Citing provisions of the existing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws, which require financial institutions to unveil the beneficial owners of legal persons and legal arrangements, the Central Bank of Nigeria (CBN) has issued a guidance note on “Ultimate beneficial ownership of legal persons and legal arrangements.” In a circular to Deposit Money Banks (DMBs) and other financial institutions posted on its website yesterday, the CBN said it developed the guidance: “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.”
It also noted that “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.” According to the guidance note, “Beneficial owner (BO) refers to the natural person(s), who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.
“It also includes those persons who exercise ultimate effective control over a legal person or legal arrangement.” It further stated that in assessing Beneficial Owners (BOs), financial institutions should apply a risk-based approach in the identification and verification of BOs, adding that they should conduct enhanced Customer Due Diligence (CDD) on BOs, “that pose higher risk and file a suspicious transaction report with the Nigerian Financial Intelligence Unit (NFIU) if there are reasonable reasons to suspect money laundering or terrorism financing.” In addition, it said: “Financial institutions should have effective systems to determine whether a beneficial owner is a Politically Exposed Person (PEP) or a family member or close associate of PEP.
