CBN labels Benin Republic accounts high risk, warns Nigerian banks

The Central Bank of Nigeria (CBN) has warned banks and other financial institutions in the country to be vigilant as regards transactions involving Benin Republic.

Nigeria’s financial regulator disclosed that Benin Republic had become a hub for illicit drug trade in West Africa, so banks need to enhance security measures on existing accounts transacting with the region.

This was revealed in a circular signed by CBN Director of Banking Supervision Department, Asuquo Evelyn, in a circular to financial organisations last month, dated April 11.

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The apex bank gave the warning to avoid the use of Nigerian financial institutions as channel used to move the illicit funds from illegal drug dealings, and mandated the reclassification of related customers as high risk.

The banks were told to double down on policies such as know-your-customer (KYC) and customer due diligence (CDD), “We write to bring to your attention an intelligence report availed to the Central Bank of Nigeria (CBN) which indicated that the Benin Republic is increasingly becoming a drug trafficking transit and consumption hub in West Africa.” CBN said.

Instructing that “In order to ensure that Nigerian banks are not used as conduits for laundering such illicit funds, it has become imperative to intensify the know-your-customer (KYC) and customer due diligence (CDD) measures in your bank as required by regulation.

“Consequently, you are required to implement additional measures on customers and business relationships linked to the Benin Republic. You are also required to re-classify related customers and transactions as high risk and conduct enhanced due diligence (ED) procedures accordingly.”

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