Regulatory Update: CBN Commences Mystery Compliance Checks on BDCs to Enforce AML/CFT Regulations

Overview

The Central Bank of Nigeria (CBN) has issued a communication to all licensed Bureau De Change (BDC) operators, reiterating the critical importance of compliance with Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) regulations.

The apex bank will commence deployment of anonymous compliance assessors to evaluate the practical implementation of AML/CFT/CPF obligations by BDCs. These checks are part of broader efforts to safeguard the integrity of Nigeria’s financial system and ensure strict regulatory adherence by licensed BDCs.

The exercise focus areas include:

Customer identification procedures
Know Your Customer (KYC) compliance
Suspicious transaction detection and reporting

Regulatory Frameworks Referenced

BDC operators are reminded of their obligation to ensure full compliance with the following:

Money Laundering (Prevention and Prohibition) Act, 2022
Terrorism (Prevention and Prohibition) Act, 2022
Regulatory and Supervisory Guidelines for BDC Operators in Nigeria, 2024
All relevant directives from the CBN and the Nigerian Financial Intelligence Unit (NFIU)

The CBN has cautioned that non-compliance or deficiencies identified during the mystery shopping exercises will result in strict regulatory actions, including monetary sanctions and possible revocation of operating licenses.

Recommended Actions for BDCs

To avoid regulatory penalties, licensed BDC operators are therefore advised to immediately:

Review and update internal AML/CFT policies and procedures
Train staff on compliance obligations
Ensure proper KYC documentation during all onboarding processes
Monitor and report any suspicious transactions as required by law

Why This Matters for Financial Institutions

This initiative underscores the CBN’s commitment to building a resilient and transparent financial ecosystem. For financial operators and compliance teams, staying proactive and informed is crucial to maintaining operational licenses and trust in the sector.