1 OVERVIEW OF MONEY LAUNDERING POLICY

1.1 Policy Statement

As a financial Institution, FBN PLC is committed to full compliance with Money Laundering Laws and regulations applicable in Nigeria and jurisdictions in which it operates including the Know Your Customer (KYC) guidelines issued by the Central Bank of Nigeria.

The bank’s policy is to deal with only those customers whose source of wealth and funds can be reasonably established to be legitimate and who do not pose a reputation risk to the bank. The bank is committed to putting in place proper procedures which will generate a level of awareness and vigilance amongst staff and management to guard against money laundering. It is also the policy of the bank to prohibit relationship with shell banks.

1.2 Scope

This Policy Statement focuses specifically on money laundering issues and covers the operations of FBN PLC. It sets out, at a high level, the key money laundering policies that FBN PLC will operate in relation to all of its business areas.

The policy statement should be read in conjunction with the Money Laundering and Operational Procedures.

1.3 Management and control structure

The Board of Directors of FBN PLC takes ultimate responsibility for money laundering policy. The Board delegates responsibility for the implementation and management of money laundering issues to the Executive Committee (EXCO), who in turn delegates this to the Chief Compliance Officer who is responsible for the day-to-day management of money laundering issues and the periodic review of policy/procedure.

1.4 Appointment of Money Laundering/Compliance Officers

Money Laundering Reporting/Compliance Officers have been appointed for all areas of operations including branches, Area Offices and relevant Head Offices Departments in line with regulatory requirements.

2 LEGISLATION AND REGULATIONS

2.1 Nigerian Legislation

The National Drug Law Enforcement Act (NDLEA) No. 148 of 1989 set the tone adopted for combating money laundering in Nigeria. Ever since, several laws, have been established to check money laundering in all its ramifications. The term ‘money laundering’ embraces proceeds of all forms of economic and financial crime, including funds used for the purpose of terrorism.
The relevant legislation which binds all financial and other institutions operating in Nigeria include:
National Drug Law Enforcement Act (NDLEA) 1989
Central Bank Of Nigeria Act 1991
Banking And Other Financial Institutions Act (BOFIA) 1991 (As Amended)
Failed Banks (Recovery Of Debts) And Financial Malpractices In Bank Act 1994 (Amended 1999)
Foreign Exchange Monitoring & Miscellaneous Act 1995
Money Laundering Act 1995
Securities Exchange Commission Act (SEC) 1997
The Corrupt Practices And Other Related Offences Act (CPRO) 2000
Money Laundering Amendment Act 2002
Economic And Financial Crimes Commission (EFCC) 2002
Money Laundering (Prohibition) Act 2003
National Insurance Commission Act (NAICOM)
The Money Laundering (Prohibition) Act 2003 makes it an offence for failure to report eligible and suspicious transactions as specified under the different sections of the act. It is also an offence for anybody to acquire or possess assets acquired through crime or to provide assistance to any person to launder proceeds of crime.

2.2 International Legislation

The standard of International Legislation varies from country to country. A number of countries have legislation which meet the standard set by the international body – The Financial Action Task Force (FATF). Countries bench mark their legislations against the 40 recommendations set by FATF and may be blacklisted if these standards are not met.

2.3 Nigerian Regulators

The Central Bank of Nigeria (CBN), National Law Enforcement Agency (NDLEA), Securities Exchange Commission(SEC), National Insurance Commission(NAICOM) and Economic and Financial Crimes Commission (EFCC) enforce adherence to the Money Laundering Regulations depending on which sector of the economy is under consideration.
The CBN has also issued a money laundering guidance note as well as the Know Your Customer Manual (KYCM) which all banks operating within Nigeria must adopt.

2.4 The Financial Action Task Force (FATF)

FATF was established by the G-7 Summit that was held in Paris in 1989 in response to mounting concern over money laundering. The task force was convened from the G-7 member states, the European Commission and eight other countries. Its purpose is to develop and promote policies to combat money laundering at national and international levels. It also monitors anti-money laundering progress and promotes the adoption and implementation of anti-money laundering measures globally.

The Money Laundering Guidance Notes issued periodically includes an appendix that gives useful information on the status of money laundering legislation in a number of different countries. This is split in to three sections:
EU/FATF countries/territories
Non co-operative countries and territories (NCCTs).
Countries with material deficiencies.
It should be noted that Nigeria is currently within the NCCT group, but concerted efforts are being made by the Authorities to obtain FATF certification.

This is updated periodically and a copy of any up-dates is circulated to staff.

The Bank will apply the highest standards of diligence when handling transactions. Any dealings with countries not mentioned as being in the first group will be handled with greater vigilance and if deemed necessary additional formalities will be applied.

3 PROCEDURES

3.1 FBN PLC Procedures

As part of the Bank’s commitment to combat money laundering, it has in place procedures that are designed to cover not only the provisions of Nigeria legislation but also reflect best industry practice.

The KYC procedures cover all aspects of money laundering and include ID documentation required for a customer to open an account, the up-date of customer information during the relationship, account monitoring and reporting suspicious transactions.

3.2 Up-dating procedures

As operational policies and money laundering regulations and practices change, the money laundering procedures have to be up-dated.

When an up-date becomes necessary the amendment will be prepared and presented to EXCO for approval.

4 FBN PLC’s RESPONSIBILITIES

4.1 Objectives

The Bank has three main objectives when committing itself to the prevention of money laundering:

Legal and Regulatory – complying with Nigeria legislation and regulatory obligations that impose a series of specific obligations on financial institutions and their employees.

Professional – ensuring that the Bank is not directly or indirectly involved in recycling the proceeds of crime that would call into question its reputation, integrity and, if fraud is involved, its solvency.

Ethical – taking part in the fight against crime.

4.2 Risks

Continued vigilance by the Bank and its staff in the fight against money laundering will protect the Bank from the following risks:
Adverse publicity, loss of public confidence, and loss of business caused by inadvertent association with criminals.
Regulatory action by the CBN.
Losses arising from inadvertent business relationships with criminals who may themselves defraud the Bank or undermine the integrity of the Banks’ employees.
Confiscation by the courts of the assets of drug traffickers and other criminals, including deposits and other assets held by banks as collateral or comfort for loans.
Criminal prosecution and severe penalties in the increasing number of countries in which money laundering is a serious crime.

4.3 Staff training

The Bank is obliged to provide training for staff in order to increase staff awareness, maintain competence and be able to recognise and report suspicious transactions. This is done achieved by:

Circulating procedures, including up-dates, to all relevant staff.
Training and Development department providing bank wide training
Organising seminars run by the Compliance department and external consultants.
Circulating media and internet information; including up-dates of the FATF equivalence status of other countries and territories.
A record of all training will be kept including where appropriate signed evidence from the relevant members of staff that they attended/completed the training or a copy of a test that the member of staff has completed and achieved a satisfactory pass mark.

4.4 Notices regarding suspected terrorists and terrorist organisations

The names featured on any notices issued by the Central Bank of Nigeria, the US Treasury (OFAC list) or other relevant bodies regarding suspected terrorists are checked against the Bank’s records to ensure the Bank is not in a business relationship with them. A record is kept of all notices received and they are signed off to evidence that the check has been completed and that none of the featured names appear in the Bank’s records

5 STAFF's RESPONSIBILITIES

5.1 Introduction

First Bank of Nigeria PLC is firmly committed to full compliance with the money laundering laws and regulations applicable in Nigeria. The responsibility to ensure that the Bank does not have any involvement in money laundering activity falls upon all members of staff.
It is important that the bank and its staff, no matter how junior or senior, understand and fully comply with these responsibilities. The penalties for non-compliance are severe for both the Bank and individual members of staff. The Banks’ licence and the jobs of all concerned could be at risk. In addition there are criminal penalties for assisting money launderers.

5.2 Adherence to procedures

Members of staff are liable if they fail to report a transaction that they should have known or suspected was money laundering. Members of staff are however protected from being sued by customers for breach of confidentiality if they report a suspicion of money laundering. In addition a member of staff will be committing an offence if he/she discloses to a customer, or
any other person, that he/she has been reported or that he/she is under investigation.