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The Central Bank of Nigeria (CBN) has issued a regulatory reminder to all banks, payment service banks, and other financial institutions on the need to uphold their obligations regarding sanctions compliance.
The reminder, signed by Amonia Opusunju on behalf of the director, Compliance Department, serves as a reiteration of existing directives which require strict adherence to applicable sanctions regimes.
According to the CBN, financial institutions must continue to comply with a range of sanctions frameworks, including the United Nations Consolidated Sanctions List and the Nigerian Sanctions List.
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The Nigerian Sanctions List is maintained in accordance with the Terrorism (Prevention and Prohibition) Act, 2022, as well as the CBN’s AML/CFT/CPF Regulations, 2022 and the Guidelines on Targeted Financial Sanctions Related to Terrorism and Terrorism Financing, 2022. The directive also extends to other relevant regional or international sanctions lists that may apply from time to time.
The apex bank emphasised the necessity for financial institutions to have in place a robust and dynamic sanctions compliance framework. Institutions are expected to identify and respond promptly to updates or changes in all applicable sanctions lists.
They must also ensure their systems and platforms are not used for any transactions involving individuals or entities that have been designated under these sanctions. Furthermore, the CBN directed financial institutions to conduct real-time screening of customers, transactions, and beneficial owners to ensure early detection of any red flags. In situations where such detections are made, institutions are required to file appropriate reports with the Nigerian Financial Intelligence Unit (NFIU) and notify the Central Bank when necessary.
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“The effectiveness of sanctions compliance programmes must be regularly reviewed and aligned with legal and regulatory requirements and expectations,” the CBN stated, underlining that periodic assessments of these systems are essential to remain in compliance with current laws and standards.
The Central Bank also issued a stern reminder that non-compliance will attract regulatory sanctions or enforcement actions. “Financial institutions are reminded that failure to comply may result in enforcement action or regulatory sanctions,” the letter read, reinforcing the seriousness with which the CBN views these obligations.
The circular urges all financial institutions to note the content of the letter, take appropriate action, and ensure continued compliance with all applicable laws and directives from the Central Bank.
