The Central Bank of Nigeria has issued a fresh directive to banks, payment service banks, and fintech firms, warning them to strengthen their sanctions compliance frameworks or face enforcement actions.
In a circular signed by Amonia Opusunju for the Director of the Compliance Department, the CBN emphasized the obligation of all financial institutions to adhere strictly to both domestic and international sanctions lists.
The CBN emphasized that financial institutions must comply with specific sanctions lists, including: the United Nations Consolidated Sanctions List, the Nigerian Sanctions List in line with the Terrorism (Prevention and Prohibition) Act 2022, and the CBN’s own guidelines on targeted financial sanctions related to terrorism and terrorism financing.
The CBN further stressed that institutions must have a robust and responsive sanctions compliance structure to prevent any violations.
Organizations must proactively monitor and respond to updates on sanctions lists, ensuring their systems do not facilitate transactions involving designated individuals or entities. This includes conducting real-time screening of customers, transactions, and beneficial owners to ensure compliance.
“Financial Institutions are required to maintain a robust and dynamic sanctions compliance framework that enables them to Identify and respond promptly to updates or changes across all applicable sanctions lists; Prevent the use of their systems and platforms for transactions involving designated individuals or entities; Conduct real-time screening of customers, transactions, and beneficial owners; and File appropriate reports with the Nigerian Financial Intelligence Unit and notify the CBN, where necessary,” the circular read.
The apex bank also directed institutions to file reports with the Nigerian Financial Intelligence Unit and notify the CBN when necessary.
It cautioned that non-compliance could lead to enforcement action or regulatory penalties.
“The effectiveness of sanctions compliance programmes must be regularly reviewed and aligned with legal and regulatory requirements and expectations,” the circular stated.
This follows the global scrutiny on financial crimes intensifies, particularly regarding anti-money laundering and counter-terrorism financing regulations.
Nigeria, seeking to improve its standing with global bodies like the Financial Action Task Force, has been increasing oversight within its financial sector.
The CBN’s reminder underscores the importance for fintechs and other non-traditional financial players to integrate compliance mechanisms into their platforms, especially as innovation in the sector expands.
The regulator emphasized that all institutions under its oversight must take the reminder seriously, stressing that compliance is mandatory, not optional.
