Money deposit banks, including their directors and other top functionaries, will henceforth face tougher sanctions by the Central Bank of Nigeria (CBN) under a new anti-money laundering and combating financing of terrorism initiatives.
The new regime of sanctions stipulates huge fines against financial institutions found culpable of any of 48 money laundering infractions.
The new regime was contained in a circular titled: “CBN Anti-Money Laundering and Combating the Financing of Terrorism (administrative sanctions) regulations, 2018” by the Director, Financial Policy & Regulations Department of the CBN, Kevin N. Amugo, to all banks and other financial institutions.
Mr Amugo said the regulations were developed to ensure Nigeria’s compliance with Financial Action Task Force (FATF) recommendation 35.
The law expects countries to ensure there is a range of effective, proportionate and dissuasive sanctions, whether criminal, civil or administrative, available to deal with natural or legal persons.
The regulations said failure to comply with the anti-money laundering and terrorism requirements attract sanctions, which should be applicable not only to financial institutions, but also to their directors and senior management.
The CBN said banks and board members or chief compliance officers would all be sanctioned for 31 out of the 48 money laundering infractions listed in the new regime.
For each of the 31 infractions, the new regime stipulates minimum fines, ranging from N500,000 to N1.2 million on board members, or chief compliance officers or the internal auditor, and fines ranging from N1 million to N20 million on the offending banks.
Infractions and penalties stipulated under the new regime include N1 million on each member of the board and N20 million on the Deposit Money Banks (DMB) that fail to approve the AML/CFT policies and procedures -a minimum penalty.
Details of the other fines include N750,000 on the Executive compliance officer and another N750,000 for each year the contravention continues, for failing to review/update the AML/CFT policies and procedures at least every three (3) years.
About N500,000 was imposed on the Chief compliance officer in the first instance and N500,000 for each year the contravention continues, while the bank would pay N5 million in the first instance and N1 million for each year the contravention continues.
Failure to communicate the AML/CFT programme of the organization to the employees would attract a minimum penalty of N750,000 on the Executive compliance officer, N500,000 on the Chief compliance officer and N10 million on the bank.
For the board or its committee to fail to supervise and ensure the effective implementation of the anti-money laundering/financial terrorism programme, each member of the board of the bank would pay a minimum penalty of N500,000 each against N10 million by the bank.
The fine for failure of the officer to generate periodic reports on AML/CFT issues to the board or its relevant committee, the circular said, was a minimum penalty of N750,000 on the Executive compliance officer, N500,000 on the Chief compliance officer and N5 million on the bank.
Also, penalties are imposed for failure to classify money laundering and terrorism finance risks in the bank, or failure to put in place guidelines for risk assessment and profiling of customers in institutions, board approved programme and failure to carryout risk assessment and profiling of each account.
The penalties include a minimum of N1 million on the Chief compliance officer of the bank, a minimum penalty of N3 million on the bank for failure to put in place guidelines for risk assessment and profiling of customers in money laundering and terrorism programme.
A minimum of N100,000 per account for failure to carryout risk assessment and profiling of account.
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