Effective date: 1st August 2024
1. Purpose
This policy document outlines the standards, procedures, and controls that Northquest Finance Company must adhere to in order to comply with the Central Bank of Nigeria (CBN) regulations regarding Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering the Financing of Proliferation (CPF). The purpose is to safeguard the company from being used for illegal activities such as money laundering, terrorism financing, or the proliferation of weapons of mass destruction, and to ensure that Northquest operates with integrity and in full compliance with all relevant legal requirements.
2. Scope
This policy applies to all departments, business units, employees, directors, officers, agents, and any other representatives of Northquest Finance Company. It governs all customer interactions, from onboarding to transaction monitoring, and applies to all types of customers, including individuals, corporate entities, and other organizations.
3. Definitions
To ensure clarity and consistency, the following terms are defined:
- KYC (Know Your Customer): A process that involves verifying the identity, background, and risk profile of customers before and during the business relationship.
- AML (Anti-Money Laundering): Policies and procedures designed to prevent, detect, and report money laundering activities.
- CFT (Countering the Financing of Terrorism): Efforts aimed at preventing and detecting the financing of terrorist activities.
- CPF (Countering the Financing of Proliferation): Measures taken to prevent and detect the financing of the proliferation of weapons of mass destruction.
- Customer Due Diligence (CDD): The process of gathering and verifying information about a customer to assess the level of risk they pose.
- Enhanced Due Diligence (EDD): A more thorough level of due diligence applied to customers who present a higher risk.
- Bank Verification Number (BVN): is a unique identification number issued by the Central Bank of Nigeria (CBN) to individuals with bank accounts in Nigeria. It is used as a means of verifying the identity of customers across all Nigerian banks, ensuring that a single individual does not have multiple identities within the banking system.
- Politically Exposed Persons (PEPs): Individuals who hold prominent public functions, as well as their immediate family members and close associates.
- Suspicious Activity Report (SAR): A report filed with the Nigerian Financial Intelligence Unit (NFIU) when a transaction or activity is suspected of being related to money laundering, terrorism financing, or other illegal activities.
4. Policy Statement
Northquest Finance Company Limited is committed to maintaining the highest standards of compliance with all applicable laws and regulations regarding AML, CFT, and CPF. The company will not engage in or facilitate any activities that could be associated with money laundering, terrorism financing, or proliferation financing. All employees are required to adhere strictly to the procedures outlined in this document and to remain vigilant in identifying and reporting suspicious activities.
5. KYC Procedures
5.1 Customer Identification
The first step in the KYC process is to establish and verify the identity of the customer:
5.1.1 Individual Customers:
- Obtain and verify the customer’s full name, date of birth, address, BVN, and a valid government-issued photo ID (such as a National ID, Driver’s License, Voters card, or International Passport).
- Verify the provided information against third-party databases and watchlists (such as SMILE ID, NIBSS etc.).
- Verify the customer's identity by confirming their Bank Verification Number (BVN) against the relevant database to ensure authenticity.
5.1.2 Corporate Customers
- Collect and verify the company’s CAC documents which includes Certificate of Incorporation, Allotment of shares, Particulars of Directors, Memorandum and Articles of Association, and other relevant legal documentation.
- Identify and verify the identity and BVN of key stakeholders, such as directors and beneficial owners, using similar procedures as for individual customers. ▪ Conduct a risk assessment to determine the nature and purpose of the business relationship.
5.2 Customer Due Diligence (CDD): CDD involves the collection of additional information about the customer’s activities and the purpose of the business relationship:
5.2.1 Conduct CDD at the outset of the business relationship and update it periodically, based on the customer’s risk profile.
5.2.2 For low-risk customers, CDD may involve only the collection of basic information and monitoring of transactions.
5.2.3 For high-risk customers (such as PEPs), Enhanced Due Diligence (EDD) must be applied. This may include gathering more detailed information, continuous monitoring, and obtaining approval from senior management before entering into a business relationship.
5.3 Onboarding Process: The onboarding process involves:
5.3.1 Completion of the KYC form by the customer, providing all necessary identification and documentation.
5.3.2 Verification of the provided information against external databases, sanctions lists, and watchlists.
5.3.3 Approval of the onboarding by the Compliance Officer, especially for high-risk customers.
5.3.4 Establishing a customer risk profile based on the information collected during onboarding.
5.4 Ongoing Monitoring: Continuous monitoring of customer activities is essential to detect any unusual or suspicious behavior:
5.4.1 Transaction Monitoring: Implement automated systems to monitor transactions and flag any that are inconsistent with the customer’s risk profile.
5.4.2 Regular Updates: Regularly review and update customer information, especially for high-risk customers or those involved in large or complex transactions.
5.4.3 Review Alerts: Investigate any alerts generated by the monitoring systems and determine if a Suspicious Activity Report (SAR) is required.
6. AML/CFT/CPF Procedures
6.1 Risk Assessment: The risk assessment process is central to effective AML/CFT/CPF compliance:
6.1.1 Perform a comprehensive risk assessment to identify potential AML/CFT/CPF risks associated with different types of customers, products, services, and geographic locations.
6.1.2 Classify customers into risk categories (low, medium, high) based on factors such as the nature of the business, transaction patterns, and geographic risk.
6.1.3 Update the risk assessment at least annually or when there are significant changes in the customer’s behavior or circumstances.
6.2 Reporting of Suspicious Activities: Timely reporting of suspicious activities is crucial;
6.2.1 All employees are required to immediately report any suspicious activities or transactions to the Compliance Officer, using the internal reporting mechanism. 6.2.2 The Compliance Officer is responsible for analyzing the report and, if necessary, filing a SAR with the Nigerian Financial Intelligence Unit (NFIU) within the timeframe required by law.
6.2.3 Maintain confidentiality of the SAR process, ensuring that the customer or other parties involved are not informed of the report.
6.3 Record Keeping: Proper record-keeping is essential for both compliance and audit purposes:
6.3.1 Maintain all records related to KYC, CDD, and transactions for a minimum of five years from the date of the transaction or the termination of the business relationship, whichever is later.
6.3.2 Records should include copies of all identification documents, transaction records, communication logs, and SARs.
6.3.3 Ensure that records are stored securely and can be accessed quickly if needed for an audit or investigation.
6.4 Employee Training: Regular training ensures that all staff members are equipped to comply with AML/CFT/CPF regulations;
6.4.1 Provide AML/CFT/CPF training to all employees at least once a year, with additional training for new hires and those in high-risk positions.
6.4.2 Training should cover key topics such as the identification of suspicious activities, the use of transaction monitoring tools, reporting procedures, and updates on CBN regulations.
6.4.3 Track attendance and performance in training sessions to ensure that all employees meet the required standards.
7. Roles and Responsibilities
Clear delineation of roles ensures effective implementation of the AML/CFT/CPF policy:
7.1 Board of Directors:
- Oversee the implementation and effectiveness of the AML/CFT/CPF program. ▪ Ensure that adequate resources are allocated for compliance efforts. ▪ Review and approve the policy annually or as needed.
7.2 Compliance Officer:
- Manage the day-to-day implementation of the AML/CFT/CPF program. ▪ Conduct risk assessments, monitor transactions, and report suspicious activities. ▪ Liaise with regulatory authorities and ensure that the company complies with all legal requirements.
7.3 Employees:
- Adhere strictly to the procedures outlined in this policy.
- Report any suspicious activities to the Compliance Officer.
- Participate in regular AML/CFT/CPF training sessions.
8. Internal Controls and Audit
Internal controls and regular audits are vital to maintaining the integrity of the AML/CFT/CPF program:
8.1 Internal Controls:
- Implement a system of internal controls to ensure compliance with the AML/CFT/CPF policy.
- Regularly review the effectiveness of these controls and make adjustments as necessary.
- Use automated systems where possible to enhance the effectiveness of monitoring and reporting.
8.2 Audits:
- Conduct regular internal audits of the AML/CFT/CPF program to assess its effectiveness.
- Audits should include a review of customer files, transaction monitoring, and SAR processes.
- Findings from the audit should be reported to the Board of Directors, along with recommendations for improvement.
9. Penalties for Non-Compliance
Non-compliance with this policy can result in severe consequences for both the company and the individual:
9.1 Employees found to be non-compliant with the AML/CFT/CPF policy may face disciplinary action, up to and including termination of employment.
9.2 Non-compliance may also result in legal penalties for the company, including fines, sanctions, and damage to the company’s reputation.
9.3 The company may be required to take corrective actions, including enhanced monitoring, additional training, or changes to internal controls.
10. Review and Amendments
To ensure that the policy remains effective and up-to-date:
10.1 This policy will be reviewed at least annually or whenever there are significant changes in applicable laws, regulations, or the company’s operations.
10.2 Any amendments to this policy must be reviewed and approved by the Board of Directors before implementation.
10.3 Employees will be informed of any changes to the policy and provided with updated training if necessary.
Authorized Signatory Authorized Signatory Jerry Ehanmo Enoma Agbonifo
Appendices
Appendix A: Relevant Laws and Regulations
- CBN AML/CFT/CPF Regulations
- Nigerian Financial Intelligence Unit (NFIU) Guidelines
- International AML/CFT/CPF Standards (e.g., FATF Recommendations)
Appendix B: Sample KYC Forms
- Individual Customer KYC Form
- Corporate Customer KYC Form
- Politically Exposed Persons (PEPs) Identification Form
Appendix C: Contact Information for Regulatory Authorities
- Central Bank of Nigeria (CBN): contactcbn@cbn.gov.ng , +234 817 665 7060
- Nigerian Financial Intelligence Unit (NFIU): compliance@nfiu.gov.ng
- Other Relevant Authorities: info@efcc.gov.ng , +234 8093322644