Regulatory Requirement For Antimoney Laundering And Countering The Finance Of Terrorism

1. NPOs are required to file cash-based transactions for cash transactions in excess of $1,000 or its naira equivalent (as stipulated under Section 5 of the Money Laundering Prohibition Act):

Before embarking on any transaction of the value of $1,000 USD or its equivalent, NPOs are required to conduct Know Your Customer (KYC) on the customer using the customer’s identity records with photograph and send these records to SCUML within 7 days of the transaction (CBTR).

Non-compliance attracts a fine of 250,000 (relatively).

2. NPOs are to file Currency Transactions Reports - CTRs (as stipulated under section 10 of the Money Laundering Prohibition Act) to SCUML of any single transaction:

Lodgment or transfer of funds in excess of 5 million naira or its equivalent in the case of an individual or 10 million naira in the of body corporate within 7 days from the date of transaction via SCUML online reporting platform on the SCUML Website: www.scuml.org

CONSEQUENCES OF NON-DISCLOSURE
Liable to a fine of not less than N250,000 and not more than N1 million (relatively).
How to file a Cash/Currency Transaction Report
Download the template from the SCUML website on
https://scuml.org/scuml/index.php/downloads/dnfisreporting-template/ item/12-ctr-cbt-online-reporting-template-for-allthe-dnfis-sector

NPOs must conduct KYC (know your customers)
o _{The eCTR template is divided under these basic headings:}

DNFI (reporting institution) – Name of organisation making the report
Name of Client/Source of Fund (donors, grantors, financial contributors to the NGO. An NPO could be the “Client/Source of Fund” if the funds are generated internally).
Beneficiary - Name of the recipient organisation or body
Transaction details – the engagement in which the funds of a “Client/Source of Fund” is committed in actualization.
Agents/ Representative - In cases where an NPO is acting as a coordinating beneficiary between a donor and other beneficiary organizations
Name of Company/ Customer-i.e. the beneficiary. Corporate beneficiaries should state their full business name under the column for “last name”.
Address: Location of the office or branch of the Non- Profit Organization where the transaction took place.

All Cash Based Transaction Reports (CBTR) and Currency Transaction Reports (CTR) should be forwarded to info@scuml.org and a copy also sent to the respective SCUML Zonal office email address where your organization is located.

3. NPOs must conduct KYC (know your customers) or CDD (customer due diligence) before commencement of any credible relationship/transaction
CDD or KYC simply means the act of performing background checks on the beneficiary or sponsors to ensure they are risk assessed of ML and TF before being on-board, especially on international payments relating to NPO programmes. These are necessary because organisations could ignorantly receive donor funds from people whose aims are basically to launder funds, finance terrorism or maybe cause some kind of mayhem.

How to conduct CDD:
I. Data Collection: to identify and obtain information from the sponsor/donor/beneficiary.
For Individuals

• Full name
• Residential address, mailing address
• Contact numbers, email addresses
• Place of birth, date of birth
• Gender
• Marital status
• Nationality
• Race
• Government-issued identification number
• Government-issued tax identification number
• Occupation
• Specimen signature

For Entity

• Name of corporation
• Type of corporation
• Date of incorporation
• Place of incorporation
• Board resolution on authorised signatories
• Constitution
• Certificate of Incorporation
• Annual report
• Directors
• Shareholders / Senior Management
• Ultimate Beneficial Owners
• Source of funds

II. Independent verification of collection: to verify the information collected from the sponsor/ beneficiary to ensure accuracy (can be verified by documents issued by a government or an independent reputable agency).

• Government-issued photo identification card
• Government-issued passport
• Tax bill
• Phone/power/water bill to prove residential address
• Business profile issued by a government regulator for business entities
• Certificate of incorporation from a country’s official company register
• Articles of association, or memorandum of association

III. Name screening
via a name-screening database and/or an internal blacklist to determine if a sponsor / donor / beneficiary poses a risk.
The objective is to ascertain if the client is known to be:

• Politically Exposed Person (PEPs)
• Criminal
• Terrorist
• Sanctioned individual/entity
• Reported in media to be involved in any activity that is adverse in nature

IV. Decision outcome
A Compliance Officer may then provide a recommendation to outline the customer’s risk level (low, medium, high) to the organisation and proposes certain controls when establishing business relationship with the customer.

V. Ongoing Monitoring
On a regular basis, transactions and account activity should be scrutinized for suspicious activicity

VI. Records Keeping
Ensuring that all records of the donor / beneficiary are documented as per the organisation’s retention policy