Anti-Money Laundering And Combating The Financing Of Terrorism Policy and Procedure Manual

Friday, February 8, 2019 6:24PM / CBN

Background

Mandate of CBN

The Central Bank of Nigeria Act 2007 (as amended) enumerated the core functions of the Bank as follows;

1. Ensure monetary and price stability;

2. Issue legal tender currency in Nigeria:

3. Maintain external reserves to safeguard the international value of the legal tender currency;

4. Promote a sound financial system in Nigeria and;

5. Act as Banker and provide economic and financial advice to the Federal Government.

In carrying out these core mandates, the CBN has over the years performed some major developmental functions, focused on all the key sectors of the Nigerian economy (financial, agricultural and industrial sectors, etc.) to promote sound financial system. The role of the CBN as a Banker to the Federal Government entails offering financial advice and maintenance of accounts for Ministries, Departments and Agencies of government. The Bank also maintains accounts for financial institutions within Nigeria and with financial institutions outside Nigeria.

Objective

The objective of this AML/CFT Manual is to set out policies and procedures to guide employees and the Bank to conduct business in accordance with applicable Anti-Money Laundering (AML) laws and regulations. The manual aims to establish procedures and minimum standards to protect the CBN from being used as a channel to launder money, finance terrorism and other forms of financial crimes.

Scope

The CBN AML/CFT Manual sets minimum standards for employees of the Bank to comply with AML/CFT laws and regulations in the following broad areas:

i. Conduct of financial services;

ii. Dealings with third party beneficiaries (such as consultants and contractors); and

iii. Employees conduct.

This manual is guided by the Money Laundering Prohibition Act 2011, Terrorism Prevention Act 2011 and other applicable relevant laws and regulations.

Applicable Relevant Laws and Regulation

Other applicable laws and regulations include;

i. Money Laundering (Prohibition) Act, 2011 (as amended)

ii. Terrorism Prevention Act, 2012 (as amended)

ii. Terrorism Prevention (Freezing of International Terrorist Funds and other

Related Matters) Regulations, 2013

iv. Economic and Financial Crime Commission (EFCC) (Establishment) Act 2004

v. Banks and Other Financial Institutions Act (BOFIA) 1991

vi. CBN AML/CFT Regulations, 2013

vii. CBN Act 2007

viii. CBN AML/CFT Risk-Based Supervision Framework, 2011

ix. CBN Circulars and other communications by regulators

x. National Drug Law Enforcement Act (1990)

xi. Other international instruments (such as FATF Recommendations, United Nations Security Council Resolutions) (UNSCR)

CBN AML/CFT Policy Statement

The Central Bank of Nigeria provides banking services to the government and deposit money banks. Its primary function as a regulatory institution precludes it from most of the provisions of the Money Laundering (Prohibition) Act, 2011 (MLPA), Terrorism Prevention Act, 2012 (TPA) and the Central Bank of Nigeria Anti-Money Laundering/Combating the Financing of Terrorism Regulations, 2013 (CBN AML/CFT Regulations). The Bank, however, ensures that its processes, policies and procedures conform to the spirit of the provisions of these laws, international protocols and agreements.

The Bank supports its staff to achieve the highest standards of compliance and integrity. Employees shall fully understand and be guided by these standards in the conduct of business and dealings with stakeholders. Protecting the good name and the reputation of the Bank shall be a primary consideration in all actions taken by employees.

The Bank therefore shall maintain the highest operating standards to ensure that its products and services were not used for the purpose of Money Laundering, Terrorism Financing or other crimes through investments in training, material resources, the use of appropriate technology and collaboration with other Regulators and Law Enforcement Agencies.

The AML/CFT operation in the Bank shall be reviewed by Internal Audit Department as well as External Auditors to ensure implementation of policies and procedures related to AML/CFT.

Overview of CBN Compliance Framework

The AML/CFT Compliance function, domiciled in the Governors’ Department of CBN, generally focuses on the identification of AML/CFT compliance responsibilities, assessment of risks, advice, monitoring, and reporting on the Bank's compliance with applicable laws, regulations and codes of conduct, and assist in the prevention of violations of the same in the Bank.

The AML/CFT Compliance Office develops the format for use by Strategic Business Units of the Bank to render periodic reports. It shall also assess the appropriateness of the Bank's AML/CFT compliance procedures and guidelines, promptly follow up any identified deficiencies, and (where necessary) formulate proposals for improvement.

AML/CFT Compliance Structure

• The Chief Compliance Officer (CCO) of the Bank (who is at the executive level) reports to the Board (Audit Committee) through the Director, Governors’ Department. The administrators of the Departments and Head, Banking Office in the Branches shall be the Compliance Officer of their Strategic Business Units (SBUs). The Compliance Officers in the Departments and Branches shall report to the CCO through the head of their SBUs.

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