Financial Action Task Force set to visit Nigeria in September

The Financial Action Task Force (FATF) would be visiting Nigeria in September. The global body that sets standard for Anti-money Laundering and Counter Financing of Terrorism (AML/CFT) efforts will assess banks and other financial institutions compliance with the AML/CFT measures. Consequently, the Nigerian Bureaux de Change (BDCS) are willing and ready to receive and assist the team make a success of the exercise.

The BDCS sector has through long years of training and guidance been strengthened to understand the gains of compliance with the AML/CFT rules.

Bureaux De Change (BDC) operators are conversant with the threats and dangers posed by Money Laundering and Terrorist Financing (ML/TF) in Nigeria, Africa and globally. The operators have therefore adopted concerted strategies to tackle the menace.

The current level of awareness on the ills of ML/TF followed long years of training and capacity building provided by the Association of Bureaux De Change Operators of Nigeria (ABCON) under the leadership of Aminu Gwadabe. In many other times, the trainings are done by ABCON in collaboration with regulatory agencies and key government parastatals.

With over $30.4 billion being ferried out of Africa annually, ABCON is intensifying its commitment to fighting money laundering and terrorist financing by ensuring that its members comply with regulations in doing their business.

Gwadabe said the group was already equipping over 4,500 BDCS with the right technology and skills to tackle illicit financial flows within the country.

He said the BDCS meet regularly with regulators, government agencies/officials and experts to analyse, monitor and identify strategies for the effective implementation of AntiMoney Laundering/combating the Financing of Terrorism (AML/CFT) measures.

The ABCON president said the BDCS will next month, welcome the FATF Mutual Evaluation team to Nigeria. The FATF assessment, he explained, was designed to evaluate the implementation and effectiveness of the laws, regulations or other measures required to ascertain the effectiveness of the AML/CFT regime.

The Mutual Evaluation will equally provide information on the progress made by Nigeria in meeting its obligations towards the FATF Recommendations.

ABCON has over the years established itself as a key player in the bureau de change (BDC) industry, and has also made several commitments and sacrifices to ensure that the sector continues to thrive and its members follow global best practices in the retail of foreign exchange to end users.

FATF mutual evaluation and BDCS’ preparations

Gwadabe disclosed that ahead of the FATF Team visit in September, the ABCON, in collaboration with the Central Bank of Nigeria (CBN) is organising a sensitisation workshop for over 4,500 licenced BDCS in Nigeria. The workshop will hold in the six geopolitical zones.

Like other previous evaluations for Nigeria, the FATF team will carry out checks at the branches of selected banks and BDCS across the country, adding that compliance at the airports and land borders may also come under their scrutiny.

Gwadabe said Nigeria, which has been one of the regional champions mentoring other member states in the development of their AML/CFT systems, has largely addressed its action plan by enacting legislation to criminalise money laundering and terrorist financing. The country is also implementing procedures to identify and freeze terrorist assets and ensuring that customer due diligence requirements apply to all financial instructions.

BDCS’ case of compliance, digitisation of operations

Gwadabe said BDCS have met a number of compliance requirements specified by FATF and local regulators. The BDCS have conducted enhanced due diligence, a major compliance requirement on some highrisk customers. The collation and reporting of foreign currency transactions and suspicious transactions by BDCS are now fully automated.

The ABCON had in February, launched its Live Run Automation Portal in Lagos. The technology automates all BDC Operations with those of Nigeria Inter-bank Settlement System (NIBSS), Nigeria Financial Intelligence Unit (NFIU) and the Central Bank of Nigeria (CBN) to improve the level of compliance of the BDCS with set regulations.

The platform allows BDCS send their reports online real time, thereby removing the challenge of manual rendition of reports that has been confronting operators for decades. The project is also boosting the perception towards BDCS in Nigeria especially in the eyes of international investors.

Gwadabe said the world is going digital, and BDC operators under his leadership are committed to staying ahead of the competition by deploying time-tested technology to deliver effective services to customers and ensure compliance.

He said the Live Run portal has enhanced BDCS compliance with set regulations and promoted market integrity.

According to him, the portal has sustained transparent transactions in the BDC corridor, boost the morale of its members and ensure their continuous operations.

The ABCON chief said the group had fully upgraded its Information Communication Technology (ICT) platforms, to achieve full digitisation of BDCS operations in line with its goal of sustaining transparent operation and prompt rendition of weekly returns to regulatory agencies.

He added that the ABCON fully aligns with the statutory provisions of the Money Laundering Prohibition Act, 2011 (as amended), the CBN’S AML/CFT Regulations, 2013 and recommendations of the FATF.

Why anti-money laundering war must go on

Gwadabe said that the sorry state of public institutions within the ECOWAS region was disturbing. In many public schools, students learn sitting on the floors; hospitals lack basic drugs, while the road networks are death traps. These societal ills thrive where corruption and illicit financial flows are rampant.

He said that public institutions in ECOWAS region have suffered immensely from the corruption going on in public and private sectors.

He said that ABCON was aware of the growing concerns over illicit financial flows (IFFS) from West African economies, and the need to tackle them by key stakeholders within the region.

He acknowledged the Inter-governmental Action Group against Money Laundering in West Africa (GIABA’S) 2016 – 2020 Strategic Plan, which showed that the Global Financial Integrity (GFI), the World Bank, the African Development Bank (AFDB), the Africa Progress Panel and the African Union’s High Level Panel on Illicit Financial Flows from Africa all paint a grim profile of the problem.

A joint study conducted by the GFI and the AFDB showed that between 2000 and 2009, about $30.4 billion was illicitly transferred out of Africa each year. Over a longer period of 30 years, calculated from 1980, the resource drain was between $1.2 and $1.3 trillion. Outflows from West and Central Africa stood at (37 per cent), followed by North Africa (31 per cent) and Southern Africa (27 per cent). The IFFS are derived from various predicate offences of money laundering.

The ABCON Foreign Exchange Retailers Institute has also been proposed and will soon be floated by the leadership of the association. The institute falls within the constitutional mandate of ABCON and will be focused on bridging the knowledge gap among operators and promoting capacity building for global competitiveness.

“We therefore urge the Federal Government to mandate relevant authorities such as the Central Bank of Nigeria (can), Corporate Affairs Commission (CAC), Federal Ministry of Education and Federal Ministry of Justice to grant the institute the necessary approval to enable it commence operation,” Gwadabe said.

ABCON, severally, organised trainings for its members, and at other times, partnered NFIU and the EFCC to build capacity for operators.

They have educated BDC operators on how they can help in tackling money laundering, terrorist financing and the benefits of keeping records of their transactions.

The anti-money laundering training that ABCON organised with NFIU and EFCC in Lagos was meant to familiarise the BDCS with the process of money laundering — the criminal business used to disguise the true origin and ownership of illegal cash — and the laws that make it a crime.

Speaking during the sensitisation programme against money laundering and terrorism financing campaign at MM2, Lagos, which was attended by many BDC operators, the Acting Chairman, EFCC, Ibrahim Magu, called for continuous sensitisation on issues around AML/CFT reporting to improve transparency in BDCS operations.

He said the EFCC would continue to campaign for financial integrity and transparency in BDCS’ operations. Other stakeholders at the event also spoke on the use of BDCS for illicit political transactions, illegal border cash evacuation, reporting of suspicious transactions, fraud accounts transactions and cash dollar deposits on domiciliary accounts.

The NFIU/EFCC/ABCON goal is to ensure that BDCS are not used to launder funds by Politically Exposed Persons (PEPS). Their target was also to raise BDCS’ compliance with the AML/CFT for Banks and Other Financial Institutions in Nigeria, Regulations 2013.

These capacity-building workshops have helped BDCS to understand how to raise and submit both the Suspicious Transaction Reports (STRS) and Currency Transaction Reports (CTRS) to regulators.

ABCON has continued to ensure that BDCS file their reports as and at when due. They file reports on all transactions from N10 million for companies and N5 million for individuals. The reports are sent on weekly basis NFIU, CBN and EFCC.

The BDCS also do customers’ Know Your Customer (KYC) and due diligence reports.

Daily Transaction Returns (DTR) gives details of the total sales made for the day by the BDC and comes in as DTR 202, DTR 217, DTR 305 and DTR 315.

The DTR 217 return gives the information of the customers of whom the forex was sold to. Information given includes the name, the international Passport number, Bank Verification Number, address, TIN number, email address among others while DTR 305 provides details of the customers as well their destination and reason for the purchase of forex. The total amount of forex sold to them is also mentioned with the transaction date.

The DTR 315 tells BDCS’ opening balance, amount purchased in forex, the equivalent in naira and the rate of purchase, amount sold in forex, the equivalent in naira and the selling rate as well as the closing balance.

The Monthly Transaction Returns (MTR) also known as the MTR returns is a compilation of the daily transactions and is sent to the CBN Trade and Exchange Department. It also comes in four parts MTR202, MTR217, MTR 305 and MTR 315. It is pertinent to note that these returns as described above are rendered in soft copies (electronically) and also hardcopies to the CBN.

Gwadabe said ABCON’S primary goal was to ensure that its members comply with all regulations and that this would be sustained. We equally have internal mechanisms that are always deployed to punish erring operators.

“We want to continually ensure that BDCS provide liquidity at the retail end of the market and also share intelligent information with government, whenever we have such information. We have also come to realise that knowledge of compliance makes the job of security operative easier,” he said.

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