CBN Tightens Monitoring of Banks Over Terrorism Financing

The Central Bank of Nigeria (CBN) has strengthened its supervision of banks and other financial institutions to prevent their systems from being used for terrorism financing and other illegal financial activities.

The apex bank said terrorism financing supervision has become one of its current priorities as part of efforts to protect Nigeria’s financial system from abuse by criminal networks.

The new supervisory approach will focus on how financial institutions identify and manage terrorism financing risks, monitor transactions for suspicious activities, implement targeted financial sanctions and report transactions linked to terrorism financing.

The CBN said it would apply a risk-based approach, giving closer attention to financial institutions considered more exposed to terrorism financing risks. The supervision will involve both on-site inspections and off-site monitoring to assess compliance with existing Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing regulations.

The move is also expected to support Nigeria’s cooperation with domestic and international bodies involved in combating terrorism financing, proliferation financing and other threats to financial integrity.

The development follows the recent designation of six individuals and three entities as terrorist financiers by the Nigeria Sanctions Committee under the Terrorism Prevention and Prohibition Act, 2022.

Those designated include Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim. The authorities linked the individuals to terrorism financing, material support and financial transactions involving the Islamic State West Africa Province (ISWAP).

The three designated entities are Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau De Change. The entities were accused of facilitating or channeling funds connected to the ISWAP financing network in Okene.

Following the designations, financial institutions and other operators were directed to immediately identify and freeze funds, assets and other economic resources belonging to the listed individuals and entities without prior notice.

They were also instructed to report any frozen assets and related information to the Secretariat of the Nigeria Sanctions Committee as part of measures to disrupt terrorism financing networks.