Money Laundering Act: CBN Moves Against Non-compliant Banks, Others




The Central Bank of Nigeria (CBN) has rolled out sanctions for banks and other financial institutions (OFI) that do not comply with the new Anti Money Laundering and Combating Financial Terrorism (AML/CFT) Act. The apex bank’s move follows the recommendation of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) that Nigeria step up its enforcement of the new law. Eyes Of Lagos gathered that,  CBN, in a circular issued and signed by its director, Financial Policy and Regulation Department, Kevin Amugo, said the new sanctions which had been gazetted since February 2018, would take immediate effect. “Pursuant to the requirements of the Financial Action Task Force recommendation 35 on effective proportionate and dissuasive sanctions at the 2007 Mutual Evaluation recommendation that Nigeria’s AML/CFT sanctions regime be reviewed and made to be proportionate and dissuasive, the CBN, in collaboration with the Office of the Attorney General of the Federation, has developed a robust administrative sanctions regime. “Banks and other financial institutions are by this circular informed of the attached CBN AML/CFT administrative sanctions regime, the application of which comes into effect as at the date of the gazette,” the circular read. According to the new administrative sanctions, deposit money banks (DMBs) who fail to establish written AML/CFT policies and procedures will be slammed a N20 million fine while microfinance banks (MFBs), finance companies (FCs), bureaux de change (BDCs), state primary mortgage banks(PMBs) and national PMBs will be fined N300,000, N500,000, N1 million and N5 million respectively. “Deposit money banks which fail to put in place guidelines for risk assessment and profiling of customers in the institutions will be slammed a fine of N3 million, the chief risk officer will be slammed with a fine of N1 million – they will be charged N100,000 per account; while managing directors or heads of risk management units of MFB, FC/BDC/state MFB, PMB/national MFB and other financial institutions will be fined a minimum of N100,000, N300,000, N500,000 and N1 million.” The circular also stated that each member of the board of a DMB with non-existent policy on prohibition of numbered or anonymous accounts and accounts in fictitious names will be penalised with a fine N1 million, the DMB will be fined N15 million while the board members of financial institutions, such as MFB, FC/BDC/state MFB, PMB/national MFB, will be slammed with a fine of N100,000, N300,000 and N500,000 each. The financial institutions will be fined a minimum of N300,000, N500,000, N1 million and N3 million. “Failure of the board and management to consider and document ML/TF risks as part of the approval process for the expansion of business (including introduction of new products and services) will attract a penalty of N15 million on the DMB and financial institutions such as MFB, BDC/FC/state MFB, state PMB/national MFB, national MFB will be fined N100,000, N200,000, N300,000 and N500,000 respectively.” He further stated that failure by DMBs to appoint an AML/CFT compliance officer in each office branch/subsidiary or cluster area will attract a penalty of N500,000 on each member of the board and N10 million for DMB, each member of the board of national MFB and national PMB will be fined N300,000 and N500,000 respectively, while OFIs such as national MFB and PMB will be charged N2 million and N5 million respectively. He warned banks and financial institutions to comply with the rules to avoid them being penalised.

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