Extraordinary nr Federal Republic of N me Official Gazette geria . No. 68 Lagos - 3rd September, 2013 Vol. 100 Government Notice No. 161 “The following is published as Supplement to this Gamerte Sie, Sheri Tile Page 16 Central Bank of Nigeria (Anti-money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013, == B227-B307 ‘and Published by FGP 98/920136.200 (OL. 71) Annual Subser | January, 2013 ie Local : 825,500.09 Overseas : H37,500.00 [Surface Mail]$46,500 00 [Sezend Clas Aix Maill Present issue 42.50.00 per copy. Subserlbers whe wish obtain Giccte after ist wary should apply tothe Federal Government Printsr, afi Lagos for amended SubscriptionsB27 CENTRALBANK OF NIGERIA (ANTI-MONEY LAUNDERINGAND COMBATING THE FINANCING OF TERRORISM IN BANKSAND OTHER FINANCIADINSTITUTIONS IN NIGERIA) REGULATIONS, 2013 Amnancrstasr oF Risctt.amons Regulation Pruy IOnwenes, Score AND ARPLICATONS 1. Objective 2. Seope 3. Application Parr IAntieMeney Launperine ap Compstinc tiie FINANGNG oF Tranouisht Dar crivrs 4, AMLICFT Institutional Policy Framework 5. Risk Assessment 6. Risk Mitigation 7. Designation and Duties of AML/CFT Compliance Officer & Co-operation with Competent Authorities. Paki I1I—Orrenens, Measuis avo Saverions 9. Scope of Offences 10, Tetvorism Financing Offences 11. Targeted Financial Sanctions Related to Terrorism Financing and Proliferation 12. Limitation of Secrecy and Confidentiality Laws Parr IV—Cuistontie Due Distance, Hianet Riss CUSTOMERS ‘ano ACHIVITES OF PoutTicaLty Exvosen Prisoxs 13, Customer Due Diligence (*CDD") Measures 14. Identification and Verification of Customers 15. Verification of Benefictal Ownership 16 Application of Enhanced Due Diligence to Higher Risk Customers sand Activities 17, Attention to High Risk CountriesBIR 18, 19, 20. 2 22, 23. 24 28 26, 20. 28, 29. 30. 31 22 4s 46 Politically Exposed Person (PEP) ro New Technologies and Non face-to-face Transactions: Money or Value Transfer (MVT) Services jordér and Correspondent Banking Foreign Branches and Subsidiories Wire Transfers ‘Simplified Due Diligence Applicable to Lower Risk Customers, Transactions or Products Timing of Verification Existing Customers Failure te Complete COD Reliance on intermediacies and Third Parties on CDD Fut Pare V—Marsrenaner or Reconps Maintenance of Records on Transactions Attention on Complex and Unusual Large Transactions Suspicious Transeetion Monitoring Procedure for the Monitoring anid Reporting of Suspicious Trarsect Part VI Monrroneve, Ivreanas, Cowmnois, Prosiainions, AND SANCTIONS Iniernal Controls, Compliance and Audit Sanctions and Penalties for Non-Compliance Prohibition of Numbered or Anonymous Accounts. Accounts in Fictitious Namesand Shell Banks Other Forms of Reporting AMLICFT Employee-Education and Trai Monitoring of Employee Conduct Protection of Staff wine Report Violations Additional Areas of AML/CET Risks Additional Procedures and Mitigants. Testing for the Adequacy of the AMLICFT Compliance Formal Board Approval of the AMLICET Compliance (Culture of Compliance Parr VII—GLinance ow Know Your Custouer (KC) ‘Three Tiered KYE Requiréments. Duty to Obtain Identification Evidence71 B 229 Nature and Level ofthe Business Application of Commercial Judgment Identification Factors to Consider in Identification Time for Verification of identity Verification of Wdeniity Exceptions ‘Additional Verification Requirements Ieeatification of Dirwotors and other Si Joint Account Holders Verification of Identity for High Risk Business Duty to Keep Watch of Significant Changes in Nature of Business Verification of Identity of Person Providing Punds for Trust ws Schemes and Investments in Third Parties’ Names Personal Pension Seheies Timing of Identification Requirements Consequence of Failure o Provide Satisfactory Identification Evidence Identification Procecures ‘Now Business for Existing Customers Ceatiication of Ldenifcation Documents Recording identification Evidence Concession in Respect of Payment Made hy Post “Tenmn Deposit Account ("TDA’) Investment Funds Paar VII—Groreat hsoetnton Establishing Identity Private individuals — General Information Prive Individuols Resident in Nigeria Documenting Evidence of Identity Physical Checks on Private Individuals Resident in Nigetia Electronic Checks Pager IXFisavcint Excision FoR TH SoeiAH} Of Finanenuin’ Dsabvanracinn APrticants “Finamedal Exclusion” for the Socially or Financially Disadvantaged Applicants Resident in NigeriaB 230 TB. 79. 80. al. 82 Ree 56. 7 88. 89. 90, ou 92, 93, 94, 95, Private Individuals not Resident in Nigeria Non face: to-face Identification Refugees or Avylum Seekers Students and Minors (Quasi Corporate Customers Past X—Thst, Pouiey, Recraey xb PayMenr oF Pins ‘Trust, Nominees and Fidueiaries Offshore Trusts ‘Conventionai Family and Absolute Nigetian Trusts Receipt und Payment of Funds Identification of new Trustees Life Policies Placed in Trust Powers of Attorney and Third Party Mandates Paer 2X1—Exsexrroestur, Clint Accounts, U2 AN} CORPORATE ORGANIZATIONS sneonnonrin Exocutorship Accounts *Clivay Accounts” Opened By Professional Intermediaries, Un-incorporated Business or Partnership Limited Lisbility Partnership Pure Corporate Customers The Identity of a Comporate Company Non fave-to-fuce Business Public Registered Companies Privaie Companies Higher Risk Business Apaticant Higher Risk Business Relating to Private Companies Foreign Financial Institutions Bureau DeChange Desighated Non-Financial Businesses and Professions (DNFBPs) Occupational Pension Schemes Registered Charity Organizations Religious Organizations (ROs) Taree - ‘Tiers of Government and Parsstatals Foreign Corsulateslo9. ho. ut 2 uns. na. us, 16. 17. 18 9. 120. Wake 122, 123, B231 Intermediaries ar other Third Parties to Verify Identity or to Introduce Business Pre X1I—Inmonucrows, ArrLicastons ant Forman Inte eonanics Iniroductions from Authorized Financial Intermediaries Written Applications ‘on- Written Application Foreign Intexmediasies Corporate Group Introduetions Business Conducted by Agents Syndicated Lending Correspondent Relationship Acquisition of One Financial Institution and Business by Another Vulnerability of Receiving Bankers and Agents Categories of Persons to be Identified Applications Received through Brokers Applications Receive from Foteign Brokers Multiple Farsily Applications Pag XUI—LINKED TRANSACTIONS, FORGION ACCOLNES AND Iyvesrent Linked Transactions Foreign Domiciliary Account (FDA) Safe Custody and Safety Deposit Boxes Customer's Identity Not Property Obusined Exemption from Identification Procedures Ouc-eff Cash Transaction, Remittances and Wire Transfers Re-investment of Income Amendment or Revocation of these Regulations. Intexpretatic Ciation SCHEDULESot od. . ee et I A st . wi ‘tot sen et tm Tm eet ented i H | | « 8 ” - | aSe. No, 16 of 2013 CENTRALBANK OF NIGERIA (ANTI MONEY LAUNDERINGAND COMBATING THE FINANCING OF TERRORISM IN BANKS AND OTHER, FINANCIAL INSTITUTIONS INNIGERIA) REGULATIONS, 2013, In exercise wf the powrers conferred upon me hy the provisions of section S1(1) of the Banks and Other Financial Institutions Act, 2004 and all other powers enabling me im that behalf, I, Sanuse Lasnoo Sans, Governor of the Central Baak of Nigeria, make Regulations— [29th Angust, 2013 ] Pans I—Onsicnives, Score AND APHICATONS 1. The objectives of these Regulations are to— (a) provide Anti-Money Laundering and Combating the Financing of ‘Tesrorism (“AMLiCFT") compliance guidelines for financial institutions under the reguletory purview of the Cemiral Bank of Nigeria (*CBN")as required by relevant ptovisions of the Money Laundering (Prohibition) Act, 2011 (as amended), the Terrorism Prevention Act, 2011 (@samended) and other relevant Inws and Regulations ; (0) enable the CBN 10 diligently enforce AMLICFT measures and ensure effective compliance by financial institutions ; and (e) provide guidance on Know Your Customer (°K YC”) measures to assist financial institutions in the implementation of these Regulations. 2.—(1) These Regulations cover the relevant provisions of the Money Laundering (Prohibition) Act, 201 1 (as amended). the Terrorism Prevention Act, 2011 (as amended) and sny other relevant laws or Regulations. (2) These Regulations cover — (0) the key areas of Anti-Money Laundering and Combating the Financing of Terrorism (AMLICET} Policy ; (8) development of Compliance Unit and function ; (c) Compliance Officer designation and daties : (d) the requirement to co-operate with the competent or supervisory authorities : (6) conduct of Customer Due Diligence ; (/)morivoring ane filing of suspicTous iransections o the Nigerian Financial Intelligence Unit (*NFIU) and other reporting requirements; (g) reposting tequitements ; (A) record keeping : and (J AMLICET employes training, 3. These Regulations shall apply’to banks and other financial institutions in Nigeria within the regulatory purview of the Central 3ank of Nigeria, B 233 Cominenie: ment Objective Scope ApplicationB34 Pau LIAN Mowe Laintnine anns Cott NG rn: FINANCING fF THRRORISH Dawucretsy ANLICET 4-{1) A financial institution shall adopt policies stating its commitment io fisitutions! —egmply with Anti-Money Leundering (‘AML") and Combating Financing of Policy Harroriem (CPT? obligations under subsisting laws, ;egulations and regulatory Framemeshs — gipeerives and to-actively prevent any transection that otherw se faelitates eriminal activities, money laundering or terrorism. (2) A Financial institution shall formulate and implement inie-nal controls and other procedures to deter criminals from using its facilities for money laundering and terrorist financing. {G) Financial Institutions shall adopt arish-besed approweh in the idéntifisetion and maragement of theit AMLICF risks in line with the requirements of these Regulations (4) Financial Institusions shall comply’ prompzly with requests made pursuant tocurrent AML/CFT legislations and provide information to the Central Bank of Nigeria (*CBN"), Nigeria Financial Intelligence Unit (°NFIU") and other competent authorities. 45) Financial Institutions shall not in any way inhibit the implementation of the provisions oF these Regelations and shall co-operate with the regulators andl law enforcement agencies in the implementation of a robust AMLICFT regime in Nigeria (6) Financial institutions shall render statutory reports to appropriate avihocities as cequired by law and shall guard against any act that will cause & customer or elient ta avoid compliance with AMLICFT Legisiations. (9) Financial istiuations shall identify, review and reeotd other areas of potential money laundering and tertorist Financing risks not covered by these Regulations and report same lo the appropriate authorities. (8) Financial institutions shall refleet AMLICFT policies and procedures in their strategie policies. (0) Financial insttotions shall conduct on-going Due Diligence and where aprtopriate, enhanced Due Diligence onall busines relationships and shall abtzin jnfommation on the purpose and intended nature of the business relationship of their potential customers (10) Financial institutions shall ensure that their employees, agents and ‘cxhers doing business with them, clearly understand the AMLICFT programme, Risk 5, A financial institution shall— Seen {a} take appropriate steps to identify, assess and undersiand ts Money Laundering (ML!) and the Finaneing of Tersorism ('FT") risks for customess, countries or geographic arees of fis operations, products, services and delivery channels(6) document its risk assessments profile ; [c) considerall relevant risk factors before determining the overall level of risk and the appropriate Level and type of mitigation to be applied; (c) keep the assessments in this regulaticin up to date sand (c) have the appropriate mechanisms to provide cisk asseiaments reports to regulatory, supervisary and competent authorities, and Self-Regulatory Organizations (*SROs') 6, A financial institution shall — (a) have policies, controls and procedures whieh ane approved hy its beard ‘of directors to enable it manaye und mitigate the risks that have been identisied (sither by the eourtry or by the Finaneial institution) (4) monitor the imptemeatation of the controls inthis regulation and enhance thom, whore necessary ; and (0) take enhanced measures co man risks ure identified ane! mitigate the risks where higher 7-11) A financial institution shall designate its A ML/CFT Chief Compliance Officer with the relevant competence, authority and independence to implement the institution's AML/CFT compliance programme. (2) The AMLICET Complistice Officer shall be appointed at management {evel and shall report directly to the Board on all matters under these Regulations. (3) The duties of the AMLICFT Compliance Oiieer referred to. in sub- regulation (1) of this regulation shall inelude— a) developing an AML/CFT Compliance Pr (1) receiving and vetting suspicious transition reports Hom staf; (e) filing Suspicious Transtetion Reports (ST RS") with the NFIU (a) filingother regulacory retumns with the CBN and other relevant regulatory and supervisory authorities ; il” reports tothe CBN ancl NFIU, where ne (rendering * compliance : (f ensuring that the financial institution's compliance programme is implemented; (g) co-ordinating the tsining of stat in AMLICFT awareness, detection methods and ceporting requisements : and (0) serving both as a liaison officer between his institution. the CBN and NFIU and a pointof-contact forall employees cn issues relating to money laundering und terrorist financing. ary toensure B235 Designation and Dutics of aML! cer Conn onzeB 236 co- operation wath Compatent Avice. Scape or Offences 1) financial institution shall give an undertaking thet itshall comply prompily with all the recuests made pursuant to the provisions of relevant AML! CET laws and Regulations and provide al! requested information to the CBN, NFIU and other competert authorities. (2) A finencial institution's procedures for responding to authorized requests for information on ML and FT shall meet the following — (1 searching immediately the financial institution's records to determine whether it maintains or has maintained any account for, or has engaged ix any travsection with any individual, enfty or organization named in the request (b) reporting promptly to the requesting authority the outcome of the seareh ; and c) protecting the security and confidentiality of such requests Paar I]—Oevences, Measuies AND SANCTIONS 9.—(1) A financial instiuuion shall identify and file suspicious transection reports 10 the NFIU, where funds, assets or property are suspected (0 have teen derived from any of the following criminal activities— (o) participation in an organized eximinal group and racketeering (6) terrorism, ineluding tertorist financing + (6) trafficking in persons and migrant smuggtings : (a) sexual exploitation, including soxval exploitation of children: (@ illicic wafficking in narcotic dnigs and paychouopic substances + wil (g) illicit trafficking in stolen and other goods; it arms trafficking + (@) corruption (bribery ; () fied ¢ (&) currency counterfeitin (O counterfeiting and piracy of peoduets ; (m=) environmental erime + (rn) murder § {o) gtievous bodily injury 5 (p) kidnapping, illegal restrsintand hostage-taking + {g) robbery or theft ; () smuggling, including smuggling done in relation to customs and excise fies and taxes) : 3) tax crimes, related to direct taxes and indirect taxes ¢(0 extortion 5 (a) (©) piraeyss ((w) Insider ding and market mianiputation, oF (x) any other predivate offence under the Money Laundering (Prohibition) ‘Act, 2011 (as amended) and the Tertorism Prevention Aci 2011 (asamended), 10.41) Terrorism financing offences extend to any person or entity who solicits, acquires, provides. collects, receives, possesses or makes available funds, property or other services by any means «© (errorisis or verrorist orwanizations, direetly oc indiveetly with the intention orknow ledge orhaving.uasonable grounds to believe that such funds or property shall be used in full ar ie past to carry out a terrorist act by a terrorist or terrorist organization in line with section | af the ‘Tervorisin (Prevention) Act, 2011 (as amended), (2) Under these Regulations, cevorism finansing offences are prodivste offences for money’ laundering and shall apply regardless of whether the person cor entity alleged to have commiuted the offences in the same country aradifierer coumtry from the one in which the terrorist oF terrorist oryanization is located of the terrorist act oecurred or will occur. 1111) A Financial instinution shall report co the NEIL any assets frozen or actions taken in compliance with the prohibition requirements of the relevant United Nations Security Council Resolutions C(UNSCRs’) on tirorism, financing of proliferation of weapons af mass destruction, any Future successor resolutions and the Terrorism Prevention (Freezing of iniemational Terrorist Funds and Other Related Issues) Regulation, 2613, and any amendhnents that may be reflected by the competent authorities, (2) The reports in sub-regulation (|) of this regulation shall inelude all transactions involving attempted and concluded! transactions in camptiance with the Money Leundesing (Prohibition) Act, 201 (asamended), Terrorism (Prohibition) ‘Act, 201 (as amended) and the Terrorism Prevention (Freezing of International Terrorist Funds and Other Related Issues) Regulation, 2013, and any amendments that may be reflected by the competent autiorities (3) The administrative sanctions contained in Schedule Ito these Regulations co in the ‘Tetrorism Prevention (Freezing of International Terrorist Funls and Other Relaied Measures) Regulations, 2013 shall be imposed by the CBN on institutions under its regulatory purview. 121) Financial institutions’ secrecy and confidentiality laws shall not in any way, be used to inhibi the implementation of the requirements of these Regulations hiaving regard to the provisions of section 38 of Economic and Financial Crimes Commission Act, 2004; seetion 13 of Money Laundering (Prohibition) ‘Act, 2011 (as Amended) and section 33 of the CBN Act, 2007, B237 evox Fencing Offences, teeted Financial Sanetions Terrorism Fhnascing and Prolif CenfdeiiyB 238 Customer Due Diligeree (coo) (2) The relevant lavis cited in sub-regulation (1) of this regulation have tiven the relevant authorities the powers required to access information to properly perform their functions in combasing money laundering and financing of terrism, the sharing of information bewveen corapetent authorities ether damestically or intematicnaily, and the sharing of information between financial institutions rresessary or 8s may be required, (2) Banking seerecy or preservation of eustomer confidentiality shall noc be invoked a8 a ground for objecting to the measures set out in these Regulations or for refusing to be 2 witness to facts likely to constitute an offence under these ‘Regulations, the relevant provisions of the Money Laundering (Prohibition) Act 2011 (es amended), the Terrorism Prevention Act, 2011 (zs amended) ancl any ‘other relevant subsisting laws or Regulations, Pagr 1V—Cusiovier Dur DitiaeNce, Hionnie Risk Cusrosuns anb AcTiviris oF Pot!TicaLty Exrostin PPRSoNs 13.—{1) A financial institution shall undertake Customer Due Diligence (CCDD") measures whien— (0) business relationships are established : (@)carrying out eceasional transuctions above the applicable and designated threshold of US81,000 or its equivalent in other currencies or as may be determined by the CBN from time to time, including where the transaction is carried out in single operetion oF several operations thot appear to be linked : (c) earying out occasional transactions that arc wire transfers, including those applicable 19 cross-border and domestic transfers between financial institutions and when credit or debit cards are used 2s a payment system to effect money transfer ; (u) there isa suspicion of money laundering or terrorist financing, reverdless of any exemptions or any other thresholds referred to in these Regulations : or {@) there are doubts on the veracity or adequacy of previously obtained customer identification data, (2) The measures in parageaphs (a), (6) and (¢) of sub-regulation (1) ofthis regulation, shall not apply to payments in respect of — (0 any transfer flowing fiom a transection carried out using a ereeit or debit card so long as the eredit or debit card mmber accompanying such transfers Flow front the transactions such as withdrawals (rom a bank acount through en ATM machine, cash advances from a credit cerd or payment for goods. (i Inter-firancial institution transfers and setiternents where doth the originator-person and the beneficial-person are financial institutions acting en their own beball.(3) Financial institutions, must not after obtaining all the necessary documents and being so satisfied, repeatedly perform identification and verification exercise every time a customer condvets a transaction except there is @ suspicion ‘that the previously obtained information is not complete or hss changed. 14—{1) A Financial institution shall identify their customers, whether Permanent or occasional, natural er legal persons, or legal arrengements, and. verify the customers’ identities using reliable, independently sourced documents, data or information, (2)A financial institution shall carry out the full ange ofthe CDD measures contained in these Regulations, the relevant provisions of the Money Laundering, (Prohibition) Act, 2011 (as amended), ane any other relevant laws or Regulations, (3) Financial institutions shall apply the COD measures on a risk-sensitive basis, (4) Types of customer information o be obtained and identification data to ‘be used to verify the information are contained in Sehedule Il tathese Regulations, (5) Where the customers a legal person or a legel arrangement, the nancial institution shall — (a) identity any person purporting o have been authorized to act on behalf (of that customer by obtaining evidence of the cuscomer"s identity and verifying the identity ofthe authorized pesson ; and (2) identify ond verify the legal stays of the legal person or legal ment by obtaining proof of ineorporstion from the Corporate AfTairs atra Commission ('CAC’) ot similar evidence of establishment or existence and any other relevant information, 18—{1) A financial institution shall identify and take reasonable steps 1o verify the identity of a beneficial-owner, using relevant information or data obtained from a reliable source to satisfy ise that it knows who the beneficial. owner is through methods including — (2) for legal persons (0) identifying and verifying the natural persons, whete thay exist, that have ultimete controlling ownership imerestia legal person, takinginto cognizance the fact tha: ownership interests can be so diversified that there may be no natural persons (whether acting alone or with others) exercising, control of the legal person or arrangement through ownership ; (to the extent that i is manifestly clear under sub-peragraph (/) ofthis paragraph tht the persons with the controlling ownership interstarethe beneficial owners oF where no natural person exerts control through ownership interests, ‘demtify and verify the naturel persons, wihere they enisi, exercising control of the legal person or arrangement through other means ; and B239 demifica- tion ard verification of identity or Customers. Verification ‘of Benefia! ‘Ownershia,B 240 (where a rata person is ot identified under sub-paragraph (er) of this paragraph, Financial institutions shall identify and take ressonable measures 10 verify the Identity ofthe relevant natural person who holds senior rranagement position in the legal person. (@) for legal arangernenis—such as trust arrangement, financial institutions shalt identify and verify the identity of the settler, the trustee. the protector there they exist, the beneficiaries or class of beneficiaries, and any oxher natural person exercising ultimate or effective control ever the tus! including throngh a chain of control or ownership 5 and (c) for other types of legal arrangements, the finencial institutions shall identity and verily persons Th equivalent or similar positions. (2) Finaneial institutions shall in wspect ofall customers, determine whethes ‘a customer is geting on behalf of another person or not and where the eustemer is noting on behalf of another person, take reasonable steps to obtain sufficient ‘dentification-data and verify the identity of the other person (3) A financial institution shall take reasonable measures in respect of ceustomers that are legal petsons or legal arrengements to— (0) understand the ownership andl control structure of such a customer ; and (b) determine the natural persons that ultimately own or contro! the ceustomer. (4) Inthe exertise of its responsibility under this regulation, 2 financial in&itution shall take into account that aatural persons include those persons who exercise ultimete or effective coniral over the legal person or arrangement ‘and factors to be taken into consideration (a satisfectorily perform this funetion include— (a) for companies - the natural persons shall owa the controlling interests ‘and comprise the tind and management of the company ; end (6) for trusis— the natural persons shall be the setilo, the trustee oF person exercising effective control over the trust and the beneficiaries (5) Where a customer or an owner of the controlling interest isa company sisted on a stock exchange and subject 1 disclosure requiements (sither by stock xchange ules oF by law or other enforceable means) which impose requirements to ensure edequate tranapureney of beneficial ownership, oF s a majority-owned subsidiary of such # company, itis not necessary 1 idenlly ard verify the identity of any shareholder o* beneficial owner of the company (6) The relevant identification data referted to inthe foregoing regulation ray be abtained from a public register, the customer and otter reliable sources, nd for this purpese, ownership of 596 interest or more in « company isapplicable(7) A ‘Thai institution stall obtain infomation on the purpose and intended nature of the business relatioaship of its potential customers, (S14 financial institution shall conduct on-going Que Diligence on a business relationship, (9) The conduct of on-going Due Diligence includes scrutinizing the Wansactions undertaken by the customer throughout the course of the financisl institution und customer selationship to easure thal the Irensactions being Conducted are consistent with the financial institution's knowledge-af the customer hfs business, risk profiles and the source of funds. (10) 4 Firanicia! institucion shall ensure that documents, data o# information collated under the DD process are kept up-uy-date and relevant by underiakin, ‘exular periodie reviews of existing records, particulunly the records in tespect of higher-risk business-retationships or customer celeuories. 16. A financial institution ¢hall perform Enbanced Due Ditigence far high: visk customers. pusiness relationship or transactions includ (a) non-resident custom () privare banking customers (©) legal petsons or legal arrangements such ss trusts that are personal: assets-holding vehicles (companies that ave nominee-shareholeers or shares in bearer form (@) Politically Exposed Persons (*PEPs"), cross-border baciking endl business relationsitips, amongst ethers (6 cross-border banking ond business relationships, and (2) any other businesses, activities or professionals as may be prescribed by regulstory. supervisory or competent authorities, 1741) A financial institution shall give special attention to business’ rehitionships aud transactions with persons, including legal persons ‘und other nancial institutions, from countries which do not of insufficiently apply the FATF recommendations, (2) A financial institution shall report transactions that heve no apparent eoonomic or visible tawfil purpose to competent authorities with the backwround «and purpose of such tansuetions as fer as possible, examined and weiuten findings made available w assist competent authorities. (5) fltanciat institution that does 2 business with foreign institutions whieh do not apply the provisions of FATE recommendations shal take measures, including the following (a) steingent requirements for identifying clients and enhancement of advisories, including jurisdiction-specific financial advisories to financial institutions for identification of the beneficial owners before business relationships are established with individuals or companies trom that jurisdiction : B241 Application fo Enkancod ue Diligencesn, Higher Risk Costomers an Activity Abestion ta Nighi CountiesB 242 Politically Expand Persons (Per (b) enhance relevant reportiig mechanisms or systematic reporting of financial transactions on the basis that financial transactions wilh such counties fare mote likely to be suspicion (©) in considering requests for approving the establishment of subsidiaries ‘or branches or representative offices of Financial institaticns. i countries appiving the counter measure shall take into account the fact that the relevant Financial inscitution is from a country that does not have adequate AMLICFT systeins ; and (i) warn that non-financial seotor businesses that transact with natural or legal persons within that country might run the risk of money launderi limiting business relationships or financiet ansactions with the identifi ‘couniry oF persons i that country. 1841) Politically Exposed Persons (PEPS') are individuals who are or have been entrusted with prominent public functions in Nigeria or in Foreign counties, and people or entities associated with them ane! inelude (a) Heads of State or Government : (b) State Governors (c) Local Goverment Chairmen s {ch senior politicians, (@) senior goverment officials () judicial or military officials (g) senior execu ‘of siate owned corporations 5 (#) important political party officials i) family members or close associates of PERS + and (i) members of royal famil (2) PEPs also include persons who are or have been entrusted with prominent function by an international organization, including members ef senioe management including diteetors, deputy direstors and members of the board or ‘equivalent functions other than middle ranking or more junier individuals, {3) Financial institutions shall in addition to performing CD measures, to putin place appropriate risk management systems to determine whether potential customer of existing customer or the benelicial-owner is a PEP. (4) Financial insciutions shall obiain senior management approval before they establish business relationships with a PEP and shall render man returns om all transaetions with PEPSto the CBN and NFIL. (5) Where a customer hes been accepred or has on engoing relationship with a Grencial institution and che customer or beneficial-owres is subsequectly Found t6 be or becomes @ PEP. the financial institution shull obeatn senior ‘management approval to continue the business relationship,(0) A financial institution shall take reesonable nieasures to establish the Sores of wealth and the source of funds of customers and beneficial-owners identified as PEPs, (7) A financial institution that isin busivess relationship with a PEP shall ‘oncluct enhanced and on-going monitoring of that relationship snd in the event of any transaction that is abnormal, a firaneial insiution Shall flag the acecunt ‘nd report the transaction immediately co the NPTU as.a suspicious transaction 19—1) Por eross-border and correspondent banking and other similar reletiogships, a financial institution shall, in addition io performing thé normal COD measures, lake the following measures («) gather sufficient information about a respondent institution to understand fully the najue ofits business and deteomine from publicly aveitable information, the reputation of the institution and he quality ofsupervision, including whether oF not it has been subject 19 a money Ieundering. or terrorist financing investigation or regulatory action ; (6) assess the respondent institution's AMLICFT eontrels and ascertain that they are in compliance with FATF stanitards : {c) obtain approval from senior management hefore establishing correspondent relotionships ; ancl (ch document the respective AMLICFT fesponsibilities of the respondent institution, (2) Wherea correspondent relationship involves the maintenance of payable vecoumt, the fascial institution shall be satistied that {a) its customer (the respondent bank or financial institution) has performed the Hotel CDD obligations on its customers that have ginect access 0 the Secounts oF the correspondent Financial institution : and (0) the respondent financial institution is able w provide relevant customer ‘dentification dats upon request to the eorresponclent financial instit 20—4}) A financial institution shall identity and assess the money laundering ‘or terrorist linancing risks that may arise in relation to the development of new products and new business practices (including new delivery mechanisms) and the use of new or developing technologies far both new and pre-existing prockicte (2) Financial institutions are to ensure that any risis assessment to be undertaken is carried out prioeto the launch of theriew products, Eusiness practices or the use of new or developing technologies are to be documented and appropriate measures laken to manage and mitigate such risks, (3) financial institution stall have policies ind peosedures in place to wnddress any specific risk associated with non face-to-face business relationships oF B23 Cross Border ane Corrspen New Teeteylegies and Non freetotice TransetoesB 244 Money or Nalie ranseer (ar) Seles, even Amaches and Subsiciovic. (4) The policies and procedures requieed to be taken shall be epplicd szutomatically when establishing customer relationships anil condicting on-going Due Diligence and measures for managing the risks are to fschude spec effective CID procedures that apply 1 non face-to-face astomers. 21.—(1) All natura snd leyal persons performing Money or Value transfer Service (/MVTS operators all be license by the Banking and Payment Deparment of the CBN and stall besubject to ths provisions ofthese Regulations, the relevant provisions of the Money’ Laundering (Prohibition) Act, 2011 (as amended), he Terrorism Prevention Act, 20L| (asamended) and any other rekevant laws or Regulations. (2) MVTS Operators shall maintain » curreat list of theie agents and render quarterly retums w the CBN andl the NEU (3) In addition to the requirement specified in this reyulation, MVTS ‘Operstors shall gother end maintain sufficient information about theirs correspondent operators or any ather operators of instiiulions they are oF likely to do business with ents and (ay Mv (a) assess their agents’ and correspondent operators’ AML/CFT controls and asceriains that such controls are adequate and effective Operators shall — (4) obtain approval fram the CBN before establishing new correspondent relationships ; and (e) document and maintain u checklist of the respective AMLICET. responsibilities of each of their agents and correspondent operators, 22.{|) A financial institution shall ensure that its foreign branches and subsidiaries observe AMLCFT measures consistent with the provisions of these Regulations and apply the measures to the extent that the ioeul or host countrys laws and Regulations pertait (2) Financial institutions shall ensure that the principle seferted t© in sub- regulation (1) of this regulation is observed by their branches and subsidio countries which do not orinsutfiisntly apply’therequirements of these Regulations (3) Where the minimam AML/CFT requitements contained in these Regulations and those of the hesi country differ, branches end subsidiaries of Nigerian financial institutions in the host counry shall apply the h lard provided in these Regulations and such standards shall be applied to the extent that the host country’s laws, regulations or other measures permit. er st (4) A financial institation shall inform the CBN in writing when theie foreign branches of subsidiaries ane tmable to observe the appropriate AML/CFT measures where they ate prohibited to observe such measures by the hast country's laws, regulations or other measur(5) Finaneial institutions shall subject to the AMLICFT principles contained in these Regulations, spply consistently the CDD measures at their group levels, taking into consideration the wetivity of the customer with the various branches and subsidizries 23.1 Forevery wire tansier of USS 1,000.0¢ more, the ordeting financial institution shall obtain and maintain the following information relating to the originator of the wire transier— (a) the ame oF the oviginaior (6) the originator’s account umber (oF & unique reference number where no account number exists) y and (e) the ariginater’s address (which address may be substituted with a national identity number), (2) For every wire transfer of US§ 1,000 or more, the ordering financial institution shall obtain and verily the identity of the originator in accordance with the CDD requirements contained in these Regulations (3) Por cross-border wire transfers of USS 1,000 oF more, the ordering financial institution shall include the full originator information in sub-regulation (1) of this xegulation in the message or the payment form accompanying the wire rane ee 4) Whete however, several individual cross-border wiee tainsfers of U: 1,000 or moze om a single originator are hundled in a bateh-file for transmission to beneficiaries in another country, the ordering financial institution should only include the originator’s account number ee unique idcmiifier on each indivicual cress-border wire transfer, provided that the batch-file (in which the individual fansfers are batched) contains {ill originator information that is filly waeeable within the recipient coun For every domestic wire transfer, ths ordetiag Finaneiai institution shall («) include the full originator information in the message or the peyment form accompanying the wire ansfer ; or (h) include only the originator the messave or payenent Foam. ‘count number ora uni identifies, within (6) The inclusion of the originator’s aecount number or the originator’ Uwigue identifier alone should he permitted by a Ginancial institution only where the originater’y ful information can be made available to the bene ieiary financial institution and to the sppropriate authorities within thice business day's ofeeeiving she request (9) Each intermediary and ber chain shall ensure that all the originator’s inforration that aecomipunie lronsfer is transmitted with the transfer eficiary financial institution in the payment wire B 245 Wire IronstinsB 246 Simplified Dus Difizenew Anplicable 8 Low isk Customers Trensictiens Produets (8) Where technieal limitations prevent the full originator information accompanying a cross-border wire transter from being transmitted with a related sary time 19 adapt payment systenis}. ¢ record shall be Kepi for ive years by the reeciving intermediary Financial institution OF all the information rezeived from the ordering financial institution domestic wire transter (during the neces ficiaty's finaneial Institution shall adopt effective risk-based procedures for identifying are handling wire transfers that are not accompanied by complete originator’s information. (10) The Jack of complete originator’ information is considered as. fretor in assessing whetlier a wire transfer or related transactions ure suspicious, (11) Financial intitations shall file # Suspicious Transaction Report ant wire {transfers with incomplete originator’s information to the NFU. (12)'The beneficiary’s financial institution shail restrict oF even terminate its business relationship with the finaneial institutions that fil to meet the standards spveified in this regulation (13) Cross-border aud domestic transfers between finan, ‘not applicable 10 the following types of payments— ia institutions are (a) any wansfer that flows from a transaction carried out using a credit or debit card so long as the credit or debit card nurmbar aceompanies all iransters owing from the transaction, such as withdrawals trom a bank account through fan ATM machine, eash advances Gom a credit card or payments for goods ancl services, provided that where eredit or debi eards are used as payment gysiom to effect a money transfer the necessary information should be inelusled in the messave t and (5) transfers and settlements between financial instiuation where both the originator persortand the beneficiary person are finaneial institutions acting en their own behalf, 24.—(1) Where there ate low risks, financial institution shall apply reduced, cor simplified measures, (2) There are low risks in circumstances whe (2) the risk of money laundering or terrorist financing is lower (5) information on the itemtity of th a customer is publicly avatlable = or vistomer imu the benesletel owner of (e) adsquate checks and controls exist elsewhere tn the naticnal systems, (3) In circumstances of low-risk, financial institution shall apply the siuuplified or reduced CDD megsures when identifying snd verifying the identity of their castorners and the heneficisowners.(4) The circumstances whieh the simplified or reduced CBD measures refer to in sub-regulation (3) of this regulation are applicable include cases of (0) Pinan! institutions—provided they are subject to the requirements for the combat of money lsundering: and terrorist financing which are consistent with the provisions of these Reaulations nd are supervised for compliance with them () Public companies (listed en a stock exchange or similar situations) that are subject regulatory disclose requirerticals : («) Insurance policies for pension seheies where there #8 m0 surrender- value clause and the potiey cannot be used as collateral : and (#) a pension, superannuation or similar scheme that provides retire benefits to employees, whore contributions are mude by way of deduc from wages and the scheme rules do not pecmi! the assignment ofa member's interest unider the scheme, (5) Financia) institution shall not apply the simplified CDD measures toa {Ustomer where there is suspicion ef money laundering: or terrorist financing oF specific higherrisk scenariosand in such a eireumstanve, enhaneed Due Diligence is mandatory, (6) Financial institutions shall adopt CDD measures on a risk sensitivee basisand have regard torisk involved in the type of eustomer, procuet, remnsaction 9 the location oF the customer and were there is doubt; thay are gireeted 10 clarify with the CBN 25.11) A financial institution shall obtain and verify the identity of dhe ‘customer, bene ieial-owner and occasional customers before or during the course of establishing @ business relationship or conducting transactions tor them. (2) Finaneial institutions are permitted to complete the verification of the identity of the customer and benclieal owner following the establishment of the business relationship, only where— (o) this can take place sean as reasonably practicuble ; (A) it fy essential not to interrupt the normal business conduct of the customer in cases of non fice-to-fice business, securities transactions aid thers 5 oF (e) the money laundering risks can be effectively managed, (3) Where a customer is penmitted to utilize the business relationship prior to verification, financial institutions shall adopt, risk management procedures relevant to the conditions under whieh this may eeu, (4) The procedures contemplated under sub-regulation (3) of this regulation shall include @ st of measices such as— (2) limitation of the number. types or amount of transactions that may be performed ; and B 247 Tiiniowor ification,B28 [d) the monitoring of large ar complex transactions being carried outautside the expected norms for that type of relationship. Exist 26.—{)) A financial institution shall apply CDD requirements to existing Cistoines —gustomers on the basis of matedalicy and risk, and continue 10 conduct Due Diligence on such existing relationships at appropriate times, (2) The appropriate time to eonduet COD by financial itstitutions is where (a)a transaction of significant value takes place : (h) @ customer documentation standards change substantially : {(c) there is a material change in the way that the aecount is operated ; or (a) the institution becomes aware that it lacks suffieient information about (3) A financiol institution shal property identity the eustomer in accorcar he ctiteria contained in these Reguladions and the customer identification ‘records shall be made available to the AML/CFT compliance officer, uther appropriate stat? and competent authorities, Faitureto 27-41) A financial instivutn thet fits wo comply with dhe CDD measures complete pursuantto these Regulations shall coo, (2) not be permitted to open the account, commence business perform the wansaeiion ; and (A) be required fo render a Suspicious Transaction Report to the NFTU (2) The financial institution that has commenced the business relationship shall terminate the business relationship and tender Suspieious Transaction Reports tothe NEI, (3) Where, a financial institution suspects that transactions relate to money Jaunidoting or terrorist finaneing, during the establishment or course ofthe customer, relationship. or when conducting eceasional iransactions, it shall immeditely— (o) obtain and verity the idersity OF the customer and the beneficial owner, whether permanent or occasional, irrespective of any exemption or any designated threshold that mistht atheraise apply : and ition Report STR") to the NEIL without (4) render « Suspicious ‘Tran delay (4) Whevea financial institution suspects that a transaction relates to moriey laundering or terrorise financing and itbelievas that performing the CD process, shall tip-aif the customer. it shall (w) not pursue the CDD process, and ())file-an STR 1p che NFTU without delay.(5) A Tnane‘al institution shall ensure that ils employees are aware of, and sensitive to tne issues mentioned under this regulation, (6) Whien assessing risk, financial institution shall consider all the relevant isk factors before determining the level of overall risk and the appropriate level of mtigatin to be applied (7) Financial institutions are allowed to differentiate the. ‘extent of measures, depending on the type and level of risk for the various tisk factors ed neg Pumticuersitution they may— () apply the normal CDD for eusicmer acceptance measures: (0) enhanced CDD for on-gcing monitoring ; or (¢) apply any of the procedures as may be considered appropriate in the cireamstan 28.—{1) A financial ins EDD shall— lution that relies upon.a third party to conduct its {c) immediately obtain the necessity information conceining the property ‘hich has been laundered or which constitutes proceeds from instrumentalities {sedin or intended for use in the comission ef money laundering and financing of terorism or other relevant offences ; and () satisfy itself that copies: of identification data and other relevant documentation relating to the CDD requirements shall be made available fom he third party upon request without delay, (2) The Finaneia) institution shal saisfy itself that third party ies regulated and supervised institution and that it has measures in place to comply with ‘equiremenis of COD reliance on intermediaries and other thd parties on CDD a coninined in these Regulations. (G) Financial institutions relying on intermediaries or other thd parties who have no outsoursing, agency, business relationships, accounts or vansaetions with itor thes clients shall perform some of he elements ofthe COD process un the introduced business. (4) The criteria to be met in carzying the elements of the CDD process by ‘he Financial institution referred to in sub-regulation (3) ofthis regulation are to (2) immediately obtain trom the third perty the necessary information cconceming cermin elements of the CDD process ; (A) take adequate steps to satisfy itself that copies of identification data andl ‘other relevant documentation relating to CDD requirements shall be made ‘available from the third party upon request without delay (c) sotisfy themselves that the thitd party is regulated and supervised in ‘tecordance wit Core Principles of AML/CFT and has measurse in place to comply with the CDD requirements set out in these Regulations : and B 249 Rellanczon Interrmediae siesand Third Pardes on cop PunctionB 250 Masewerance of Records “Transactions, Auention ‘on Campion andunaval lage “Transactions, Swxpicions ‘Transaction Monitoring, (40) ensure thatadequate Know Your Cusiomer (*KYC") provisions are apalied othe third party in order to obtain account information for competent authorities (5) Notwithstanding the conditions spesitied in this regulation, the ultimate responsibility for customer identification and verification shall be with the financial institution relying on the third perty Paar V—MAINTINARCE OF RECORDS 29,—(1) A financial institution shall maintain all necessary records of transactions, both domesticand international for at least five years after completion of the eansaction ot such longer period as may be required by the CBN and NIFILI, provided that this requirement shall apply regardless of whether the account or business relationship is on-going or has been terminated, (2) The components of records of transaction to be malntained by fisancial institutions include the— (a) roeords of customer's and beneficiary's names, addresses ot other jdentisying information normally rezorded by the intermediary (0) neture and date of the transaction (c) type and amount of currency involved ; and {i type and identifvring number of any account involved in the transaction. 3) Finoncial institutions shell maintain records of the identification dots, account files and business correspondence for at least five years after the termination of an acount or business relationship or such longer period vs may be rexquired by the CBN and NPTU, (4) A finaneial institution shall ensure that all customer-transaciion records and information are available on a timely basis to the CBN and NFIU. 30.—{1) A financial institution shall pay special attention co all complex. unwately large transactions oF unusval partes of trensecsions that have re visfole economic or lawful purpose, {2)A financial iostication shell investigate suspicious transactions and report iis findings tothe NFIU immediately. in compliance with the provision of section 6(2){¢) of Money Laundering (Prohibition) Act, 2011 (as amended), {3) For the purpose of sub-regulation (1) of this regulation, complex or unusually fare tansaction’ er, ‘unusual pattern of transactions’ incluce significant transactions rélating Lo a relationship, transactions that execed certain. limits, very fagh account tumover inconsistent with the size of the balance or transuetions which fall outside the regular patieen of the account's activity. 31.—{1) Where # transaction— (a) involves a frequency which is unjustifiable or unreasonable + (4) is surrounded by conditions of unusual or unjustified complexity ; (oyappeats to have no economic justification or lew ful objective : or(cf in the opinion of the francial institution involves terrorist financing or is inconsistent with the known transection pattern of the account er business relationship, the transaction shall be deemed to be suspicious and the financial institution shal seek information from the customer as to the origin and destination of the find, the aim of the transaction and the identity of the beneficiary. 2) Where a financial institution suspects that the funds mentioned under sub-regulation (1) of this regulacion— (are decived from legal or illegal sources but are intended to be used for am act of termrism ; (&) are proceeds of a crime related to terrorist financing ; ot (c) belong to a porson, entity or organization considered 4s terrorists, it shall immediately and without delay report the matter to the NFIU and shell ‘not be Tiable for violation of the confidentiality rules and banking secrecy obligations for any lawful action taken in furtherance of this obligation (3) A financial instittion shall immediately and without delay :but not later then within 24 bours— (4) draw up a writen ceport containing ll relevant information on the transaction, together with the identity ofthe peineipal and where applicable, of the beneffciary or beneficiaries : (4) take appropriate action to prevent the hnundering of the proceeds of a crime, an illegal actor financing of terrorism ; and {(c)repott othe NFIU any suspicions transaetion, stating clearly the reasons for the suspicion and actions taken {4) The obligation on finaiicia] instiutions provided for in this regulation shall apply whether the transaction is completed or not. (G) A finencial institution that faitsto comply within the stipulated timeframe with the provisions of — (2) subsregtation (1) of tis euttion is Hable to 2 fre 091,000,000 for eech day the offence subsists ; or (b) subregulation (2) of this regulation is Tile to sanction as stipulated under the Tertosism (Prevention) Act, 201 (as amended), (6) Any person wino being a dirsetor or emmpleyee of a financial institution ‘wars orin any other way intimates the ow.,er ofthe funds involved in a suspicious (ausaction report, or who refrains from making the report as required is liable to 1 fine of not less than N10,000,000 or banned indefinitely or for a period of net less than 5 years from practicing his profession, B 251B 252 Progedune forthe Monitoring, and Repoting or Suspicious Trarwactios, (7) The ditectors, officers and employees of financial institutions who carry cut their duties in good faith shall not be liable to any eivi or criminal liability, or have any eriminal or civil proceedings brought against them by their customers 32.—(1) A financial instinution shell have @ written Policy Framework that guides and enables its staif to monitor, recognize and respond appropriately co suspicious transactions in addition to the list of Money Laundering “&ed Flags” provided for in the Thicd Schedule to these Regulations, (2) Bvery Financial institution shall appropriately designare an officeras the AMLICFT Compliance Offices to supervise the monitoring and reporting of terorist financing and suspicious wansections, aiong other duties, (3) Financial institutions shail be alert to the various pattems of conduct that are known to be suggestive of money laundering. and shall maintain and disseminate a checklist of such transactions to the retevant staff (4) When any staf ofa financial institution detecisany “red flag" or suspicious money laundering or terrorist financing activity, the institution shall promptly ingtituce a “Review Panel” under the supervision of the AML/CFT Compliance Officer and every action taken shall be recorded, (5) A financial institution and its staftshal! maintain confidentiality in respect of any investigation conducted in pursuance ofthese Regulations andany suspicious transtction report that may be filed with the NFIU consistent with the provision of the Money Laundering (Prohibition) Act, 2011 (as amended) and the Terrorism, (Prevention) Act, 2011 (as amended), and shall not sy anything that might “ip ‘off eny person or entity that is under suspicion of money laundering, (6) financial institution that suspects or has reason to suspect that funds are the proceeds of a criminal activity or are related to terrorist financing shall promptly report its suspicions to the NFIU. (2) All suspicious transactions, including attempted transsetions are to be reported regardless of the amount involved. (8) The requirement to report suspicious transactions applies regardless oF whether they are considered to involve tax matters or other matters. (8) Financial institutions, their directors, officers and employees whether permanent or temporary, are prohibited from disclosing the fact that a report of a ‘transaction shall be filed with the competent authorities, (Jo) Incompliance with the Terrorism (Prevention) Aci, 2011 (asamenced), financial institutions are also requiced to, forward to the NFIU without delay but not later than within 24 hours, reports of suspicious transactions relating to— (@) funds derived trom illegal or leyal sources are intended vo be used for any act of terrorism 5 (2) proceeds ofa crime related to terrorism financing ; or (0) proceeds belonging to a terrorist, terrorist entity or organization,Pater VI—Monnioxisa, INnuanal. Conntons, PRONUITIONS AND SANCTIONS 3311) A financial insttution shall establish and maintain internal procedures, policies and controls to prevent money ‘aundeting and financing of terrorism and to communicate these to their eimplayces. (2) The procedures, policies and controls established by financial institution shall cover operational matters including the CDD, record retention, the detection of unusual and suspicious eunsactions and the reporting obligation, (3) The AMLICET Compliance Officer and appropriate staf gre to have timely access io customer identitTeation data, CDD informetion, transaction records and other relevant information. (4) Financial institutionsareaccordinely required 1a develop progiamsegainet money laundering and terrorist financing, such 2-— (a) the development of internal policies, procedures and controls, including appropriate compliance management arrangement and adequate screening procedures to ensure high standards when hiring employees ; (6) on-going employee iraining programs to ensure that employees are Kept informed of new developments, including information on current ML and FT techniques, methods and trends ; (©) providing lear explanation of all aspects of AMLICFT laws and obligations, and in particular, requirements coneersing CDD and suspicious twanseetion reporting ; and (2) adequately resourced and independent audi with the procedures, policies and contrals. (5) A financial institution shall pat in place a structure that ensures the operational independence of the Chief Compliance Officer (*CCO') and Branch Complianes Orticers. function to rest compli 34.1) Failure to comply with the provisions contained in these Regulations: shall attract appropriate sanction in accordance with the provisions of the MLPA. 2011 (as amended), existing laws on AMLICFT and as provided for under the provisions of the Second Schedule to these Regulations, (2) A Financia} institution, its officers or employees shall not benefit From any violation of extant AMLICFT laws and Regulations (3) A financial institution that fails to comply with, or contravenes the provisions in these Regulations, shall be subject to sanctions by the CBN (including the suspension or withdrawal of iis operating licence) (4) Any individual, being an official ofa financial instination, who fails 10 fake reasonable steps to ensure compliance with the provisions of these Regulations stall be sanctioned accordingly based on relevant provisions of the Money Laundering (Prohibition) Act, 2011 (as amended), the Terrorism (Prevention) B 253 Inter Contos, Compliance end Audi. Sanctions and Penstis toe Non Compliance,Bas4 Prohibition oF Nuinboied ‘Anorivmou Acvounts ‘Aecounis in Fieitious namessind Sell pans. ‘Othe forms. of Reverting. ‘Act, 2011 (as amended) end any other relevant law or Regulations, the extant administrative sanction regime issued by the Central Bank ef Nigeria or direction y the Aftomey-General of the Federation; including revocation, suspension or \witherawal of professional licnces by appropriate self-regulatory organizations (8) Criminal cases involving officers and the financial institutions shall be referred totherelevant lew enforcement ayencies forprasecution and the offender shall be liable to forfeit any pecuniary benefit obtained as u result of the violation or breech, (6) Incidence of false declaration, tilse disclosure, non-dectaration oF ion disclosure of retums to be rendered under these Regulations by a financial institution or its officers shall be subject 19 administrative review and sanctions as stipulated in theseor ether Regulations and the appropriate administrativeor civil penaies applic, 35.—(1) A financial institution shall not keep anonymous accounts or accounts in fictitious names. (2) A financial instivution shall not establish correspondent relationships: with high risk foreign banks, including shell banks with no physical presence in ‘any country or with eorressondent banks that permit their accounts to be used by such banks. {3} Shel! benks are prohibited fiom operating ih Nigeria as provided in Money Laundering (Prohibition) Act, 2011 (as amended) (@) A financial institution shall— (a) not enter into or continue fespondent or correspondent banking. relationships with chell hanks; and (b) satisfy ise that a sespondent financial institution ina foreign country does not permit its aecounts to be used by shell banks (3) A financial inscitution, corporate body orany individual that contravenes the provisions of this regulation shall on conviction be liable 10 a fine of not less than 810,000,000 and in addition to the— {ai prosceution of the principal officers of the corporate body + and (6) winding up and prehbition offs re-onstitution o incorporation under any form oF guise. (6) Afinanciel institution shall rake all necessary measures to setisty itself that respondent financial institutions ina foreign country do not permit their ‘aceounts co be used by shell banks. 36.—(1) A Financial institution shall report in writing any single transaction, lodgment or transfer of funds in excess @f"P45,000,000 arid M1 0,000,000 or their ‘equivalent made by an individual and comporate body respectively to the NFLU in aevordance with seetion [0(1) of the Money Laundering (Prohibition) Act. 2011 fas amended). (2) In compliance with seetion 2(1) of the Money Laundering (Prohibition)Act, 2011 (as amended) financial institutions shall render reports in writing on tranefars to or from a foreign country of funds or securities by a person or body corporate including a Money Service Busiiess of sum exceeding S$ 10,000 or its equivelent to CBN, Securities and Exchange Commission SEC") and the NFIU within 7 days from the date of the transaction, (3) Details ofa report sencby a financial institution to the NFIU shall nox be disclosed by the institution or any ofits officers 10 any other person. 37-—(1) A financial institution shall design comprehensive employee. education and training programmes, to make employees fully aware of theit obligations and also (0 equip them with ecleyana skills required for the effective discharge of their AMLICET tases (2) The siming, coverage and coment of the employee trainin programme shall be tailored io mezt the needs ofthe financial institution ensure compliance with the requitements and provisions of these Rezulations. (3) A financial institution shall provide comprettensive training programmes for sal? covering compliance officers and as part of the orientation programmes, for new staff aad those posted to the front office, banking operations and branch affice stall, particularly cashiers, account opening, mandate, and marketing staff, internal contiol and audit steft and managers. (4) A Ginancial institution shall render quarterly returns on their level of compliance on their education and training programines to the CBN and NFIU. (5) Anemployee training programme shall he developed under the guidance of the AMLICFT Compliance Dificer ia collaboration with the top Management. (6) The basic elemenis of the employes training programme of financial institutions shall include— (0) AML Regulations and offences ; (0) the nature of money laundering, (c) money laundering ‘red flags’ and suspicious transactions, including, trade-based money laundering typologies (d) reporting cequirements : (@) Customer Due Diligence (f) isk-based approach to AML and CFT; and (g) tecord keeping and retention policy. (7) financial institution shall sebmitits annual AMLICFT employee taining programme for the following year to the CBN and NFIU at the end of June and December every financial yeat B 255 AMLICET Enaployee cucation ant Trinin Programe,of omptoye cond Protection of Si? wo Report Violations, Addition sreasot AMLICET Risks ‘Adkiional Precelares ne Miligaons Testng Por the adeyuncy oF tke AML cer Conplinee, 38.—(1) A financial institution shall monitor their empleyees’ accounts for potential signs of money laundering, (Q)_A Financial institution shall subject employees aecounts to the same AMLICET procedures as applicable to other customers" accounts (3) The requirement specified in subregulation (2) of this regulation shall be performed under the supervision of the AMLICFT Chiel Compliance Ofer and the account of this officer is in tum to be reviewed by the Chiel Internal Auditor ora person of adequate and similar seniority. (4) Compliance reports including findings shall be rendered to the CBN and NFIU at the end of June and December of every year, (5) The AML/CFT performance review of staf shall be part of employees’ annual performance appraisals 39.—(1) A financial institution shall make it possible for employees to report any violations of the institution’s AMLICFT compliance programme to the A ML! CFT Compliance Officer (2) A financial institution shall direct i¢s employees in writing toakways coe operate fully with the Regulators and lew enforcement agents and to ptomptly Teport suspicious transactions to the NFIU: (3) Where the violations involve the Chief Compliance Officer, employess shall reportthe violations te a designated higher authority such as the Chief imie-nal Auditor, the Managing Direetor or in eanfidence to the CBN oF to the NFIU. (4) A financial institution shall inform itsemployees in writing tomake their reports confidential andl to assure employes of protection. fram victimization as a result of making any report. 40.—(1) A financiel institution shall review, identify and record other areas of potential money laundering risks not covered by these Regulations and report the risk quarterly to the CBN and NFIU. (2) A financial institution shall review its AMIICFT frameworks from time to time with @ view to decermining theit adequacy and idenuifving other areas of potential risks not covered by the AMLCET Regulations 41. After carrying oui the review of the AML/CFT feamework and identified sof potential money laundering vulnerabilities and risks, financial institution shall design additional procedures and mitigants as eontingeney plan in thelt AML/ CFT Operational Manua's with ingication on how such potential risks shall be appropriately managed where they crystallize and details of the contingency plan rendered to the CBN and NETU on the 31st December of every financial year, 4211) A financial institution shall make. policy ccmniiment and subjest its AML/CET Compliance Programme to independent-testing or require its intemal audit function to determine the adequacy, completeness and effectiveness of the programme:shall be rendered to the I year and any: identified ution, (2) Report of compliance by a financial institu CBN and NFIU by 315i December of every finane’ weaknesses or inadequacies promptly addressed by a finaneial in 43.—{1) ‘The ultimate responsibilty for AML/CET complionce is placeil on the Board and top Management of every finaneial institution in Nigeria. (2) ‘The Board ofa financial instiution shall ensure that a comprehensive ‘operational AML/CFT Poliey ang Procedure is formulated annually by Management ‘and presented to the Board for consideration and formal approvel, (3) Copies of the approved AML/CFT Policy and Procecure referred to in subregulation (2) of this regutation shall be forwarded to the CBN’ and NFIU in six months of the release of these Regulations (4) Monthly reports on the AMLICFT compliance status of » finan institution shall be presented to the board by the Chief Compliance Officer for its Information and necessary action 44, Every financial institution shal! have a comprehensive AMLICFT— compliance programme to ude its efforts and te ensure te diligent implementation of ts programme. to entrench inthe institution aculture of compliance, to mininiize the risks of being used 10 launder the proceeds of ctime and slso to provice Proteetion against fraud, reputation and Financial risks Parr ViI—Guibaner: Ou Know Yo Cussosen CRYC™) 46-—{(1) To further deepen finaneial inclusion, a thre tiered KYC standard shall be utilized to ensure application of flexible account opening requirements for low-value and medium value accounts which shall be subject to caps and ‘esuetions as the amounts of iranssctions ine-eaze where the account opening ‘exuirements shall increase progressively with eSs restrictions on operations stated in this regulation (2) Tier one for which— (@) basic customer information sequited :o be provided are (0) passport photograph ; (iA, name, place and date of birth : iti) gender, address, telephone number, ete + (4) information in paragraph (a) of this sub-regulation may be seat electronically or submitted onsite in bank's branches or agent’ office (c) evidence of information provided by a customer or verification of same isnot required (d) the accounts shall be closely monitored by the financial institution (€) the accounts thay be opened at branches of the Financial institutions by the prospective customer er through banking agents ; (Po amount is required for opening of acer unts = B 257 Formal Board anproral of he AML cr Complies. Culture of eomnpliae, ‘Thice Teed YC Reena,B 258 (@ such accounts may cover Mobile Banking products, issue accordance with the CBN Regulatery Framework for Mobile Payments Services in Nigeri (hy deposits may be made by account holder and 31d parties while withdrawal i retricted to account holder only (i) may be linked to robile phone accounts (7) operation s slid only in Nigeria; (4) limited ATM trarsactions are allowed : (2) a maximum single deposit amount is limited to'20.000 and maximum cournutative balance of ¥200,000 at any point in time 5 (m) international fimds transi is prohibited ; and (ny accounts ate strictly 5 (3). Tier two for which— (a) evidence of basic customer information such as passport photograph name, place and date of birth, gender and address is reauired (A) items in paragrap& (2) of this regulation may be forwarded electronically cor submitted on-site in banks’ brenches or agents’ offices ; (c), customer information obtained shall be against similar information contained in the official data-hases such as Naticnal Identity Management Comission (NIMC), Independent National Electoral Commission (INEC) Voters Register, Pedera! Road Safety Commission |FSRC) among others : (d) accounts may be opened face to face at any branch of'a bank by agents for enterprises used for mass payroll or by the aecount holder ; (e) evidence of basic customer information is required at this level and identification, verification and monitoring by financial institutions are also required () accounts may be contracted by phone or st the instiution’s websites (g) accounts may be linked to a mobile phone : (h) may be used for finds transfers within Nigeria only ; (i) the sccounis are sirieily: savingy (/) no ammount is required for opening of the accounts ; (4) such accounts cover Mobile Banking products (issued in accordance Mobile Payments Seevices in (J) maximum single deposit of N50,000and 9 maximum cumulative balance ‘of $400,000 are allowed at any time ; and (un) withdrawal shall be denied where cross-checking of client's identification information is not completed at the point of account opening.(4) Ties three for which— (a) a financial institution shell obtain, verity and maintain copies of all the required documents fer opening of accounts in compliance with the KYC requirements contained in these Regulations ; (0) no amount is required for opening of the accounts 5 (6) there is no limit on cumulative Balance, deposit and gransactions, and (@) KYE requirements shall apply. 46.—{1) A Financial institution shall not establish a business relationship until the relevant parties to the relationship have been identified, verified, and the nature of the business they intend to conduct ascertained, (2) Ware an on-going business relationship is established, any activity that ig not consistent to the business relationship shall be examined to determine ‘whether or not there are elements of money laundering, terrorist financing or any (3) The first requirement of knowing your customer for money laundering ‘and terrorist financing purposes, is forthe financial institution to be satisfied that 4 prospective customer is who he claims to be. (4) A Financial institution:shall nat engage in any Financial business or provide advice to a customer or potential customer except where the financial instiuation is sure or cerain as to who that person actualy is. (5) Where 9 customer is acting on behalf of another in a situation where funds are supplied by someone else or the investment is to be held in the name of someone else, financial Institution shall verify the Wentity of the customer, the agent or tistce except where the customer js itself a Nigerian regulate financial sion, (6) A Financial institution shall obtain evidence of identification of its eustomers. (7) -A'financial institution shell identify all relevant pasties to 2 business relationship ftom the beginning in accordance with the general principles of obtaining satisfactory identification evidence set out in these Regulations, 47. (1) A financial institution shalt obiain sufficient information on the nature ofthe business that its customer intends to undertake, including; expected ot predictable pattern of transactions. (2) The information obtained before the commencenieat of the business shall inelude— (a) purpose Yor opening the account or establishing the relationship ; (8) nature of the activity thet is to be undertaken : (6) expected origin of the funds to be usod during the relationship sand B 259 Diny v0 Ghai detiicaton Evidence, ‘Nature set Level of ine Business,B 260 (d) details of occupation, employment or business activities and sources of ‘wealth or income, (2) A financial institution shall take reasonable steps to keep the information up-to-date as the opportunities arise, include where an existing customer opens @ new account. (4) Any information obisined during sny esting, discussion or other communication with a customer shall be recorded and kept in @ customer's file to censue.as far espracticable, that current customer informnation is readily accessible by the Anti-Money Laundering Compliance Officers (AMLCOs?) or relevant regulatory bodies. ‘Applicaton 48.—(1) A financial institution shall take a risk-based approach of KYC or mexay BUREN hedgmen, {@) A financial instituion shall decile on the number of times to verify the customers” records during the relationsitip, the identification evidence required and when additional checks are necessary and its decisions shall be recorded G)_A financial institution shall for personal acount relationships, identity and verify al joint-account holders. (4) A Siacncial insitution shall for private company oe partnership, identify and verify the principal owners or controllers (3) The idemniticarion evidence obtained from the beginning of a business relationship shell be reviewed against the inherent risks in the business orservice, Idetitien 49, The customer identification process shall continue 10 exist throughout tion the duration of the business relationship. (2) The process of confirming and updating identity and address, and the ‘extent of obtaining additional KYC information collected may differ from one type of firancial institution te another G) The general principles for establishing the idertity of lewal and natural persons and the guidance on obtaining satisfactory identisieation evidence set out in these Regulations are not exlieustve. Facts to 50. In determining customer's identity under these Regulations, the cearsderin following shall be considered— eats tio (@) the name used : (0) date of binth 5 (¢) the residential address at which the customer ean be locate: (A) inthe case of a natural person, the date of birth shall be obtained 4s an important identifier in support of the name and there shall be no-obligation. to verify the date of birch provided by the customer ; and(.)awhere a international passport, drivers licence. INEC voter's card or national idemity card is teken as evidence of identity, the number, date and place or country of issue (as well as expiry date in the ease of international passport und driver's licence) shall be teccrdedt 51—{(1) The identity of a eastomer shall be verified whenever a business relationship is to be established, on account opening, during one-off transaction or where a deriv of linkid trarsuetions takes place (2) In these Regulations, “anseetion” include the wiving of advice and “advice” under this rezulation shall not apply where information is provided on the availability of products or services and when a first interview or discussion rior fo establishinz.a relationship takes place. (3) Where the identification procedures have been completed and business relationship established, 2s long as contact or eetivity és maintained and records conceming that complete and kept, no further evidence of identity shall be undertaking when another transaction or activity is subsequently undertaken. (4) Whece an investor finally realizes the investment made (wholly: or partially), where the amount payable is USS 1,000 oF its equivalent or above or such other monetary amounts as-may, from tinte to time be supulated by any applicable money laundering legislation or Regulations, the identity of the invesior shall be verified and reegrded where this hed not been done previously, (3) Where there isa cedemption or surrender of an investment (whally or partially), a financial institution shall take reasonable measures to establish the identity of the investor where payment is made to— (a) the legal avsner of the investment by means ofa cheque crossed “account payee" sor (#) e bank secount held (solely or jointly), inthe name of the legal owner ef the investment by any clestronie nieans, 52.—(\) Financial institutions shall obtain su ficient evidence ofthe client's Idemtity to ascertain that the client is the person he elairas to be, (2) Where w person is acting on behalf of another, the obligetion isto obtain sufficient evidence of identities of the wo persons involved 53.—(1) Nowvithstanding the provisions of regulation 52 of these Regulations, in situation of consortin the lead-imanager or agent shall supply a confiemation latter as evidence that he has obtained the eequired identity. lendi (2) There is no obligation to look beyond the client where— (c) the client is acting on its own account (rather than for a spesific client or group of clients); (6) the elisnt is a bank, broke institutions ; or fund manager or other regulated financial B261 Time for Werification Identity. Verification of Identity. Exceptions,B 262 Adeitiona! Veriiation Regine ents mtifteaion ‘0 Dineetors fad thor Signatories. Joint ‘Account Holders Verification ‘af Idenvity for igh Risk uiows buy uw keep wah of sigpicant shanges in nature of business Yeitienion of identity of Peon providing Funds foe Tes. (0) all the businessesare to beundertaken in the name of'a segulated financial institution. 54. In other circumstances, except where the elicnt is a1 institution acting 28 agen. on behalf of one or more undesiying ch ji, and has given written assurance that it has obtained the recorded evidence ly to the required standards, identifieation evidence shall be verified fox— (4) the named account holder or person in whose name an investment is registered ; (6) any principal beneficial owner of furids bsing invested who is not the account holder oF named investor (© the principal eontroller ofan account or business relationship including «hose who regulanly provide instnuctions ; and A) any intomvediate pariies includ ‘or owned by an intermediary. cases where an account is managed 55. A Ginancial institution shall identify directors and all the signatories to fan avcount. 56. Identification ‘account hoiders, ince shall be obtained {or all joint applicants or 57. For higher risk business undertaken for private companies including these not listed on the siock exchange sufficient evidence of identity and address shall be verified in respeet of — (a) the principal underlying benef interest and above ; and ial owner(s) of the company with 5% (b) those with prineipal control over the company’s assets (e.g. principal controllers or directors), 58, A financial institution shall— {a) be atalertin eizcumstances thet may indicate any significant changes in the nature of a business or its ownership and shall make enquiries accordingly; and {h) observe the additional provisions for High Risk Categories of ‘Customers under AML/CFT directive in these Regulations. $9_—(1) A financial institution shall obiain and verity the identity ef those providing funds for Trusts. (2) The identity of those providing funds for Trust envisaged under these regulations include the seitlor and those whe are authorized to inyest, transfer funds or make decisions on behalf of the Trust such as the principal trustees and controllers who bave power fo remove the Trustees.60. Where an investor sets up a savings account or a regular savings scheme whereby, the funds are supplied by one person for investment in the hame of another (sueh as in the ease of a spouse oF a child), the person who funds the subscription or makes deposits into the savings scheme is for all intent smd purposes, the applicant for the business in question and for such person, identification evidence shall be obtsined in addition to that of the legal ower. 61—{1) Identification evidence shall be ebiained at the outset for all investors, except personal pensions connected to a policy of insurance taken Out by virtue of w contract of employment or pension scheme, (2) Personal pension advisers are charged with the responsibility of ebiaining: the identifleation evidence on behalf of the penston fund praviderand confirmation that identification evidence has been taken shall be provided on the ansfer of a pension to anotler pension find provider. 62.—(|} An acceptable time-span for obtaining satisfactory evidence of identity is determined by the nauure of the business, the geographical location of the parties and the possibility of obtaining the evidenee before commitments are entered into of actual monies given or receive. (2) Any business conducted before satisfactory evidence of identity has been obiained shall only be in exceptional cases and under circumstances that can be justified with regard to the risk and in such a ease, financial institution shall (2) obtain identification evidence es soon as reasonably practicable alter it has contact with « client with a view to agreeing with the client to verry out an initial wansaction or reaching an understanding, whether binding or not, with the elient that it may eaery out future transactions ; and (6) where the client does not supply the required information a stipulated in paragraph (a) of this regulation, the financial instiution shall discontinue any activity itis conducting forthe elentané being ton end any understanding reached withthe client, (3) A financial institution shall also observe the provision in the t verification under the AMLICFT directive contained in these Regulations. ing of 4) A financial institution mey however stat processing the husiness or ‘pplication immediatly, provided thatit— (a) prompity takes appropriate steps to obtain identification evden (8) does not transfer o- pay any money out to a third party dnt the identification requirements are carried out, and 63—(1) The failure or refusal of an applicant (o provide satisfactory identification evidence within reasonable time and without adequate explanction ‘may lead to a suspicion thatthe depositor or investor is engaged in money laundering. B 263 Savings sehemesand in third parties? Pessonal Pension Schemes Viming of Monies lion Reelin mens. Consequence oF ihe t provide Satisfactory denietion| FvideseeB264 Ineieaion Procedures, ww usiness for cessing Costomer (2) A financial institution under the situation stipulated in sub-regulation (|) Of this regulation shall immediately make an STR to he NFIU based on the information in its possession before the funds involved ave retismed to the potential client or original source of the funds. (2) A financial institution shall have in place writen ard consistent policies of closing on account o° unwinding a transaction where satisfactory evidence of identity cannot be obtained. (4) A financial institution i made by competent authorities a customers. algo required to respond promptly to inquiries -d Financial institutions on the identity of their 64.—(1) A Finaneial institution shall ensure thet it is dealing with a real person of organization whether natural, comporate or legal, by obtaining sufficient identification evidence (2) Where reliance is placed on a third party to identify or verify the identity of an applicant, the overall responsibility for obtaining satistactory iddertification evidence resis with the aecount holding financial institution, {3) In all eases, itis mandatory to ebiain satistictory evidence thaca person, lives at the address he provided and that the applicant is that person or that the company has identifizble owners and that its representatives can be located at the address provided. (A) The identification process should be cumulative, as no single form of identification ean be fully guaranteed as genuine or represent correct identity. (3) The procedures adopted to vevify the identity of private individuals, whether ornot identification was done face-lo-fhee o- remotely, shal be staed in the customer's ile and the resonable steps taken toavoidsingle, multiple ficutious applivations, substicution (impersenation) or freud shall be stated also by the financial institution in the client's Ble (6) An intraduction trom a respected eustomer, ¢ person personally known toa Director or Manager or a member of staff often provides comfort but shall net replace the need for identification evidence requirements fo be complied with a5 yet out in this Regulation, (7) Details oF the person who initiated and authorized the introduction should be kept in the customer's mandate file along with other records and the Directors or Senior Managers shall insist on the prescribed identification procedures for every applicant 6541) Where ariexisting customer closes one account and opens ancther or enters into @ new agreement to purchase products or services, it shall net be necessary 10 verily the identity ar address for such a customer unless the name or the address provided does not tally with the intormation in the financial institution's records, provided that procedures are pul in place to guard against impersonation or fraud.(2) The opportunity of opening the new aceountreferred wo in sub-regulaiion (1) of this regulation shall be utilized to ask the customer to confirm the relevant details and to provide any missing KYC information and where— (a) there was an existing business relatiouship with Ure customer and identification evidence had not previously becu obteined ; () there had been no recent contaci or correspondence with the eustomer within the past three months ; or (©) @ previously dormant account is re-activated, (3) In the circumstances in sub-regulation (2) of this regulation, details of the previous account and any identification evidence previously obtained or sny introduction records shall be linked to the new account-records and retained for the prescribed period in accordance with the provisions of these Regulations, 66.—1) In order to guard against the dengers of postalinterception and fraud, prospective customers shell nat be asked to send originals oftheir valuable personal iderity documents including international passpor. identity cad, driver's licenee, by post. 2) Where chere is no face-to-face contact witha customer and documentary evidence is required, certified truc copies by a lawyer, notary public or cour of competent jurisdiction, banker, accountant, senior public servant or their equivalent in the private sector shall be obtained provided thet the person undertaking the certification 's known end capable of being contacted. In the ease of a foreign rational, a copy of intemations! passport, national identity card or documentary evidence of his address shall be certified by— (a) the-embassy, consulate or high commission of the country of issue + (6) a senicr official within the account opening institution ; or (6) a lawyer oF notary publi (3) Certified True Copies of identification evidence are to be stamped, dared und signed “original sighted by me” by 2 senior officer of the financial instiustion, (4) A fisaneial institution shall always cisurethit 8 good production of the Photographie evidence of identity is cbrained provided that where this is not possible, a copy of evidence certified as providing a good likeness ofthe applicant is acceptable in the inter 67.—(1) Records of the supporting evidence and methods used to verify identity shall be retained for a minimum period of five years after the account is closed or the business relationship ended 2) Where the supporting evidence cannot be copied at the sime it was presented, the reference numbers and other relevant details of the identification ‘evidence shall be recorded 10 enable the documenis to be obtained later, B 265 Cartffeation or enifietion Document. Resanding Wenctieton EvidenesB 266 Conscision in respect of Poyment made by Post (3) Confirmation of evidence in sub-regulstion (2) of this regulation shall bo provided that the origins! documents were scen ty certifying either on the photocopies or on the record that the details were taken down as evidence. (4) Wheee checks are made electronically, a record of the actual information obtained or where itean be re-obtained shall he retained as part ofthe identification evidence, (8) _ The record in sub-regulation (4) of this regulation shall make the reproduction of the actual information that would have been obtained before, less cumbersome 68.—(1) Whete the money laundering risk is assessed to be ow, concession may be granted for product or services in respect of long-term life insurance Dusiness or purchase of personal investment products (2) Where payment is to be made from an account held in a customes"s name ar joinely with one ormore ther persons, at a regulated financial institution, no further evidence of identity shall be necessary. (3) Additional verificerion requirements for postal orélectronie transactions shall apply to the fallowing— (2) products or accounts where funds may be transferred to other types of products or accounts which provide cheque or money transfer facilities 5 (0) situations where funds may be repaid or transferred to a person ether than the original eustomer ; and (e) investments where the characteristies of the produet or account may change subsequently t¢ enable payment to be made to thice parties. (4) Postal coneassion shall not be an exemption fom the raquieerent to satisfactory evidence af a customer's identity and payment debited from an account in the customer's name shall be capable of constituting the required identification evidence in its own right. obi (8) To avoid proceeds of erime from being laundered by a customer who cases a third-party cheque, draft or electronic payment drawn on a bank, payment from joint accounts shall be considcted acceptable for this purpose where dhe name of the account holder from where the funds have been provided shall be clearly indicated on the eecord reflecting che payment or reczint. provideekthet 9 financial institution may rely upon the required docamentary evidenve of a third party, without further verifieation of tne identity, where there is ne epparent inconsistency between the name in which an application is made andthe name on the payment instrument. (6) In the case of a mortgage institution's cheque or benker’s dra, it shall only be possible to rely on the concession in sub-regulation (5) of this regulation where the holder of the account from which the money is drawn is confirmed to hawemet the KYC requirements by the morgage institution or bank, and paymentbby direct debit ar debit card shall be relied upon exceptthe authentication procedure identifies the name of the account holder from which the payment is drawn and confirms the customer's addres, (7) Im respect of direct debits, it shall not be assumed that the account- holding baak-or institution may-carry out any form of validation of the secount ‘name and number or that the mandate shall be rejected where they do not match, (8) Where payment for the product is to be made by direct debit oF debit «avd or notes, and the applicant's account details have not previeusly been verified through sighting of'a bank statement or cheque drawn on the account, repayment proceeds shall only be retuned to the account from which the debits were drawn, (9) Records shall be maintained indicating how a transaction arose, including etails of the financial insiiuition’s branch and account number fom which the cheque or payment is draw. (10) The concession in this rezulation may apply both where an applic is made directly to the financial institution and where a payment is passed trough a regulated intermediary, (11) A financial instixtion that has relied on the postal concession to avoid additional verification requirements; which shall be so indicated on the eustomer’s file, cannot introduce that customer toanother Financial institution for the purpose of offering bank accounts or other products that providle cheque or money transmission facilities. (12) Where the customer in sub-regulution (11) of this regulation wishes wo migeate to an gevount that provides cheque or third panty wansfer facilities, additional identification chocks shall be undertalcen at that time, and where these circumstances occur on a regular basis a financial institution shall identify all the parties to the relationship at the outset, 69. ‘Term Deposit Accounts (*TDA’) can be broadly classified as @ one-off ‘ansnetion provided that a Financial institution shall note that concession is not available for TDAs opened with cash where there is no audit tral of tne source of funds or where payments to ar ftom third parties are allowed into the wecount, 70, Where the balance in an investment fund account is transferred from one funds manayer ro another ard the value at that time is above $1,000 or fis equivalent and identification evidence has not been taken or confirmation obtained from the ceriginal fund manager, such evidence shall be obtained al the time of the transfer, Parr VITI—Gunerat, INFORMATION divided into three broad 71, Establishing identity under these Regulations ‘categories, namely — (a) private individual customers : (b) quasi corporate customers: and (©) pure corporate customers. B 267 Yorn Deposit Account cpa), Invastinent Funds. Establishing FernyB28 Private Fedividuels Gover Toformation, Prive Individual Resident in Nigsria, acumen Evidence of Identity, 7L—A1) The following information shall be established and indeperderaly validated for all private individuals whose identities need to be verified— (a) the full name used ; and (®) the permanenchome address, including landmarks anc posteode, where anailable, (2) The information obiained shall provide satisfection that a person ofthat name exists at the address given and thet the applicant is that same person $9 indicated, and where an applicant has recently moved from his residenee, the previous address shall be validated, (3) The date of birth shall be obtained as required by the Inw enforcement ‘agencies, provided that the information need not be verified and the residence or nationality of a customer is ascertained to assist risk assessnent procedures. (4) A risk-based approach shall be adopted when obtaining satisfhnetory evidence of identity, (3) The extent ané number of checks may vary depending on the perceived risk of the service or business sought ané whether the application is made in person cr through a remote medium such as telephone, pos! or the intemet, (6) The source of funds of how the payment was made, from where and by whom shall always be recorded to provide an audit trail, provided that for hizh risk products, aeounts or customers, additonal steps shall be taken to ascertain the soutee of wealth or funds, (7) For low-risk accounts or simple investment products such as deposit of savings accounts without cheque-books or automated money’ transmission facilites, the finencial insstusion shall saiistY iselas to the identity and address of the customer. 73-—(1) The confirmation of name and address shall be established by reference to 2 number of sources. (2) The checks shall be undertaken by cross-validation thet the applicant exists at the stated address either through the sighting of actual documentary evidence or by undertaking elecrronie checks of suitable databases or by a combination of the two. (3) The overriding requirement to easure thet the identification evidence is setisfactory shall rest withthe financial institution opening the account er providing the product or service. 741) To guard against forged or counterfeit documents, care shall be taken to ensure that documents offered are originals. (2) Copies that are dated and signed ‘original seen’ by senior publi servant or equivalent in a reputable private organization may Se secepted in the imerim, pending presentation of the original documents,(3) Suitable documentary evidence for private individuals resident in Nigerian as contained in the Second Schedule to these Regulations. (4). Checking of a lecal oF national telephone ditectory may be used as Adaitional corroborative eviderce but shall not be used as a primary check. 78—(1) A financial institution shall establish the true identity and address of its customer and carryout effective checks to protect the institution against substitution of identities by applicants. 2) Additional verification of @ customer's identity and ihe fact that the application was made by che person identified shall be obtained through one ot more ofthe following procecures— (a) direct maiting of azcount opening documentation to a named individual aan independently verified address; (#) en initial deposit cheque drawn on a personal account name in another financial institution in Nigeria ; nthe applicant's (€) telephone contact with the applicant prior to opening of dhe account on an independently verified home or business number or a “welcome call” to the customer before transactions are permitted, utilizing a minimum af two pieces ‘of personal identity information that had previously been provided during the setting up of the account ; (2) internet sisson following verification procedures where the cusiomer uses security codes. tokens, or other passwords which had been set up during, account opening and provided by mail orsecure delivery, to the named individual alan independently verified address or (2) card oF account activation procedures. (3) A Financial institution shall ensure that additional information on the nature and level of the business to be conducted and the origin of tie funds to be used within the celationship are obtained from the customer, 76.—{}) An applicant's identity, address and other available information may be checked electronically by accessing other data-bases or sources, as an altemative or supplementary to documentary evidence of identity or address. (2) A finareial institution ste use @ combination of electronic, documentary ind physical checks to confirm different sources ofthe same information provided by a customer (3)_ In respect of electronic checks, confidence as to the reliability of infonnation supplied shall be established by the cumulative nature of checking actossa range of sources, preferably covering a period of time orthrough qualitative cheeks that assess the validity of the information supplied. (4) The number or quatity of checks to be undertaken shall vary depending con the diversity as well as the breath and depth of information available from each B269 Pysieal Cheeks on Private Inutviduale Resident in Nigeria, Elecronie Cheeks,B 270 ici slit Tore steer Eoancaly sesso Apnea kstuentin Nee (5) Verification that the applicant is the datessubject shall be conducted within the checking process. (6) Suitable electronic sources of informetion include — (@) un cleosroni¢ search of the electoral register not be used as a sole identity and addroas check ; (by aecess to invernal or extemal account database ; and (c) ‘an electronic search of pubsie records where available (7) Application ofthe proves und provedurss in chis reputation shal asist Francia institutions to guerd against impersonation, invented-identitias and the use of false addresses proviced that where an applicant is a non face-to-face person, one or more additional measures shall be undertaken for reeassurance Pay IXGPNANCAL BxeLisen’ poe yn SOCIALLY Inn FHSANCeNLLY DSADVANtAcin APrLICAN Is THAN), Notwithstanding that access to basic baiking feclities and other financial services is a necessary requirement for most adults, the socially or Financially disadvantages shall not be preciused from openingaccountsor obtaining cuter financial services merely because they do not possess evidence (@ iden themselves. (2) ‘The socially or financially disadvantaged shall not be presided fiom opening aecounts oF obtsining other Shancial services merely because Vey co not possess evidence to identify themselves since access to basie barking fheilities and other financial services is a necessary requirement for most adults, (3) Where the socially or financially disadvantaged cannot reasonebly ceimply with sub-reguletion (1) ofthis regulation, the internal procedures of the financial institution shall make allowance for such persors by way of provicing appropriate advice to staf on how the identities of such group of persons may be confirmed and what checks shall be made under these excep.ional circumstances. (4) Wherea financial institution has reasonable grounds to eoneluide that an individual client is not able to produce the detailed evidence of his identity and caro: reasonably be expected to dos. the jastiwuticn may acceptas identification ‘evidence, » letter of statement fren 1 person in a position of responsibility such fs solicitors, doctors, ministers ol veligicn and teachers who know the eliant, confirming that the client is who he says he is and his permanent address. (5) Whena financial institution has decided to treat a client as “financially excluded”, it shall record the reasons for doing so along with the zecount operi documents, and returns of same shall be rendered to the CBN and NFIU quarterly. [6) Where w letter ot statement is accepted from & person in pasition of responsibility, it shall includes telephone number whats the person can be contseledl {or verification and the financial institution shall verify from an independent soureethe information provided by that person $0 as to satisly itself thal stich customer is the person he claims to be, (7) A finanea| institution shall include in its iruernal procedures the “alternative documentary evidence of personal identity and suldress” that may be accepted to guard against “Haancial exclusion” and lo minimize the use of the exception procedure. (8) A firvancial institution shall putin place additional monitoring for accounts pened under the financial! inclusicn procedures to easure that such accounts are ot misused, 78.—{1) Intemational passports or national identity cards shall generally be vatlable as evidence of the name of a customer and reference numbers, date ang country of issue shall be obtained and recorded in the customer's Ne as part of the identificotion evidence in reepee! of prospective eustomers whe are riot resident in Nigeria but who make face-to-face contact (2) A financial instiution shall obtain separate evidence of an applicant's Permanent residential address ftom the best available evidence, prelerably from an official souree. 3) A PostOlice Box number (°®O.Box Number”) alone shall not beaeeepted as evidence of address and the applicant’ residential adress shall be suc that it may be physically located by way of a recorded description or other means. (4) Relevanc evidence shall be obtained by the financial institution directly from the customer oF through @ reputable credit oF financial institution in. the applicant's home country or country of residence, provided that particular eave shall be taken when relying on identification evidenee obtained from other countries, (5) A financial instiution shall ensure that a customer's true identity and. current permanent address arg actually confirmed, Inguch eases, sopies of relevant identity documents shall be sought and retained national has recently arrived in Nigeria, reverence may ele. 10 (6) Wherea forei bbe made to his employer, university, evidence of traveling documents verify the applicart’s identity and residential address, (7) For ¢ private individual not resident in Nigeria, who wishes to supply ocumentary information by post, telephone or electronic means, « risk-based approach shall be taken where the financial institution shell cbrain ane separate item of evidence of identity in respect of the name of the customer and one separate item tor the address. (8) Documentary evidence of name und adress may be obtained from (W) an original documentary evidence supplied by the customer; (0) a certified copy of the customer's passport or national identity eard sad a separate certified document including uiliy bill and driving licence, verifying the customer's address ; or B271 Private Irxtiveduals pot resident inNiwera,B272 Nov Fast took: ents bon, etagecsor Asilum Seekers. (c} a branch, subsidiary, head office of a correspondent benk. (©) Where an applicant does not already have a business relationship with the financi jon that is supplying the information o- the financial institution is outside Nigeria, certified copies of relevant underlying documentary evidence stall be sought, obtained and retained by the institution. (10) An additions! comfort shall be ofvained by eon firming the customer's true name, address and date of birth from a reputable credit instiuuion in the customer's home country, where nevessary. G11) A financial institution shall use requirements in this regulacion in ‘conjunction with the First Schedule to these Reguiaiions. 79.—{1) In respect of a non face-to-face customer, an additional measure ‘orcheck shall be undertaken to supplement the documentary or electronic evidence {0 ensure that an applicant is who he claims to be and these additional measures shall apply whether the applicant is resident in Nigeria or elsewhere anc! shall be particularly robust where the applicant is requesting a bank account o- other Product or service that offers money transmission or third party payments. (2) Procedures to identify and outhenticate a customer shell ensure that there is sufficient evidence either documentary or electronic toconfirm his address and personal identity and to undertake at least one additional check to guard ‘against impersonation or fraud. (3) The extent of the identification evicence required in ths regulation stall ‘depend on the nature and characteristics ofthe product or service and the assessed ‘sk, provided that care shall be taken to ensure that the sarne lave! of fnformation is obtained for intemet customers and other postal or telephone customers (4), Where reliance is placed on intermediaries to undertake the processing cof applications on the customer's behalf. checks shall be undertaken to ensure ‘thatthe intermediaries are regulated for money laundering prevention and that the relevant identification procedures are applied. (5) A financial instiution shall conduct regular monftoring of internet-based business or elients and where a significant proportion of the business is operated clecironically, computerized monitoring systems or solutions that are designed to recognize unusual transactions and related patterns of transactions shall ne put in place to recognize suspicious transactions. (6) In all cases, evidence as to how identity has been verified shall be ‘obtained and retained with the account opening records. (7) AMLICFT compliance officers shall review these systems of solutions, record exemptions and report same quarterly to the NFTU. 80.—(1) Where a refugee orasylum seeker requires a basic bank account without being able 10 provide evidence of identity, authentic references fiom the Nigerian Immigration Services endorsec: by the State Sceurity Serviees shall be used in conjunetion with other readily available evidence(2) Additional monitoring procedures shall be undertaken in respect of sub- regulation (1) of this regulation to ensure that the use of the account is consistent with the customer's circumstances. 81.—(1) When opening accounts for students or other young people, the normal identification procedures set out in these Regulations shall be followed and where such procedures may not be relevant or do not provide satisfactory identification evidence, verification may be obtained through — (@) the bome address of the parent ; (®) confirming the applicant's address from his institution of learning ; or (6) seoking evidence of a tenancy agreement or student accommodation contract 2) An account fore minor may be opened by a family member or guardian and where the adult opening the account does not slready have an account with the financial institution, the identification evidence for that adult or of any other Person who will opetate the account shall be obtained in addition to obtaining the birth certificate and passport of the child, provided that strict monitoring shall be undertaken, (3) For accounts opened through a school-related scheme, the school shall provide the date of birth and permancnt address of the pupil and complete the standard account opening documentaticn on behalf of the pupil (4) Account ofa minor shal] be constantly monitored to ensure that itis not used for the purposes of money laundering or terrorist financing and that the transaction does not exceed an amount that should be determined by the financial institution. 82. Trusts, nominee companies and fiduciaries are popular vehicles for criminels wishing to avoid the identification procedures and mask the origin of the dirty money they wish to launder. The particular characteristies of Trust that atiract the genuine customer, the anonymity and complexity of structures that they can provide are also highly attractive to money launderers. Pat X—Taust, Pouicy, Ructier ao PavMenr oF Fusos 83.(1) Truste, nominees and fidu laundering risk than others. (2) Idemtiication and “Know Your Customor’s Business” procedures shal be set and managed in accordance with the perceived rick {G) The principal objective of money leundoring prevention susts, nominees and fiduciaries shall be to verify the identity ofthe provider of funds such as the seitlor, and those who have contol ever funds like the tusteesand any controllers ‘who have the power to remove the trustees. (4) For discretionary or offshore trust, the nature and purpose of the tust ‘and the original source of funding shall be asce-tain d accounts present @ higher money B27 Students and Minors, Quasi Corporate Customers, Trust, Nominees ard Fiductases