The Central Bank of Nigeria (CBN) has issued a directive requiring banks, fintech companies, and other payment service providers to disclose their ultimate beneficial owners (UBOs). This new regulatory measure is part of a broader transparency initiative aimed at combating money laundering, fraud, and other financial crimes within Nigeria's financial system.
New Regulatory Guidelines
The directive, outlined in fresh guidelines from the apex bank, mandates financial institutions under its supervision to identify, verify, and maintain accurate records of individuals who ultimately own, control, or benefit from their operations. The CBN emphasized that institutions must look beyond company registration documents to uncover the real persons behind corporate structures, even when ownership is obscured through multiple companies or nominee arrangements.
Combating Illicit Activities
The move is designed to prevent the misuse of corporate entities for money laundering, terrorism financing, corruption, tax evasion, and other illicit activities. CBN Governor Olayemi Cardoso stated that the guidelines align with global standards on beneficial ownership transparency and are intended to enhance accountability in Nigeria's financial sector.
According to the CBN, hidden ownership structures have become a global concern, often used to conceal crime proceeds, evade regulatory scrutiny, and disguise identities in suspicious transactions. The new requirements apply to banks, payment service providers, fintech firms, and other regulated entities.
Strengthening Anti-Money Laundering Framework
The guidelines are expected to bolster Nigeria's anti-money laundering framework and aid regulators in tracing the true beneficiaries of financial transactions during investigations into fraud or other financial crimes. Financial institutions must take reasonable steps to determine the natural persons who ultimately own or control a company and ensure this information remains accurate and up to date.
This directive is part of broader efforts by Nigerian authorities to align financial regulations with international best practices and recommendations from global anti-money laundering bodies. Institutions are now required to review their ownership records and ensure full compliance with the CBN's disclosure requirements.
