Nigeria’s Securities and Exchange Commission (SEC) has mandated the immediate freezing of assets belonging to 13 capital market entities suspected of terrorism financing. This directive, issued under the Terrorism (Prevention and Prohibition) Act 2022, follows the designation of 10 individuals and three organizations on Nigeria’s Sanctions List by the Nigeria Sanctions Committee. The SEC’s compliance directive requires capital market operators to promptly identify and freeze all accounts linked to the listed persons and entities. Additionally, they must halt any ongoing or future transactions and report both frozen assets and any attempted dealings to the Sanctions Committee Secretariat.
This action is described as preventive, aimed at disrupting financial support networks for terrorism before funds can be deployed. Notably, several of the designated individuals were previously convicted in April 2019 by the Abu Dhabi Federal Court of Appeal for financing terrorism related to Boko Haram. These convictions involved raising funds in Dubai and transferring them to Nigeria to support terrorist activities, with penalties ranging from 10-year jail terms to life imprisonment.
The SEC emphasized that this measure highlights how corporate entities can be exploited as conduits for illicit financial flows, underscoring the need for tighter scrutiny across Nigeria’s financial system. The directive also extends to Designated Non-Financial Businesses and Professions (DNFBPs), reflecting a broader enforcement strategy within the country’s financial ecosystem.
Market operators have been warned that failure to comply with these regulations could lead to severe consequences, including civil and criminal penalties, as well as reputational damage. The Commission has urged firms to enhance their real-time monitoring systems, ensure effective name screening, and take action without delay or prior notice to affected clients. The SEC reaffirmed its zero-tolerance stance on anti-money laundering and counter-terrorism financing violations, stressing that non-compliance could undermine the credibility of institutions both locally and internationally.
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