Objectives and Applicability
The Central Bank of Nigeria (CBN) Guidance on Ultimate Beneficial Owners of Legal Persons and Legal Arrangements was published in January 2023 with the objective to assist financial institutions (FIs) in identifying and verifying beneficial owners of legal persons and legal arrangements in accordance with existing CBN anti-money laundering, combating the financing of terrorism, and countering proliferation financing of weapons of mass destruction in financial institutions ( AML/CFT/CPF) laws and regulations.
The goal is to unveil the beneficial and legal owners of corporate vehicles who may hide behind these corporate vehicles to commit money laundering and terrorism financing.
This Guidance applies to FIs under the regulatory purview of the CBN.
Important to note
The guidance note describes a beneficial owner (BO) as the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is conducted. Also, persons who exercise ultimate effective control over a legal person or legal arrangement are BOs.
In accordance with the Financial Action Task Force (FATF) recommendations, FIs must consider natural person(s) who have actual ownership and control over the corporate vehicle.
FIs are also expected to obtain BO information from public registers (e.g., Corporate Affairs Commission (CAC)) and publicly available sources such as the internet, print, electronic, and social media.
FIs are expected to use the records or information collected through Customer Due Diligence (CDD) or other sources to create a BO register of its customers that are legal persons and legal arrangements.
Steps for Compliance
Customer Due Diligence: Conduct necessary customer due diligence (CDD) when identifying and verifying beneficial owners (BOs).
Three-Step Approach: Adopt a three-step cascade approach as outlined in Regulation 21 of the CBN AML/CFT/CPF Regulations.
Risk-Based Approach: Apply a risk-based methodology in the identification and verification of BOs.
Enhanced Due Diligence: For higher-risk BOs, enhanced CDD and filing of suspicious transactions to the Nigerian Financial Intelligence Unit (NFIU).
Internal Policies: Establish AML/CFT/CPF internal policies and procedures to effectively mitigate identified risks related to BOs.
Identifying Politically Exposed Persons: Have systems in place to determine if a BO is a politically exposed person (PEP) or associated with one.
Record Keeping and Reporting: Keep records of BOs obtained for at least five years and provide periodic returns to the CBN.
How Regfyl Can Help
Regfyl’s AML and compliance platform is designed to simplify and enhance your institution's ability to comply with the CBN’s requirements on identifying ultimate beneficial owners. Our solution offers:
Automated UBO Identification: Regfyl leverages AI and access to public databases and registries to automate the identification of UBOs, reducing the time and effort required to sift through complex corporate ownership structures.
Comprehensive Data Analysis: The platform analyzes multiple data sources, including company registries, regulatory filings, and public records, to uncover indirect ownership layers.
Ongoing Monitoring: Regfyl provides real-time updates and alerts whenever there are changes in the ownership structure, ensuring compliance with UBO reporting requirements.
Risk Profiling: By linking UBOs to Politically Exposed Persons (PEPs), sanctioned individuals, or high-risk entities, Regfyl helps assess the risk associated with beneficial owners.
Enhanced Due Diligence: The platform facilitates deeper investigations into UBOs, flagging potential risks and ensuring that compliance teams meet regulatory expectations.
By integrating Regfyl, financial institutions can confidently navigate the complexities of UBO identification and ensure adherence to the latest regulatory standards, protecting themselves from financial crime and corruption risks.
Reach out to us to find out how we can support you with your UBO identification needs.
Book a 15 min discovery call today.
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