BANK COMPLIANCE EXAMINATION
- Your responsibilities and what you can expect from NFIU
- Process for On-Site examination
- What will be examined
- Your responsibilties: Given access to the premises
NFIU EXAMINATIONS: YOUR RESPONSIBILITIES AND WHAT YOU CAN EXPECT FROM NFIU
The Nigerian Financial Intelligence Unit(NFIU) plays an integral role in the fight against money laundering and terrorism financing. The NFIU fulfils its mission by providing law enforcement and security agencies with information on suspected money laundering and terrorism financing, called financial intelligence. The Unit develops financial intelligence by analyzing the financial transaction reports it receives from the many reporting entities - such as banks, securities dealers, money service businesses, hotels, car dealers, casinos, etc that are required, by law, to make reports.
NFIU's mandate also includes ensuring compliance with Part 1 of the Money Laundering (Prohibition) Act 2004. Under Part 1, entities that must report to the Unit are required to report specific transactions, keep particular records, and verify customer identities. A proper compliance regime ensures that the NFIU receives the quantity and quality of reports it requires to produce solid financial intelligence and assures law enforcement and security agencies of quick access to information because of improved client identification and record keeping practices.
In other words, by creating compliance regimes that conform to the law, entities become part of a larger effort to combat money laundering and terrorist financing. In making sure that entities comply with their obligations, NFIU takes a co-operative approach. While exercising its mandate at ensuring compliance, the Unit is committed to working with the reporting entities by fostering partnerships that enhances the integrity of Nigeria's financial system which promotes greater public safety. NFIU is empowered to undertake "compliance examinations" to ensure that reporting entities meet the obligations of the law.
PROCESS FOR ON-SITE EXAMINATION
- Normally, an NFIU compliance officer will provide advance notice of the examination, which would be scheduled by telephone and confirmed in a letter to the respective organization that will be examined. Prior to arriving, the NFIU compliance officer may request documentation including your policies and procedures,samples of transaction documentation, as well as other documents. This will allow a portion of the examination to begin before arriving on-site and thus limit the amount of time the Officers spend at the inspection site.
- In exceptional circumstances, no advance notice will be given. The Act gives NFIU the power to enter a business premises and carry out a compliance examination without prior notice.
- At the conclusion of the examination, the NFIU officer will provide a review of the finding verbally.
- A letter outlining any deficiencies will be provided by NFIU, following the examination. Reporting entities may also be asked for an action plan and timelines to remedy these deficiencies.
WHAT WILL BE EXAMINED
A NFIU compliance examination will try to determine if the entity is meeting its obligations under the legislation. Some areas of review can include:
- Implementation of compliance regime;
- Reporting of all required transactions;
- Implementation of client identification; and record keeping requirements.
- Training (creating AML/CFT awareness amongst employees)
- This checklist of questions can serve as a guide:
- Has a compliance officer been appointed?
- Are there policies and procedures in place?
- Is there a periodic review of the compliance regime?
- Is a training program established?
- Are the reporting requirement being met?
- Are client identification requirement been met?
- Are the appropriate records being kept?
The NFIU examination manual can provide you with additional guidance on how to implement a compliance regime. What you can expect from NFIU compliance Officers;
NFIU's approach to compliance is cooperative. Reporting entities should expect to be treated professionally and courteously.
- Clear Information:
Compliance officer strive to communicate extensively by providing clear and consistent policy interpretations and to facilitate your understanding of your legislative obligations, as well as of CBN Guidelines, policies and procedures.
If you feel that the assessment given during the examination is incorrect or unfair, a complaints resolution process has been established to hear your concerns. You are asked to contact the Director NFIU.
- Privacy and Confidentiality:
Personal, transactional and financial information will be protected against unauthorized use or disclosure.
GIVING ACCESS TO THE PREMISES:
The Act allows authorized NFIU personnel to enter a premise to ensure compliance with the law. You are thus required to give access to authorized NFIU officers.
The ML (P) Act regulation requires that you produce any record that is required to be kept on request by an authorized officer. NFIU's compliance officers are authorized to make such requests.
The Act indicates that an owner or person in charge of the premises involved in a compliance examination shall give the authorized NFIU officer all reasonable assistance and furnish them with any information with respect to the administration of the Act and regulations. This includes making copies of documents when required.
Although NFIU will work cooperatively with reporting entities to rectify any non - compliance issues, the Unit can also refer cases of non - compliance to Law Enforcement and Regulatory Authorities when there is extensive non - compliance or little expectation of immediate or future compliance.