BDCs in ‘no error mode’ as FATF visit beckons

BDCs in ‘no error mode’ as FATF visit beckons

September 02,2019



They are regarded as the weakest link and most implicated, whether true or false when things go awry in the forex market. The reality is that reforms in the last four years have seen their operations become more coordinated.

Under the umbrella body of the Association of Bureaux De Change Operators of Nigeria (ABCON), the more than 45,000 Central Bank of Nigeria (CBN)-licensed operators, are now taking the issue of compliance to regulations locally and globally seriously.

With over $30.4 billion reportedly ferried out of Africa yearly, ABCON is intensifying its commitment to fighting money laundering and terrorist financing and ensuring that its members comply with regulations in doing their business.

Now as a group, they have, through long years of training and guidance, been strengthened and helped members understand the gains of compliance to the Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) rules.

But like the financial reports of corporates, they will have to go through the rigours of verification of processes and compliance with the AML/CFT, not by local regulators, but by the Financial Action Task Force (FATF), which will visit the country this month.

For ABCON, they are willing and ready to receive and assist the team to make a success of the exercise. There is no room for error because it would be detrimental to the country.

A check on the association to ascertain its readiness showed that it has raised the capacity of its licensed members on how to avert the criminal intent of Politically Exposed Persons (PEPs), who may take advantage of their ignorance.

All the members polled told The Guardian that money laundering and terrorist financing pose not only a threat, but enormous challenges to the economy, security, and social life in Nigeria, the region and globally.

ABCON President, Alhaji Aminu Gwadabe, while speaking on the FATF visit, affirmed that the association, in collaboration with CBN has been organising sensitisation workshops for the more than 4,500 licenced operators.

He said the group had severally organised training for its members, and at other times, partnered Nigerian Financial Intelligent Unit (NFIU) and the Economic and Financial Crimes Commission (EFCC) to build capacity for the operators.

At a sensitisation programme on money laundering and terrorism financing at MM2, Lagos, the Acting Chairman, EFCC, Ibrahim Magu, reiterated the need for continuous sensitisation on issues around AML/CFT reporting to improve transparency in BDCs operations.

He said the EFCC would continue to campaign for financial integrity and transparency in BDCs’ operations, warning against the use of BDCs for illicit political transactions, illegal border cash evacuation, among others.

Gwadabe corroborated Magu on the need to create awareness and raise the capacity of its members to check money laundering and terrorist financing and ensure that operators are not used to laundering funds by PEPs.

“The sorry state of public institutions within the ECOWAS region is disturbing. In many public schools, students learn sitting on the floors, the hospitals lack basic drugs, while the road networks are death traps.

“These societal ills thrive where corruption and illicit financial flows are rampant. Public institutions in the ECOWAS region have suffered immensely from the corruption going on in public and private sectors,” he said.

The expected September visit and need for compliance became necessary after the FATF team in February, named Nigeria in a proposed European Union blacklist of nations that were seen as a threat because of lax controls on terrorist financing and money laundering.

The criteria used to blacklist countries include low sanctions against money laundering and terrorist financing, insufficient cooperation with the EU on the matter and lack of transparency over the beneficial owners of companies and trusts.

To ensure there is no “leakage” from BDCs, ABCON had long planned effective coverage of the training and enforcement, across the six geopolitical zones of the country. Today, the members are up-to-date with the obligation of registering and filing reports on the NFIU goAML -Anti-Money Laundering portal.

“ABCON’s primary goal is to ensure that its members comply with all regulations and this will be sustained. We equally have internal mechanisms that are always deployed to punish erring operators.

“We want to continually ensure that BDCs provide liquidity at the retail end of the market and also share intelligent information with the government, whenever we have such information. We have also come to realize that knowledge of compliance makes the job of security operative easier,” Gwadabe said.

The training has entrenched the culture of maintaining a minimum standard of record-keeping among the operators.

An operator told The Guardian that the capacity building workshops were real and have helped BDCS to understand how to raise and submit both the Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) to regulators.

For Gwadabe, the visit by the FATF team will enable them to see new efforts by the country to tackle money laundering and terrorist financing.

While the global body that sets standard for AML/CFT will also assess banks and other financial institutions’ compliance with the rules, ABCON is putting efforts to ensure that none of the members falls foul of the rule.

Like other previous evaluations for Nigeria, the FATF team will carry out checks at the branches of selected banks and BDCs across the country, adding that compliance at the airports and land borders may also come under their scrutiny.

Another operator said BDCs in the country have met a number of compliance requirements specified by FATF and local regulators. “The BDCs have conducted enhanced due diligence, a major compliance requirement on some high-risk customers. The collation and reporting of foreign currency transactions and suspicious transactions by BDCs are now fully automated,” he said.

ABCON had in February, launched its Live Run Automation Portal in Lagos. The technology automates all BDC Operations with those of Nigeria Inter-Bank Settlement System (NIBSS), NFIU and the Central Bank of Nigeria (CBN) to improve the level of compliance of the BDCs with set regulations.

The platform allows BDCs to send their reports online in real time, thereby removing the challenge of manual rendition of reports that have been confronting operators for decades. The project is also boosting the perception towards BDCs in Nigeria, especially international investors.

“The world is going digital, and BDC operators under my leadership are committed to staying ahead of the competition by deploying time-tested technology to deliver effective services to customers and ensure compliance.

“ABCON fully aligns with the statutory provisions of the Money Laundering Prohibition Act, 2011 (as amended), the CBN’s AML/CFT Regulations, 2013 and recommendations of the FATF,” he said.

ABCON Foreign Exchange Retailers Institute has also been proposed and may soon be floated by the leadership of the association, a development that falls within the constitutional mandate of ABCON and will be focused on bridging the knowledge gap among operators and promoting capacity building for global competitiveness.

“We therefore urge the Federal Government to mandate relevant authorities such as the Central Bank of Nigeria (can), Corporate Affairs Commission (CAC), Federal Ministry of Education and Federal Ministry of Justice to grant the institute the necessary approval to enable commence operation,” Gwadabe said.