The Central Bank of Nigeria Guidelines on Targeted Financial Sanctions (TFS) related to Proliferation Financing (PF) were published in November 2022 and were made in accordance with United Nations Security Council Resolutions, the recommendations of the Financial Action Task Force (FATF) and Terrorism. Prevention and Prohibition Act of 2022.
This article will focus on dealing with issues of: –
- The definition of Financing of Proliferation.
- The scope of the CBN Guidelines.
- The objectives of the CBN Guidelines on the Financing of Proliferation.
- The nature of TFS applicable to Proliferation Financing.
- Obligations imposed under these guidelines.
- Red flag indicators under the guidelines.
What is the scope of the CBN Guidelines in Proliferation Financing?
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The Guidelines apply to all Financial Institutions in Nigeria licensed by the CBN.
What is it so the objectives of the CBN Guidelines?
The objectives of the Guidelines are: –
- Help FIs comply with the requirements of existing laws and regulations related to Proliferation Financing.
- The provision of instructions to FIs on the implementation of Targeted Financial Sanctions (TFS) to prevent and suppress Proliferation Financing.
- The provision of instructions to FIs on the implementation of TFS to prevent and suppress Proliferation Financing in accordance with the relevant United Nations Security Council Resolutions.
What exactly is Proliferation Financing What explained in the Guidelines?
A general description of proliferation financing involves the act of raising funds, moving or making available funds, other assets or economic resources or financing in whole or in part to persons or entities for the purpose of manufacturing, acquiring, possessing, storing, storing , developing, transporting, selling, supplying, transferring, importing, selling, supplying, transferring, importing, exporting, shipping, transhipment, provision of technical training, advice, service, brokerage or assistance relating to or using in a non-legitimate capacity any of the following :-
- Nuclear weapons
- Chemical weapons
- Biological weapons
- Materials related to nuclear, chemical or biological weapons that are prohibited by current laws and regulations.
Financing of proliferation is generally carried out in 3 stages which are:-
– Mask the funds raised.
– The acquisition of materials and technology.
In what forms is it so pointed Financial sanctions (TFS) effected in cases of Proliferation Financing?
TFS under the CBN Guidelines generally involves the use of measures such as asset freezes, blocking, and transaction refusals by individuals to prevent, suppress, and disrupt the proliferation of Weapons of Mass Destruction (WMD) and their financing online. with the sanctions imposed by the UN. Security Council through its resolutions.
PF-related TFS are applicable to persons and/or entities designated by the UN Security Council or the relevant committees created by it.
What is it so the criteria for Qualification What a “designated person” under the CBN Guidelines?
The criteria to qualify as a designee under the CBN Guidelines were established by the UN and include:
– Any individual, person, or entity that participates in or provides support to proliferation-sensitive activities and programs.
– Any individual or entity owned or controlled by designated persons or entities.
– Persons or entities that assist designated persons or entities to evade sanctions.
What is it so the regulator obligations tax in IF under the CBN Proliferation Financing Guidelines?
The obligations imposed on FIs are the same as those contained in the relevant provisions on compliance obligations contained in the Terrorism Prevention and Prohibition Act (TPPA) 2022.
What categories of funds are they? subject a freezing obligations under the CBN FP Guidelines?
The following categories of funds are among those subject to freezing measures under the CBN Guidelines on the Financing of Proliferation:-
- Cash, checks or money claims.
- Debts and debt obligations, including business debts.
- Insurance and Reinsurance Policies.
- Credit letters.
What is it so IF required a do under the CBN Guidelines about the receipt of additional money in frozen accounts that usually make up legitimate either in a hurry Profits?
With respect to the receipt of funds that would be classified as:-
– Payments due under contracts, agreements or obligations;
– Interest or other earnings;
FIs are required to file a report of receipt of such funds with the Nigerian Financial Intelligence Unit (NFIU) and, where there is no existing account for receipt of such additional funds, FIs are required to create an escrow account and inform the Attorney-General of the Federation so that appropriate additional measures can be taken.
What is it so some of the identifiers classified What “red flag indicators” under the CBN Guidelines in Proliferation Financing?
Red flag indicators under the Guidelines are categorized as red flag customers, red flag transactions and red flag jurisdictions with their descriptions as follows:
Red Flag Customers
– Having links with a foreign country of proliferation concern or with a neighboring or sympathetic country.
– A military or intelligence body connected to a jurisdiction with a high risk of proliferation.
– When the client’s activity does not match his commercial profile.
Red Flag Proceedings
– Involve an individual or entity in a foreign country of Proliferation concern.
Red Flag Jurisdictions
– Having the presence of an industry that produces items sensitive to proliferation or military items.