CBN tightens watch on banks over terrorism financing
The Central Bank of Nigeria (CBN) has strengthened its supervisory framework to prevent banks and other financial institutions from being used to finance terrorism and facilitate other illicit activities.
The apex bank said terrorism financing supervision has become one of its current priorities as part of ongoing efforts to protect Nigeria’s financial system from abuse by criminal and other illicit actors.
In a statement, the CBN’s Acting Director, Corporate Communications and Investor Relations Department, Hakama Sidi-Ali, said the enhanced supervisory approach would focus on four key areas.
These include how financial institutions identify and manage terrorism financing risks, monitor transactions for indicators of terrorism financing, implement targeted financial sanctions and report suspicious transactions linked to terrorism financing.
Sidi-Ali said the CBN would adopt a risk-based approach rather than wait for violations to occur before taking action. Under the approach, financial institutions considered more exposed to terrorism financing risks would be subjected to closer supervisory attention.
She said the initiative would also strengthen Nigeria’s domestic and international cooperation in the areas of counter-terrorism financing, counter-proliferation financing, financial integrity and protection of the 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. Further supervisory engagement will be undertaken as appropriate,” she said.
According to her, the CBN would continue to deploy both on-site and off-site supervisory engagements to ensure effective Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing controls across the financial sector.
She added that the measures would be implemented in line with existing legal and regulatory requirements governing financial institutions in the country.
The latest move comes amid increased efforts by Nigerian authorities to disrupt financial networks linked to terrorism and other forms of illicit activity.
In line with the provisions of the Terrorism Prevention and Prohibition Act, 2022, the Nigeria Sanctions Committee recently designated six individuals and three entities as terrorist financiers and placed them on the Nigeria Sanctions List.
The sanctioned individuals are Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim.
Hammajam was listed for alleged involvement in terrorism financing and support for the Islamic State West Africa Province (ISWAP), while Umar Usman was listed for allegedly providing material support to a designated terrorist organisation through repeated financial transactions.
Ibrahim Abubakar was listed for alleged involvement in terrorism financing and membership of ISWAP, while Chiroma was listed for allegedly using Bureau De Change operations and related corporate entities to facilitate the movement of funds linked to terrorist activities.
Muktar Muhammad Adamu was listed for allegedly providing financial support and facilitating transactions linked to the ISWAP Okene financing network, while Yakubu Ogirima Ibrahim was listed for allegedly providing material and financial support to ISWAP’s Kogi cell.
The three sanctioned entities are Nine to Nine BDC Ltd, with RC No. 1462752; Generation Currency BDC Ltd, with RC No. 1555604; and Abbal Bako & Sons Bureau De Change, with BN 2323328.
The entities were listed over alleged involvement in facilitating or channelling funds connected to the ISWAP Okene financing network.
Following the designations, a national circular directed relevant operators to immediately identify and freeze, without prior notice, all funds, assets and other economic resources in their possession belonging to the designated individuals and entities.
The operators were also directed to report the frozen assets and related information to the Secretariat of the Nigeria Sanctions Committee.
The CBN said further supervisory engagements would be undertaken as appropriate as authorities intensify efforts to strengthen the integrity of Nigeria’s financial system and prevent it from being exploited for terrorism financing and other illicit purposes.