CBN orders banks to freeze accounts linked to terrorism financing

THE Central Bank of Nigeria (CBN) has instructed banks and other financial institutions to immediately freeze accounts and assets belonging to individuals and organisations linked to terrorism financing.

The directive was conveyed in a circular issued on Thursday and signed by Olubunmi Ayodele-Oni. According to the apex bank, the action follows recent sanctions imposed by the Nigeria Sanctions Committee and the United States Treasury Department’s Office of Foreign Assets Control (OFAC).

The development comes after US authorities identified 3 individuals and 6 entities allegedly involved in financing the Islamic State (ISIS). Among those listed were 3 Nigerian bureau de change (BDC) operators located in Lagos and Kano.

In its circular, the CBN directed all financial institutions to freeze, without prior notification, any funds, assets or economic resources owned, controlled or held, either directly or indirectly, by the designated persons and entities.

The regulator also ordered banks to screen their customer databases, beneficial owners and transactions against the updated sanctions list. Financial institutions were further instructed to ensure that no financial services, funds or economic resources are made available to the sanctioned individuals or organisations, whether directly or indirectly.

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Additionally, the CBN mandated banks to file suspicious transaction reports (STRs) with the Nigerian Financial Intelligence Unit (NFIU) whenever a confirmed or attempted match is detected.

Financial institutions are required to submit compliance reports to the CBN within 48 hours, detailing any identified matches, affected accounts, amounts frozen and measures taken. The apex bank noted that institutions must submit nil returns where no matches are found.

The regulator also urged banks to strengthen surveillance of transactions that may indicate terrorism financing, including rapid movement of funds, transactions involving money service businesses and dealings connected to high-risk jurisdictions.

The CBN warned that failure to comply with the directive could attract penalties under the Banks and Other Financial Institutions Act (BOFIA) 2020 and other relevant laws.

To ensure adherence, the apex bank said it would carry out off-site reviews, on-site examinations and supervisory engagements to monitor compliance with the sanctions requirements.