CBN Unveils Anti-money Laundering Guidelines for Licencing of Banks, OFIs
The Central Bank of Nigeria (CBN) has released new guidelines for licencing of banks and Other Financial Institutions (OFIs) on the implementation of provisions of the Anti- Money Laundering, Combating the Financing of Terrorism and Countering Proliferation of Weapons of Mass Destruction Financing (AML/CFT/ CPF) regulations.
The banking sector regulator in a circular posted on its website at the weekend, explained that the regulation was aimed at ensuring compliance with AML/CFT/CPF rules by individuals and entities applying for license to operate as banks or other financial institutions.
It explained that the objectives of the guidelines were to ensure that proceeds of crimes were not used to establish financial institutions; making sure that criminals do not own or control financial institutions in the country; identifying and verifying the beneficial owners of financial institutions and ensuring that promoters of financial institutions put in place appropriate and effective measures to mitigate ML/ TF/PF risks.
“The guidelines will assist promoters of financial institutions to comply with AML/CFT/CPF requirements while applying for operational licences. The provisions specified in this Guidelines are minimum requirements and shall be read in conjunction with AML/
CFT/CPF laws and regulations.
“The objectives of this guidelines are to: Guide promoters in complying with AML/CFT/CPF requirements in licence applications for banks and other financial institutions; ensure that proceeds of crimes are not used to establish financial institutions; ensure that criminals do not own or control financial institutions in Nigeria; identify and verify the beneficial owners of financial institutions and ensure that promoters of financial institutions put in place appropriate and effective measures to mitigate ML/TF/PF risks,” it stated.
It further explained that the guidelines cover the minimum AML/CFT/CPF requirements for licence applications for banks and other financial institutions under the regulatory purview of the CBN.
“Promoters of financial institutions are required, in addition to complying with other licencing requirements specified in relevant institution-type guidelines, to submit the following with the application for Approval-inPrinciple: Completed and personally signed Beneficial Owners Declaration Form; Notarised statement of networth for all Beneficial Owners, and completed and personally signed Politically Exposed Persons (PEP) Declaration Form “
It stated that the AML/CFT/ CPF Compliance policy shall at a minimum cover compliance structure including designation and status of compliance officer; employee screening and monitoring; customer identification and verification; customer due diligence measures; ML/TF/PF Risk Assessment; AML/CFT/CPF Training of the board, senior management and other employees; independent assessment of the AML/CFT/ CPF Programme, and suspicious transaction monitoring, reporting and record keeping;
“The conditions for rejection of an application for licence or a party to an application shall include: Failure to demonstrate understanding of the ML/TF/PF risks inherent in the business; inability to address the AML/CFT/CPF licensing requirements satisfactorily, especially during the capital verification exercise; misrepresentation of facts and false declaration; and criminal record of a party to the application indicating conviction or any other offence that constitutes financial crime; opaque ownership structure.”
It further noted that promoters of financial institutions are required to provide the following