CBN to unearth hidden account, business owners

• Published date: 16 January 2023
• Publication title: Nigeria - The Nation

BANKS and other financial institutions are required to identify, verify and keep adequate records of the real beneficial owners of business accounts and other special purpose vehicles.

This was the crux of a new guideline released at the weekend by the Central Bank of Nigeria (CBN). The new guideline on identification of ultimate beneficial ownership of legal persons and legal arrangements takes immediate effect.

The apex bank stated that the guideline was necessitated by 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.

According to the CBN, the new guideline strengthens Nigeria's position in line with the Financial Action Task Force's (FATF's) 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.

'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,' CBN stated.

The apex bank outlined that the guideline, which draws from global standards, was issued to financial institutions (FIs) under its purview as defined under the Central Bank of Nigeria (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022, (CBN AML/CFT/CPF Regulations).

According to the apex bank, considering the pivotal role that FIs play in the financial system to prevent abuse of the Nigerian financial system from laundering of the proceed of crime and financing of terrorism, it is important that they are guided in identifying the beneficial owners of legal persons and arrangements.

The apex bank described a beneficial owner (BO) as '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''.

'In line with FATF, consideration must be given to the natural person(s) who have ultimate (actual) ownership...