CBN Warns Banks Of High-risk Transactions with Russia, Korea, Others

The Central Bank of Nigeria (CBN) has issued a warning to Deposit Money Banks (DMBs) and Other Financial Institutions (OFIs) in the country to exercise caution when conducting transactions with businesses and individuals in certain countries. The countries specified by the CBN are the Russian Federation, the Democratic People’s Republic of Korea, Iran, and Cameroon.

The cautionary message from the CBN is in response to these countries being placed on the high-risk jurisdictions list by the Financial Action Task Force (FATF), an international body responsible for combating money laundering and terrorist financing.

The CBN’s warning was communicated through a circular, with reference number FPR/AML/PUB/BOF/001/029, issued by CBN director of financial policy and regulation, Mr. Chibuzo Efobi.

The FATF sets global standards aimed at preventing illegal financial activities and the associated societal harm. Apart from the aforementioned countries, other nations on the list include the Democratic People’s Republic of Korea, Croatia, Vietnam, and Myanmar.

The CBN’s decision to issue this warning is based on the resolutions reached at a recent plenary session of the FATF, held last month.

The circular states, “Banks and other Financial Institutions should take note of the outcomes of the Financial Action Task Force Plenary conducted from June 21-23, 3023, and the subsequent addition of Cameroon, Croatia, and Vietnam to the list of jurisdictions under ‘Increased Monitoring.”

It further emphasised that the Democratic People’s Republic of Korea, Iran, and Myanmar remain on the high-risk jurisdictions list and are subject to a ‘Call for Action.’

In light of these developments, the CBN directs financial institutions to implement enhanced due diligence measures and, in severe cases, consider implementing countermeasures to protect the international financial system.

The circular also reminds financial institutions that the suspension of the Russian Federation from the FATF remains in effect.

Financial institutions are urged to stay vigilant and alert to potential emerging risks resulting from attempts to bypass measures designed to safeguard the international financial system.

Given these new developments, financial institutions are instructed to take note of all additions to jurisdictions under ‘Increased Monitoring’ and high-risk jurisdictions subject to a ‘Call-for-Action’ and take necessary steps to effectively mitigate these risks.