The Central Bank of Nigeria (CBN) has warned Nigerian Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) to be cautious when conducting transactions with businesses and individuals in certain countries. The Russian Federation, the Democratic People’s Republic of Korea, Iran, and Cameroon are the countries named by the CBN.
The CBN’s warning comes in response to the Financial Action Task Force’s (FATF) designation of these countries as high-risk jurisdictions. The FATF is an international body responsible for combating money laundering and terrorist financing.
Mr Chibuzo Efobi, CBN director of financial policy and regulation, issued a circular with the reference number FPR/AML/PUB/BOF/001/029 to communicate the CBN’s warning.
The FATF establishes global standards to prevent illegal financial activities and the societal harm that they cause. Other countries on the list include the Democratic People’s Republic of Korea, Croatia, Vietnam, and Myanmar, in addition to the aforementioned.
The CBN’s decision to issue this warning is based on resolutions reached at the FATF’s recent plenary session last month.
The circular states;
Banks and other Financial Institutions should take note of the outcomes of the Financial Action Task Force Plenary conducted from June 21-23, 3023, and the subsequent addition of Cameroon, Croatia, and Vietnam to the list of jurisdictions under ‘Increased Monitoring.”
It further emphasised that the Democratic People’s Republic of Korea, Iran, and Myanmar remain on the high-risk jurisdictions list and are subject to a ‘Call for Action.’
In light of these developments, the CBN directs financial institutions to implement enhanced due diligence measures and, in extreme cases, to consider countermeasures to protect the international financial system.
The circular also reminds financial institutions that Russia’s suspension from the FATF remains in effect.
Financial institutions are urged to remain vigilant and aware of potential emerging risks as a result of attempts to circumvent measures designed to protect the international financial system.
Given these new developments, financial institutions are instructed to take note of any additions to jurisdictions under ‘Increased Monitoring’ and high-risk jurisdictions subject to a ‘Call-for-Action’ and to take the necessary steps to effectively mitigate these risks.
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