CBN Orders Banks To Investigate, Monitor Bank Accounts Belonging To Nigeria Politicians

The Central Bank of Nigeria (CBN) has ordered that transactions and accounts belonging to Politically Exposed Persons (PEPs) in Nigeria should be monitored and subjected to periodic reviews.

VerseNews Nigeria report that the Apex Bank gave the directive in a circular released on Friday, June 23, 2023,  titled ‘Guidance Notes on Politically Exposed Persons’ and signed by the Director, Financial Policy and Regulation Department, Chibuzor Efobi.

According to the circular, Commercial Banks and all Financial Institutions were instructed that accounts of PEPs should be subject to periodic review and that the frequency of such reviews should be determined by the risk of the customer and documented appropriately.

The CBN added that transactions and activities should be scrutinized for money laundering and terrorist financing among other risks.

“PEP accounts should be subject to periodic reviews as may be determined by the FI in line with risk assessment.

“Frequency of the periodic reviews should be determined by the risk of the customer and documented appropriately. FIs should also review their PEP database frequently.”

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“Regularly, transactions and account activities should be monitored and scrutinized for money laundering/terrorist financing/ proliferation financing risks,” the circular reads.

The apex bank further explained that those entrusted with prominent public positions in Nigeria are categorized as domestic PEPs, while those holding prominent public positions in any other foreign jurisdiction were referred to as foreign PEPs.

It stated that domestic PEPs were rated highly vulnerable to financial risks owing to the level of corruption in Nigeria, and by default, people in this category were considered high risk.

On the other hand, foreign PEPs with briefs in international organizations should be categorized based on the level of risk as assessed by financial institutions, the CBN added.

It also ordered banks to ensure that customer due diligence is continually carried out even after a relationship has been established with the customer.

The apex bank said, “The behaviour of the customer, transactions, and accounts should be in line with the expected level of activity. Ongoing monitoring is crucial as a customer risk profile may change over time.”

Emphasizing the essence of the directive, the CBN said PEPs posed a high risk of money laundering, financing of terrorism, and proliferation financing due to the tendency for the individuals holding such positions to misuse their power and influence for personal gain or advantage to themselves, close family members and associates.

“Such individuals may also use their families or close associates to conceal illicit funds and assets.

“In addition, they may also seek to use their power and influence to gain representation and/or access to or control of, legal entities for similar purposes,” It added.