The Central Bank of Nigeria, CBN, has introduced a stronger supervisory framework aimed at preventing Nigerian banks and other financial institutions from being used to finance terrorism and facilitate other illicit financial activities.
The apex bank said terrorism financing supervision is now one of its key priorities as part of efforts to protect the country’s financial system from abuse by criminal and other illicit actors.
In a statement, the CBN’s Acting Director, Corporate Communications/Investor Relations Department, Hakama Sidi-Ali, said the new supervisory focus would strengthen the ability of financial institutions to identify, prevent and report activities associated with terrorism financing.
According to Sidi-Ali, the framework will focus on four major areas: how financial institutions assess and manage terrorism financing risks, how they monitor transactions for possible links to terrorism financing, how they implement targeted financial sanctions, and how they report suspicious transactions.
She explained that the CBN would adopt a risk-based approach rather than waiting for financial abuses to occur before taking action.
Under the approach, banks and other financial institutions considered to have greater exposure to terrorism financing risks would receive closer supervisory attention and more intensive monitoring.
Sidi-Ali said the initiative would also support Nigeria’s domestic and international efforts to combat terrorism financing, counter proliferation financing and strengthen the integrity of the country’s financial system.
“This supervisory focus also supports Nigeria’s ongoing domestic and international cooperation on counter-terrorism financing, counter-proliferation financing, financial integrity, and the protection of the financial system,” she said.
She added that the CBN would continue to use both on-site and off-site supervisory engagements to assess the effectiveness of Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing, AML/CFT/CPF, controls across the financial sector.
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The apex bank said its supervisory activities would be carried out in line with existing laws and regulatory requirements, with further engagements to be undertaken where necessary.
The announcement comes amid increased efforts by Nigerian authorities to disrupt financial networks linked to terrorist organizations.
Under the Terrorism Prevention and Prohibition Act, TPPA, 2022, the Nigeria Sanctions Committee recently designated six individuals and three entities as terrorist financiers and added them to the Nigeria Sanctions List.
The designated individuals include Babangida Muhammed Adamu Hammajam, who was listed for alleged involvement in terrorism financing and support for the Islamic State West Africa Province, ISWAP.
Others are Abdullahi Umar Usman, accused of providing material support to a designated terrorist organization through repeated financial transactions; and Ibrahim Abubakar, who was listed for alleged involvement in terrorism financing and membership of ISWAP.
Also designated were Adamu Chiroma, who was listed for allegedly using Bureau De Change, BDC, operations and related corporate entities to facilitate the movement of funds linked to terrorist activities; Muktar Muhammad Adamu, who was listed for allegedly providing financial support and facilitating transactions linked to the ISWAP Okene cell; and Yakubu Ogirima Ibrahim, who was listed for allegedly providing material and financial support to the ISWAP Kogi cell.
The three entities placed on the sanctions list were Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau De Change.
According to the sanction’s designation, the entities were linked to the alleged movement and channeling of funds connected to the ISWAP Okene financing network.
Following the designations, a national circular directed financial institutions and other relevant operators to immediately identify and freeze, without prior notice, funds, assets and other economic resources belonging to the designated individuals and entities in their possession.
The operators were also directed to report the frozen assets and related information to the Secretariat of the Nigeria Sanctions Committee.
The CBN’s latest supervisory measures are therefore expected to place greater responsibility on banks and financial institutions to strengthen their internal controls, monitor transactions more closely and promptly report suspicious financial activities.
The move forms part of broader efforts to prevent Nigeria’s financial system from being exploited to support terrorism and other forms of illicit financing.
The Nation
