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CBN bans corporate entities from international money transfer

by Business News Report

The Central Bank of Nigeria (CBN) has banned corporate entities from accessing the services of international money transfer.

According to the apex bank, this is to ensure that corporate organisations don’t use the services of international money transfer to circumvent its reporting requirements.

The ban was contained in the Exposure Draft of Guidelines on International Money Transfer Services in Nigeria, released by the apex bank last week.

The guidelines stated, “The money transfer services shall target individual customers mainly and the transactions shall be on “person to person transfer” basis to safeguard against corporate customers who might structure their transactions into smaller amounts to circumvent the statutory reporting threshold.”

“The permissible operations of International money transfer services shall include allowable inbound and outbound international money transfer transactions. The transactions shall consist of the following activities: The acceptance of monies for the purpose of transmitting them to persons resident in Nigeria or another country; Cross-border personal money transfer services, such as, money transfer services towards family maintenance and money transfer services favouring foreign tourists visiting Nigeria shall be allowed under this arrangement”

The guidelines also disallowed money transfer operators from some activities. It stated, “A money transfer operator is not authorized to: Act as an authorized dealer in gold or other precious metals; Engage in deposit taking and/or lending money;   Maintain current accounts on behalf of customers;   Establish letters of credit; or   act as a custodian of funds on behalf of customers;  Engage in institutional transfers. A money transfer service operator shall not engage in any other business other than as authorized by the Bank. Buy foreign exchange from the domestic foreign exchange market for settlement.”

Furthermore, the guidelines spell out the limit of money that can be transferred, the process and documentation for accessing the money. It stated, “Allowable limit of the outbound money transfer shall be $1,000 or its equivalent per annum, per person subject to periodic review by the CBN.   

“All in-bound money transfers to Nigeria shall only be disbursed to beneficiaries through bank accounts.   Where the beneficiary does not have a bank account, payments shall                 only be made upon the provision of a satisfactory reference from a current account holder in a bank, confirming that the beneficiary is the bona fide owner of the funds.

“The following conditions shall apply in the transaction: An outward payment transaction shall be executed in a convertible currency agreed between the parties; and   Where a currency conversion service is offered before initiation of a payment transaction or at the point of payment, the money transfer services operator must disclose all charges, as well as the exchange rate to be used for converting the payment transaction Split Transactions A money transfer service operator shall not allow or process a transaction that appears to have been deliberately split into small amounts to avoid the reporting requirements under the provisions of the AML/CFT Act.”

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