identify the role of the Board, Management and officers in respect of the malpractice, recommend additional punishment on all officers that are culpable and provide recommendations on ways and means that will stop the financial institution from committing such malpractice in future and this includes obtaining an undertaking from the financial institution.”