The fact that some Financial Institutions (FIs) do not render returns on a timely basis is a challenge that needs to be addressed by stakeholders in the fight against money laundering and terrorism financing.
Most challenges with the rendition of returns, according to Tokunbo Martins, director, banking supervision, Central Bank of Nigeria (CBN), centre on quality, accuracy, completeness and timeliness of the returns being rendered as information value lies not in itself but in how it affects its objective for which it is required.
Most FIs fail to understand the importance of the renditions and as such render poor quality returns. Some of the affected reports include the tiered KYC returns, annual AML/CFT employee training programme and quarterly employee training. In addition, some FIs do not render AML/CFT returns in the prescribed format, which in turn makes appraisal of the returns very challenging.
Some FIs do not render returns on a timely basis. Martins said there were instances where FIs render suspicious transactions to the NFIU after a year of consummating such transactions contrary to extant laws and regulations.
“We cannot dispute the fact that the battle to counter money laundering can only be accomplished through efficient and effective record keeping and maintenance of information as well as the collective and unrelenting determination of all stakeholders,” she said at the AML workshop organised by Chartered Institute of Bankers of Nigeria (CIBN) in Abuja.
According to her, the fight against ML and FT cannot succeed without a robust system of gathering and analysing data. The laws and regulations relating to rendition of returns and maintenance of records under money laundering are derived from the FATF 40 recommendations revised in 2012. Recommendation 5-12 addresses customer due diligence and record keeping, while 13-16 addresses reporting of suspicious transactions and compliance.
The Money Laundering Prohibition Act (MLPA), 2011 and CBN AML/CFT Regulation, 2013, also provides the requirements for record keeping and reporting. The duties of banks with respect to reporting are clearly stated in Section 2, 6 and 10 of the MLPA 2011 (as amended).
FIs are required to maintain, for at least five years, all necessary records on transactions, both domestic and international, to enable them comply swiftly with information requests from the competent authorities. Such records must be sufficient to permit reconstruction of individual transactions so as to provide, if necessary, evidence for prosecution of criminal activity.
Relevant provisions as contained in these laws and regulations were intended to aid the identification of the source, volume and movement of currency and other monetary instruments transported or transmitted into or out of Nigeria, or deposited in financial institutions in the country. This is aimed at protecting the financial institutions and the financial system from abuses through criminal activities, including ML/TF and other illicit financial transactions.
Emmanuel Moore Abolo, chief risk/compliance officer, Nigerian Export-Import Bank, said appropriate measures were in place to ensure that ML risks were taken into account in daily operations, development of new financial products, establishing new business relationships and changes in the customer profile.
HOPE MOSES-ASHIKE
