According to Central Bank of Nigeria (CBN) Economic report, majority of the commercial banks in Nigeria fail to meet a number of compliance requirements specified by it, to prevent and track corruption plus terrorism financing.

It was learnt that many banks failed to conduct enhanced due diligence, a major compliance requirement on some high-risk customers. Besides, the collation and reporting of foreign currency transactions and suspicious transactions were not fully automated in some banks.

The CBN report showed that the apex bank conducted an anti-money laundering/combating terrorism financing compliance examination of 25 reporting banks.

The examination was guided by the statutory provisions of the Money Laundering Prohibition Act, 2011 (as amended), the CBN’s AML/CFT Regulations, 2013 and recommendations of the Financial Action Task Force.

However, the examination showed a number of gaps in customer due diligence and anti-money laundering reporting software among others.

The report also showed that the first of the bi-annual review of the foreign exchange activities of 25 banks (21 commercial and four merchant banks) was conducted in April, last year, to ascertain the level of compliance with extant foreign exchange laws and regulations.

The review covered foreign exchange operations for the period, October 1, 2016 to March 31, 2017. According to the CBN, major infractions observed included non-compliance with regulations, such as the concessionary rates specifically provided for utilisation of funds sourced from the Secondary Market Intervention Sales foreign exchange window; and non-issuance of certificates of capital importation to beneficiaries within the allowable time of 24 hours post receipt of funds.

Dangers of terrorism financing in Nigeria and West Africa

The Strategic Plan 2016 to 2020, of the Inter-governmental Action Group against Money Laundering in West Africa, stated that some of the funds that support the violent extremism being experienced in some parts of the region either originate from West Africa or traverse it.

It said the escalation of terrorist acts being committed by Boko Haram, Ansar Dine, Al Qaeda in the Maghreb (AQIM) and the Movement for Oneness and Jihad in West Africa (MUJAO), has attracted regional and global concern.

In September 2015, Amnesty International (AI) reported that from January 2015, Boko Haram had killed more than 3,500 civilians across four countries (Nigeria, Cameroun, Chad and Niger).

The AI report said: “The resilience of the terrorist networks suggests that they have been innovative in sustaining themselves, using various methods and techniques to raise, move and utilize funds in order to carry out terrorist activities. Smuggling of goods has been found to be central to the financing of terrorist activities.”

The Inter-governmental Action Group recognises that anti-money laundering/combating terrorism measures are always implemented in an environment where other priorities compete for the attention and resources of authorities; therefore, harnessing and mobilizing resources coupled with efficient utilization of such resources is critical.

https://www.financialdigest.com.ng/blog/2018/05/03/how-nigerian-banks-facilitate-corruption-and-terrorism-financing/

OP you are totally right.