Nigeria Stiffens Oversight of Terror Financing With Latest Rule

A circular issued this month by the country’s Securities and Exchange Commission directs capital market players “to screen and verify every client” before onboarding them and when carrying out one-off transactions.

Operators will need to ensure that clients aren’t associated with any group designated a terrorist organization in Nigeria or similarly labeled elsewhere, including in resolutions of the United Nations Security Council and by the U.S. Treasury’s Office of Foreign Assets Control.

The SEC is “worried” by the threats terrorists pose to security in Nigeria and globally and is working with the government to keep track of their activities, the Abuja-based agency said in an emailed response to questions. It added that operators are required to report all suspicious clients and transactions.

While Nigeria’s law enforcement already has similar compliance rules in place, the latest decision gives greater powers to the market regulator that will carry more sway with brokers and traders. 

Earlier this month, Nigeria labeled some militant groups operating in the north of the country as terrorists, as it seeks solutions to widespread insecurity that’s ravaging the West African nation. In 2017, the government also outlawed a separatist group — the Indigenous People of Biafra — and declared it a terrorist organization.