Anti-money Laundering / Combating the Financing of Terrorism (AML/CFT) Policy

INTRODUCTION

  • This Anti-Money Laundering & Combating the Financing of Terrorism Policy (AMF/CFT Policy) sets out the guidelines by which VFD Microfinance Bank Limited (VFDMFB or the Company) shall comply with its AML/CFT obligations under the law, as well as regulatory directives, and prescribes procedures for preventing any transaction that facilitates criminal activities.
  • Money Laundering and Financing Terrorism (ML/FT) are financial crimes with far reaching economic effects. Money laundering is the process through which proceeds of crime and their true origin and ownership are altered so that the proceeds appear legitimate, whileterrorism financing entails providing or collecting funds, from legitimate or illegitimate sources, to be used to carry out an act of terrorism. An AML/CFT compliance protocolis critical to preserving a company‘s corporate integrity, reputation and operational efficiency, as ithelps to prevent a company, its employees and customers from being used for money laundering, terrorism financing or other financial crime.
  • This AML/CFT Policy applies to all of VFD MFB’s Personnel. You must read, understand and comply with this AML/CFT Policy when processing transactions with Customers. This AML/CFT Policy sets out what we expect from you for the Company to comply with applicable laws.
  • This AML/CFT Policy is an internal document and cannot be shared with third parties, Customers or regulators without the prior authorisation from the Company.

 

SCOPE

  • The Personnel of VFD MFB, its board of directors, management and every person working for VFDMFB are required to adhere to this AML/CFT Policy to protect VFD MFBand its reputation from being misused for money laundering and/or terrorism financing by ensuring they discharge their responsibilities in a manner that enables full implementation of this AML/CFT Policy.
  • VFD MFB shall apply this AML/CFT Policy to its relationships with its counterparties or partners.
  • Specifically, the AML/CFT Policy shall be incorporated into the operations of business, marketing, business origination, market regulation, financial control, as well as any other relevant departments within VFD MFB.
  • VFDMFB shall review this AML/CFT Policy from time to time, as is required.
  • Please contact the Company with any questions about the operation of this AML/CFT Policy or if you have any concerns that this policy is not being or has not been followed.

 

DEFINITIONS

AML/CFT means Anti-Money Laundering/Combating the Financing of Terrorism;

Company has the meaning given to it in Paragraph 1.1;

Customer has the meaning set out in Paragraph8.3herein;

Customer Due Diligence (CDD) covers steps taken by VFDMFB to identify its Customers and validate their identities;

CBN means the Central Bank of Nigeria which is the apex regulator in the financial services sector in Nigeria and has the regulatory purview over banks and other financial institutions in Nigeria and specifically the Company as a licensed entity;

Fraud means any illegal acts characterized by deceit, concealment, or violation of trust, whether or not, threat of violence, or physical force has been applied;

KYC means Know Your Customer which entails obtaining and verifying Customer identity, preservation of records of Customers, and mandatory disclosure of transactions to authorized statutory bodies;

ML/FT means Money Laundering and Financing Terrorism;

Personnel means all employees, workers, contractors, agency workers, consultants, directors, members, and others of the Company;

Politically Exposed Persons (PEPs) means individuals who are or have been entrusted with prominent public functions in any country, for example Heads of state or Heads of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, or important political party officials; generally presenting a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold;

Suspicious Transaction means a transaction which is unusual due to its size, volume, type, or pattern or otherwise suggestive of known money laundering methods. It includes such a transaction that is inconsistent with a Customer’s known, legitimate business or personal activities or normal business for that type of account or that lacks an obvious economic rationale, and as described in Paragraph 18;

Suspicious Transaction Red Flags means any of the transactions listed in Schedule 3 of the CBN AML/CFT Regulations, 2013 (as amended);

Whistle Blowing means raising a concern about a wrongdoing within an organization. The concern must be genuine concern about a crime, criminal offence, miscarriage of justice, dangers to health and safety of the environment, etc.; and

We means the VFD MFB or the Company.

 

REGULATORY AND LEGAL FRAMEWORK

  • As a financial institution regulated by the CBN, VFDMFB is monitored for compliance with money laundering and terrorism financinglaws by organisations/agencies and under the provisions of the legislations and regulations, such as:
    • Institutional Framework
      • Economic and Financial Crimes Commission (EFCC)
      • Nigerian Financial Intelligence Unit (NFIU)
      • National Drug Law Enforcement Agency (NDLEA)
      • Central Bank of Nigeria (CBN)
      • Federal Ministry of Commerce (FMC)
      • Independent Corrupt Practices Commission (ICPC)
      • Federal Inland Revenue Service (FIRS)
      • Nigeria Immigration Service (NIS)
    • Legal Framework
      • Money Laundering (Prohibition) Act, 2011 (as amended)
      • Terrorism (Prevention) Act, 2011 (as amended)
      • CBN AML/CFT Regulations, 2013 (as amended)
      • Terrorism Prevention (Freezing of International Terrorists Funds and Other Related Measures) Regulations, 2011
      • Cybercrimes (Prohibition, Prevention, etc.) Act, 2015
      • Special Control Unit against Money Laundering AMLCFT Regulations for Designated Non-Financial Businesses and Professions in Nigeria, 2013
      • Advance Fee Fraud and other Fraud Related Offences Act, 2006
      • ICPC (Establishment) Act
      • EFCC (Establishment) Act, 2004
      • NDLEA Act

PURPOSE

The purpose of this AML/CFT Policy is to:

  • Establish procedures and minimum standards to protect VFD MFB from being used as a channel to launder money, finance terrorism andother forms of financial crimes.
  • Provide guidance on the standards of conduct and practice that must be followed in the implementation of the KYC and CDD requirements of a financial institution.
  • Protect VFDMFB against fraud, reputational and other financial market risks.
  • Minimize the risks faced by VFD MFB from being associated with the proceeds of crime.
  • Comply with relevant rules and regulations of the CBN on AML/CFT.

 

POLICY STATEMENT

The following statements shall guide the principles and procedures for VFD MFB’s AML/CFT compliance. VFDMFB shall:

  • Identify and verify the identity of its Customers and their beneficial owners before a business relationship is established.
  • Formulate and implement internal controls and other procedures that will deter criminals from using its facilities for money laundering and terrorist financing and to ensure that its obligations under subsisting laws and regulations are met.
  • Establish an internal referral process and procedures for compliance matters.
  • Designate an AML/CFT Compliance Officer at the management level, with the relevant competence, authority, and independence to implement this AML/CFT Policy.
  • Comply with the requirements of the CBN Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Risk-based Supervision Framework 2011; the CBN Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Regulation 2013, the Money Laundering (Prohibition) Act, 2011 (as amended); the Terrorism (Prevention) Act, 2011 (as amended);the Terrorism Prevention (Freezing of International Terrorists Funds and other Related Measures) Regulations 2013; and the Cybercrime (Prohibition, Prevention, etc.) Act, 2015;including the provisions of the Legal Framework set out in 1.2above.
  • Comply promptly with all the requests made pursuant to subsisting laws and regulations and shall provide relevant information to the CBN and the NFIU and other relevant law enforcement agencies as set out in 1.1 above, on AML/CFT matters.
  • Implement policies to prevent the misuse of technological developments in money laundering or terrorist financing schemes such as internationally accepted credit or debit cards.
  • Identify and report to the NFIU, in the course of its business, any Suspicious Transactions derived from the criminal activities defined in CBN AML/CFT Regulations 2013.
  • Exit relationships which pose heightened money laundering risks to VFD MFB.
  • Effectively communicate this AML/CFT Policy to raise the level of Personnel awareness on AML/CFT issues.
  • Put in place and update the AML/CFT employee training programs for new hires and regular refresher trainings for existing Personnel.
  • Regularly train its Personnel to identify suspicious activities/transactions and to take appropriate actions.