…Apex Bank Issues Firm Directive Amid Heightened Global Scrutiny on Financial Crime
The Central Bank of Nigeria (CBN) has delivered a strong message to all financial institutions under its purview, including banks, payment service banks, and burgeoning fintech companies: tighten your sanctions compliance frameworks or brace for potential enforcement actions. In a circular dated April 17, 2025, and signed by Amonia Opusunju on behalf of the Director of the Compliance Department, the apex bank unequivocally reminded these entities of their mandatory obligation to adhere rigorously to both domestic and international sanctions lists.
These crucial lists encompass the globally recognized United Nations Consolidated Sanctions List, the Nigerian Sanctions List as mandated by the Terrorism (Prevention and Prohibition) Act of 2022, and the CBN’s specific guidelines targeting financial sanctions related to terrorism and its financing. The CBN emphasized that maintaining a robust and dynamically responsive sanctions compliance structure is not merely a suggestion but a fundamental requirement for all financial players operating within Nigeria’s economic landscape.
This robust framework necessitates the swift identification and immediate reaction to any updates or changes across all applicable sanctions lists. Furthermore, financial institutions are expected to proactively prevent their systems and platforms from being utilized for any transactions involving individuals or entities designated on these lists. To achieve this, the CBN mandates the implementation of real-time screening processes for customers, all transactional activities, and the identification of beneficial owners.
The CBN’s circular explicitly outlined these expectations, stating, “Financial Institutions are required to maintain a robust and dynamic sanctions compliance framework that enables them to Identify and respond promptly to updates or changes across all applicable sanctions lists; Prevent the use of their systems and platforms for transactions involving designated individuals or entities; Conduct real-time screening of customers, transactions, and beneficial owners; and File appropriate reports with the Nigerian Financial Intelligence Unit and notify the CBN, where necessary.” The directive also clearly stipulates the necessity for institutions to file pertinent reports with the Nigerian Financial Intelligence Unit (NFIU) and to promptly notify the CBN as required.
The apex bank did not mince words regarding the consequences of non-compliance, explicitly warning that failure to adhere to these directives could trigger enforcement actions and regulatory sanctions. The circular further stressed the imperative for financial institutions to regularly review and align the effectiveness of their sanctions compliance programs with evolving legal and regulatory requirements and expectations.
This decisive directive from the CBN arrives at a critical juncture, marked by escalating global scrutiny concerning financial crimes, particularly in the realms of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. Nigeria, currently engaged in concerted efforts to enhance its standing with international watchdogs such as the Financial Action Task Force (FATF), has been progressively intensifying its oversight across the entire financial sector.
The CBN’s forceful reminder also underscores the critical need for fintech companies and other non-traditional financial service providers to seamlessly integrate robust compliance mechanisms into their innovative platforms, especially given the rapid pace of technological advancement and expansion within the sector. The regulator unequivocally stated that this directive should be treated with the utmost seriousness by all institutions under its regulatory umbrella, emphasizing that compliance is not a discretionary matter but a mandatory obligation.
The CBN urged all financial operators to proactively align their operations with all applicable laws and CBN directives to avert potential penalties. This latest move strongly signals an impending wave of heightened regulatory enforcement, compelling banks and fintech companies to significantly step up their investments in sophisticated compliance tools. These investments are expected to include advanced sanctions screening technologies, comprehensive transaction monitoring systems, and robust reporting mechanisms to ensure full adherence to the CBN’s stringent requirements.
