BDCs Back Sanctions for Operators Accused of Terror Financing

Following allegations linking some Bureau De Change (BDC) operators to terrorism financing, the Association of Bureau De Change Operators of Nigeria (ABCON) has expressed support for sanctions against any operator found culpable, while reiterating its commitment to safeguarding the integrity of the foreign exchange market.

The stance follows the recent designation by the United States government of certain individuals and entities, including some Nigerian-linked BDC operators, for allegedly facilitating financial activities connected to terrorist organisations.

In a statement issued on Tuesday, the United States Department of State identified a Nigerian foreign exchange operator among individuals and entities allegedly involved in financing activities linked to the Islamic State and its affiliates operating across Europe, the Middle East and West Africa.

One of the individuals named, Mukhtar Adamu, also known as Muhammad Mukhtar, was alleged to have links with the Islamic State West Africa Province (ISWAP). According to the U.S. authorities, Adamu operates Generation Currency Bureau De Change Limited in Lagos, Manhattan Bureau De Change Limited in Kano, and Nine-To-Nine Exchange Bureau De Change Limited in Lagos.

Reacting to the development, ABCON said it strongly condemns terrorism and all forms of terrorism financing, stressing that the sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) should not be construed as an indictment of the entire BDC industry.

Speaking with LEADERSHIP, the association maintained that the overwhelming majority of licensed BDC operators conduct their businesses in compliance with extant Nigerian laws and regulatory requirements.

According to ABCON, “Recent actions by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) against certain individuals and entities allegedly involved in facilitating terrorist financing underscore the need for enhanced vigilance across all financial sectors, including foreign exchange markets.”

The association emphasised that sanctions are targeted at specific individuals or entities based on intelligence and investigations and, therefore, compliant operators should not be unfairly judged by the actions of a few bad actors.

“ABCON remains committed to preserving the integrity, transparency and credibility of Nigeria’s foreign exchange market. We support all lawful efforts to identify, investigate and sanction any individual or institution involved in terrorism financing,” the association stated.

ABCON further disclosed that it is working closely with the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), security agencies and other stakeholders to strengthen anti-money laundering and counter-terrorism financing safeguards within the sector.

“The association will continue to work closely with the CBN, NFIU, security agencies and international partners to strengthen AML/CFT compliance and ensure that the Bureau De Change sector is not used as a channel for illicit financial activities,” it added.

As part of efforts to curb illicit financial flows, ABCON said operators have intensified Know-Your-Customer (KYC) procedures, including the verification of customer identities and beneficial ownership information, while applying enhanced due diligence measures to high-risk transactions.

The association also noted that operators are screening customers and counterparties against Nigerian sanctions lists, OFAC sanctions lists and relevant United Nations sanctions lists, with immediate reporting and freezing actions undertaken where required by law.

In addition, ABCON said suspicious transaction reporting mechanisms have been strengthened through the prompt filing of Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) to the NFIU, alongside increased monitoring of unusual transaction patterns.

The association added that operators are investing in technology-driven compliance systems, including automated anti-money laundering and counter-terrorism financing monitoring platforms, risk-based compliance frameworks, improved record-keeping systems and enhanced transaction traceability mechanisms.