Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) in Nigeria have been cautioned by the Central Bank of Nigeria (CBN) to exercise caution when conducting transactions with businesses and individuals in specific countries. The countries mentioned by the CBN are the Russian Federation, the Democratic People’s Republic of Korea, Iran, and Cameroon.
The CBN’s cautionary message is a response to the Financial Action Task Force (FATF) placing these countries on the high-risk jurisdictions list. The FATF is an international body focused on combating money laundering and terrorist financing.
Mr. Chibuzo Efobi, director of financial policy and regulation at the CBN, issued a circular with reference number FPR/AML/PUB/BOF/001/029 to communicate the CBN’s warning.
Global standards aimed at preventing illegal financial activities and the associated societal harm are established by the FATF. Besides the mentioned countries, other countries on the list include the Democratic People’s Republic of Korea, Croatia, Vietnam, and Myanmar.
The CBN’s decision to issue this warning is based on resolutions reached at a recent plenary session of the FATF, which was held last month.
As stated in the circular, “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’.”
The circular further emphasizes 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 instructs financial institutions to implement enhanced due diligence measures and, in severe cases, consider implementing countermeasures to protect the international financial system.
The circular also reminds financial institutions that the suspension of the Russian Federation from the FATF remains in effect.
Financial institutions are urged to stay vigilant and alert to potential emerging risks resulting from attempts to bypass measures designed to safeguard the international financial system.
Given these new developments, financial institutions are instructed to take note of all additions to jurisdictions under ‘Increased Monitoring’ and high-risk jurisdictions subject to a ‘Call-for-Action’ and take necessary steps to effectively mitigate these risks.