The Central Bank of Nigeria (CBN) has instructed banks and other financial institutions to ensure regular monitoring and periodic review of accounts belonging to Politically Exposed Persons (PEPs) in Nigeria.
This was contained in a circular to banks and other institution, titled ‘Guidance notes on Politically Exposed Persons’ and signed by the Director, Financial Policy and Regulation Department, Chibuzor Efobi.
The apex bank said the frequency of such reviews should be determined by the risk of the customer and documented appropriately.
The circular read, “PEP accounts should be subject to periodic reviews as may be determined by the FI in line with risk assessment.
“Frequency of the periodic reviews should be determined by the risk of the customer and documented appropriately. FIs should also review their PEP database frequently.
“On a regular basis, transactions and account activities should be monitored and scrutinised for money laundering/terrorist financing/ proliferation financing risks.”
The apex bank went on to say that people who occupy significant public posts in Nigeria are classified as domestic PEPs, while people who hold prominent public positions in any other foreign country are known as foreign PEPs.
It also ordered banks to ensure that customer due diligence is continually carried out even after a relationship has been established with the customer.
“The behaviour of the customer, transactions and accounts should be in line with the expected level of activity. Ongoing monitoring is crucial as a customer risk profile may change over time.”
The CBN emphasized the directive’s core principles by stating that PEPs posed a high risk of money laundering, financing terrorism, and financing nuclear proliferation due to the propensity of those in such positions to abuse their influence and power for the benefit of themselves, their immediate family, and other associates.