ABUJA, Nigeria — Nigeria’s Securities and Exchange Commission has ordered capital market operators to restrict financial dealings connected to North Korea and Iran.
The measures take immediate effect.
They are part of tighter controls against money laundering, terrorism financing and the financing of weapons proliferation.
The directive applies to all entities regulated by the SEC under Nigeria’s capital market laws and anti-money laundering rules.
North Korean Relationships Must Be Terminated
Under the new requirements, regulated firms must terminate correspondent banking and other financial relationships with institutions connected to North Korea.
They must also avoid subsidiaries, representative offices and other arrangements linked to North Korean interests.
Transactions involving North Korean individuals, companies or government entities are subject to strict restrictions.
The measures follow guidance from the Financial Action Task Force, which continues to classify North Korea as a high-risk jurisdiction requiring countermeasures because of serious deficiencies in its financial controls.
Iranian Transactions Face Restrictions
The SEC also directed operators to reject transactions involving Iranian financial institutions and strengthen scrutiny of relationships connected to the country.
Iran remains subject to FATF countermeasures over weaknesses in its framework for combating money laundering and terrorism financing.
The commission expects operators to identify customers, counterparties and beneficial owners with links to affected jurisdictions before processing transactions.
Suspicious activity must be reported to the Nigerian Financial Intelligence Unit.
Myanmar Gets Enhanced Scrutiny
The SEC adopted a different approach towards Myanmar.
Rather than requiring the same broad restrictions applied to North Korea and Iran, operators must conduct enhanced due diligence on transactions and business relationships connected to Myanmar.
FATF classifies all three countries as high-risk jurisdictions, but its recommended countermeasures differ according to the risks involved.
The SEC has also instructed firms to increase scrutiny of customers and transactions connected to jurisdictions under FATF increased monitoring.
Operators that fail to comply could face regulatory sanctions.
The new rules require brokers, fund managers and other regulated capital market businesses to review their sanctions-screening, customer-verification and transaction-monitoring systems.
