Last week, the United Kingdom arm of Guaranty Trust Bank (GTBank) agreed to pay a penalty sum of £7.671 million which translates to about N4.28 billion to the UK’s Kingdom’s financial services regulator, Financial Conduct Authority (FCA), for Anti Money Laundering (AML) contraventions by the bank between 2014 and 2019.
The bank, in a statement, had explained that the FCA’s investigation focused on GTBank UK’s AML controls and steps taken by GTBank UK to remediate these to ensure they operated in line with the relevant requirements.
Thus, the managing director of GTBank UK, Mr. Gbenga Alade, said the bank has stepped up its AML controls to mitigate a repeat.
“As a responsible financial services institution that is committed to best practices, GTBank UK takes its AML obligations extremely seriously. We note with sincere regret the FCA’s findings regarding AML control gaps in our operations in the past and we are very sorry for this.
“Whilst there was no direct customer impairment arising from the period under review [and the FCA’s findings do not include any instances of suspected money laundering], we have since reinforced our AML control framework and implemented changes in our AML processes in line with best practice with a view to ensuring that the highest standards are maintained in our operations,” Alade stated.
Although the bank assured that it had stepped up its game in combating AML as well as terrorism financing, the Central Bank of Nigeria had, last weekend, issued fresh guidelines that would ensure that banks unveil beneficial owners of legal arrangements in line with provisions of extant AML/CTF laws and regulations.
The latest guideline, which was signed by the CBN’s director, Financial Policy and Regulation department, Chibuzor Efobi, is on ‘Ultimate Beneficial Ownership of Legal Persons and Legal Arrangements.’
According to the apex bank, its regulations on AML/CFT and countering proliferating financing of weapons of mass destruction in financial institutions requires banks to understand the structure of legal persons and legal arrangements and undertake customer due diligence measures to mitigate the risks thereof.
The latest guideline noted that, given the growing use of corporate vehicles, such as companies, trusts, foundations and other types of legal persons and legal arrangements by criminals to cover up and convert the proceeds of crime, global standards Financial Action Task Force (FATF) demand that countries ‘ensure that adequate, accurate and timely information on’ beneficial ownership is accessible to check corporate vehicles from being abused in the financial system.
Thus, it said, legal persons and legal arrangements are susceptible to abuse for money laundering and terrorist financing.
“Hence, the need to identify, verify and have credible and reliable information on the legal and beneficial owners of all corporate vehicles and entities; to ensure that such information is available and easily accessible in a timely manner by competent authorities,” it noted.
With the latest guideline, financial institutions, it stressed, would be able to distinguish between legal ownership and effective control, as the person who has legal ownership may not necessarily be the same person exercising control.
The guideline defined a beneficial owner as anyone who ultimately owns or holds at least five per cent of the issued shares in the legal person either directly or indirectly; controls a customer and/or the natural person (but not limited to) who exercises at least five per cent of the voting rights in the legal person either directly or indirectly or holds a right directly or indirectly, to appoint or remove majority of the directors or similar positions of the legal person.
A beneficial owner, it said, can also be a person on whose behalf a transaction is being conducted; and/or who exercise ultimate effective control over a legal person or legal arrangement – exercise significant influence or control, directly or indirectly, over the legal person.
Financial institutions are also expected to put into consideration relevant relationships which includes senior management, authorized signatories, persons with voting rights, nominee directors, partners, office holders, settlors, trustees and beneficiaries, persons having power of attorney over the entity amongst others in their AML/CFT control mechanisms.
Similarly, they are expected to carry out necessary customer due diligence (CDD) particularly at the on-boarding stage, based on the risk assessment of the customer when identifying and verifying beneficial owners.
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