Exercise Due Diligence In Dealing With Russia, Korea, Others, CBN Warns Banks.

By Mohammed Bello Doka

The Central Bank of Nigeria (CBN) has issued a warning to Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) in the country regarding their transactions with businesses and individuals in certain countries.

In a circular with the reference FPR/AML/PUB/BOF/001/029, Mr. Chibuzo Efobi, the Director of Financial Policy and Regulation at the CBN, highlighted the need for caution when dealing with the Russian Federation, the Democratic People's Republic of Korea, Iran, and Cameroon.

The CBN's warning is based on these countries being identified as high-risk jurisdictions by the Financial Action Task Force (FATF), the global watchdog for money laundering and terrorist financing. The FATF sets international standards that aim to prevent illegal activities and the associated harm to society.

The circular explains that the CBN's action aligns with decisions made by the FATF during a plenary session held last month. The directive calls for increased monitoring of transactions with Cameroon, Croatia, and Vietnam, which have been recently added to the list of jurisdictions in need of heightened scrutiny.

In addition, it emphasizes that the suspension of the Russian Federation from the FATF remains in effect. The Democratic People's Republic of Korea, Iran, and Myanmar also continue to be classified as high-risk jurisdictions subject to a "Call for Action."

The CBN urges financial institutions to exercise enhanced due diligence and, in severe cases, implement counter-measures to safeguard the international financial system. 

They are advised to remain vigilant and alert to potential emerging risks stemming from attempts to circumvent protective measures put in place to safeguard the international financial system.

Financial institutions are directed to stay informed about any additions to the jurisdictions under increased monitoring, as well as high-risk jurisdictions subject to a "Call-for-Action," and implement necessary measures to effectively mitigate associated risks.

By issuing this warning, the CBN aims to reinforce the importance of anti-money laundering and counter-terrorism financing measures in the Nigerian financial sector and ensure the integrity of the international financial system.

This story was edited using writerly AI App