Financial Crime World

Financial Institution Fined for Failure to Conduct Customer Due Diligence, Identify Employees Who Fail to Attend Training Programs

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Regulatory Body Slaps Sanctions on OFI for Lack of Compliance with Anti-Money Laundering and Combating the Financing of Terrorism Regulations

Lagos, Nigeria - The regulatory body has imposed sanctions on a financial institution (OFI) for its failure to conduct adequate customer due diligence (CDD) and identify employees who fail to attend assigned training programs.

Failure to Conduct Customer Due Diligence

According to sources, the OFI was found to have breached several provisions of the CBN AML/CFT Regulation 2013 (as amended), including the requirement to conduct CDD on customers. The regulatory body also discovered that the institution had failed to implement effective measures to identify and verify the identities of its customers, as required by the regulation.

Failure to Implement Adequate Training Programs

In addition, the OFI was found to have not implemented adequate training programs for its employees, which led to a lack of compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. As a result, several employees were identified who had failed to attend assigned training programs.

Regulatory Requirements

  • CDD involves customer identification, information gathering, and monitoring, and must comply with applicable regulatory requirements.
  • OFIs must ensure that their CDD policies, procedures, and processes are commensurate with the institution’s risk profile and allow for changes to a customer’s risk profiling.
  • OFIs must assign person(s) to be responsible for reviewing or approving such changes in customer risk profiling.
  • Enhanced due diligence (EDD) procedures and processes must be implemented to identify customers that may pose higher risk of money laundering or terrorist financing.

Consequences

The regulatory body has imposed significant sanctions on the OFI, including fines and penalties. The institution has also been ordered to implement corrective measures to ensure compliance with AML/CFT regulations.

In a statement, the regulatory body emphasized the importance of compliance with AML/CFT regulations, stating that “non-compliance with these regulations can have serious consequences for financial institutions and the integrity of the financial system.”

Recommendations

  • All financial institutions should take immediate action to review their CDD policies, procedures, and processes to ensure compliance with regulatory requirements.
  • The institution should implement effective training programs for its employees to ensure that they are aware of their responsibilities under AML/CFT regulations.

Conclusion

The sanctions imposed on the OFI serve as a reminder to all financial institutions of the importance of complying with AML/CFT regulations. The regulatory body will continue to monitor compliance with these regulations and take enforcement action where necessary.