SEC orders asset freeze of 13 capital market entities for terrorism financing 

Nigeria’s Securities and Exchange Commission (SEC) has ordered an immediate asset freeze of the 13 new alleged terrorism-linked entities across the capital market.

The Commission anchored its directive on provisions of the Terrorism (Prevention and Prohibition) Act, 2022, which mandates the immediate freezing of all funds, assets, and economic resources linked to the named persons and organisations without prior notice.

A directive titled ‘Commission’s sweeping compliance directive issued to capital market operators’, noted that the move was after the 10 individuals and three entities were designated and blacklisted on the Nigeria Sanctions List by the Nigeria Sanctions Committee.

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The SEC stated that all Capital Market Operators (CMOs) and stakeholders have been notified that, pursuant to section 49 of the Terrorism (Prevention and Prohibition) Act, 2022, the Nigeria Sanctions Committee has approved the addition of entries and entities subject to asset freeze, travel ban, and arms embargo.

“The directive to free accounts and halt all transactions with the flagged entities is binding on all capital market operators and stakeholders, with strict reporting and compliance obligations, including: immediate identification and freezing of all assets linked to designated individuals and entities without prior notification. Mandatory reporting of frozen assets and attempted transactions to the Nigeria Sanctions Committee Secretariat.”

Details accompanying the designation reveal that several of the individuals were convicted by the Abu Dhabi Federal Court of Appeal in April 2019 for terrorism financing activities linked to Boko Haram.

The offences largely involved the alleged collection of funds in Dubai and transferring them to Nigeria to support terrorist operations. Sentences ranged from 10 years imprisonment to life sentences, underscoring the severity of the offences.

“This highlights a pattern where corporate vehicles are used as channels for financial flows, reinforcing the need for heightened scrutiny of business entities within the financial system.

“The SEC also emphasized that the asset-freezing mechanism is preventive rather than punitive, designed to disrupt financial support systems for terrorism before funds can be deployed.

“The implications for non-compliance are severe, including both civil and criminal liabilities, as well as reputational damage for institutions found wanting.

Additionally, the directive extends beyond traditional financial institutions to include Designated Non-Financial Businesses and Professions (DNFBPs), signalling a more comprehensive enforcement approach across Nigeria’s financial ecosystem.”

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The latest alert, SEC noted, is in line with its zero-tolerance enforcement of anti-money laundering and counter-terrorism financing (AML/CFT) rules within Nigeria’s capital market, with emphasis on real-time compliance, detailed reporting, and continuous transaction monitoring.

“For market operators, the trading systems must be capable of rapid name screening, asset tracing, and reporting, while compliance teams are expected to act without delay or prior notice to affected clients.”

“It has to be noted that failure to comply not only exposes firms to regulatory sanctions but also risks damaging their credibility in both domestic and international markets”, the statement added.