Nigeria’s halt to forex sales to money changers may increase trade-based financial crime risk

Central Bank of Nigeria (CBN) has announced it has halted sales of foreign exchange to the country’s money changers or Bureaux De Change (BDCs) on the grounds that they facilitate illicit financial flows (IFFs) and other financial crimes, including terrorist funding.

As this move blocks one of the country’s most used channels for IFFs, those intent on moving funds illicitly may turn to trade-based financial crime to move their money.

Immediate halt

“The CBN observed that the BDCs aid illicit financial flows and other financial crimes. The bank has thus decided to discontinue the sale of forex to the BDCs with immediate effect,” CBN governor Godwin Emefiele said.

He added that harmful practices of BDCs have also put enormous pressure on Nigeria’s currency, the naira.

Warning to banks

Foreign exchange will now be sold to the country’s commercial banks, thus improving the supply of foreign currency to those who Emefiele describes as “deserving customers”.

The governor said Nigerian regulations had permitted money changers to sell a maximum of US$5,000 dollars per day, but the CBN claims to have observed some operators selling millions of US dollars per day.

Bank sanctions warning

Emefiele warned banks that once a customer presents all the documentation required to purchase forex, commercial banks should ensure they supply that forex.

Any bank found circumventing the new system would face sanctions he added.


Categories: Trade Based Financial crimes News

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