What do we want you to understand about cybersecurity and money laundering requirements? This article focuses on all you should know as regards complying with legal standards. Let’s begin.
Technology evolution across diverse industry spheres and sectors has introduced a new wave of security challenges. In order to stay on top of this, there are legislations, both national and international. They exist to match rising cyber and security challenges the modern world faces.
In this post, we would be highlighting key regulatory requirements on cybersecurity and money laundering tech start-ups need to take cognizance of. It is vital to point out that these provisions are mostly applicable to tech start-ups within the financial technology space in Nigeria.
The Requirements
First off all, it is important to note the laws that operate in this space. The Cybercrimes (Prohibition and Prevention) Act 2015 and the Money Laundering (Prevention and Prohibition) Act govern the cybersecurity and money laundering space in Nigeria as well as the Anti Money Laundering Regulations 2022.
Importantly, by virtue of the AML 2022, suspicious transaction reports are to be filed by tech startups operating in the fintech space to the (Nigerian Financial Intelligence Unit) NFIU where funds, property and assets are linked to terrorism, weapons of mass destruction, sexual exploitation, bribery, etc.
Also, report of compliance with the provisions of the AML is to be submitted to the CBN by the 31st of Dec of every financial year. Additionally, all records of domestic and international transactions for at least five years after completion or for such longer period as required by CBN must be maintained.
Furthermore, Fintechs shall not operate anonymous accounts or accounts with fictitious names and are also prohibited from operating shell banks in Nigeria.
Importantly, all participants caught by the AML Regulation are to also submit AML employee training program for the following year annually to the CBN
The AML also provides that reports should to go the NFIU. There, UN Security Council acts on frozen accounts and other resolution as it relates to terrorism and financing.
It is vital to note that the AML 2022 imposes higher Know Your Customer (KYC) requirements for politically exposed persons. We would be looking at the scope of KYC in Nigeria in our next post.
With respect to the money laundering laws, the AML provides that financial reporting thresholds of N10,000,000 and N5,000,000 goes to the CBN.
These provisions as well as others documented in the laws are of critical importance to tech startups and companies. It is very vital tech companies concerned with these regulatory guidelines seek comprehensive and detailed advisory on the required areas of compliance for seamless operations.
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References
- Money Laundering (Prevention and Prohibition) Act 2022 available at https://placng.org/i/wp-content/uploads/2022/05/Money-Laundering-Prevention-and-Prohibition-Act-2022.pdf accessed on August 7 2023
- Central Bank of Nigeria AML/CFT Regulations available at https://www.cbn.gov.ng/out/2014/fprd/aml%20act%202013.pdf accessed on August 7 2023
- Emmanuel Agwu, “Money Laundering Act 2022 in Nigeria; Key Provisions & Everything You Need To Know” available at https://youverify.co/blog/money-laundering-prevention-and-prohibition-act-2022-in-nigeria#:~:text=Higher%20Restrictions%20on%20Cash%20Payment,five%20million%20naira)%20for%20individuals accessed on August 7 2023
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