The Central Bank of Nigeria has advised all financial institutions to be abreast with emerging risks and other developments while taking proactive steps to address the new and emerging money laundering and terrorism financing.
The banking sector regulator noted that changes in the trends of business activities and financial transactions precipitated by COVID-19 pandemic had inadvertently led to increase in financial crimes globally.
The CBN stated this in a circular titled: “Administrative letters to all banks and other financial institutions,” that was signed by its Director, Financial Policy and Regulation Department, J. M. Gana.
Some of the measures it advised included investing in robust data mining and artificial intelligence software to monitor transactions; report suspicious transactions and update alerts protocol in their Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations.
It explained: “The Nigerian Financial lntelligence Unit (NFIU), as the central repository of suspicious transactions and other financial information, had issued an Advisory based on comprehensive analysis of STRs and other information available to it. The Advisory identified increased financial crimes such as, cybercrimes, frauds, counterfeiting and substandard goods; diversion of public Ends and misuse of Non-Governmental Organisations (NGOs).”
Some vulnerabilities and red flags highlighted in the advisory also included e-Commerce merchant with little or no history or internet presence, suddenly receiving multiple payments from unrelated third parties; individual(s) suddenly receiving multiple payment from unrelated third parties; and customer(s) suddenly engaging in the supply or purchase of medical supplies and payment for goods and services associated with known brands, yet the beneficiary is an individual is not a corporate.
It also stated that banks should expect to see more transactions for medical supplies, equipment and medication; payment for goods or services associated with a known brand, yet beneficiary is an individual not a company; unusual volume of transactions; large and frequent cash withdrawals and deposits as well as immediate disbursement of deposited funds to multiple accounts.
“The account signatory also a public/civil servant. Funds transferred from government account to personal account. Non-profit organisatons suddenly receiving donations in favor of Covid-19 patients or victims.
“Customers’ account with like or no activity suddenly receiving funds from one or more unrelated third parties only for the funds to be transferred to one or more unrelated thirds parties.”
The central bank also warned banks that NGOs under the guise of paying COVID-19 victims could actually be paying members of a criminal gang or facilitating terrorist financing.