CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA

CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 

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This good information for our readers is curled from Central Bank of Nigeria’s publication "Guidelines on International Money transfer Services". Its aim is to arm are readers on the procedures for registering as an International Money Transfer Operator.

The fact is, from anywhere you are reading this, you can be one. Just go through this regulations and do the needful. Contact us for your  Corporate documentations with Corporate Affairs Commission, and tax start-up processes with  Federal Inland Revenue Services. As professional accountants, auditors, tax management experts, we can also liaise with the bankers for you.

CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA

Consequently, this guidelines address business rules governing the operation of international money transfer services in Nigeria. In addition, it sets the basis for the  regulation of the services offered at different levels and by diverse participants.

It may interest you to read the following topics for broader knowledge especially how this relates to money laundering and financing of terrorism globally:


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 

  • guidelines on international money transfer services in Nigeria
  • international money transfer operators in Nigeria
  • international money remittance service
  • wire transfer restrictions in Nigeria
  • international money transfer in Nigeria
  • list of money transfer operators in Nigeria
  • outbound money transfer in Nigeria
  • United nations anti money laundering
  • anti-money laundering and combating the financing of terrorism
  • United nations money laundering certificate
  • international money laundering information network

LICENSING REQUIREMENTS

1 No person or institution shall provide international money transfer services
unless such person/institution has been duly licensed by the CBN.

2 Application for a licence to carry on the business of International money transfer services shall be submitted to the office of the Director, Trade &Exchange Department, Central Bank of Nigeria,  Abuja.

3 Documentary Requirements
All applications shall be accompanied with the following:
i. Board of director’s approval to offer International money transfer services.
ii. Copy of the applicant’s certificate of incorporation
iii. Memorandum & Articles of Association (certified copy), of which the
primary object clause shall indicate provision of Money Transfer Services.
iv. Shareholding structure of the Company
v. Forms C02 (Return on Allotment of shares) and C07 (Particulars of Directors)
vi. Profiles of the Board and Management of the Company to include: CVs, functional contact e-mails and telephone numbers, ownership, governance and management structure;
vii. Organogram of the company

viii. Business Plan, to include:
a. Nature of the Business
b. Features of the scheme
c. Internal control systems and monitoring procedures
d. Security features that will be put in place
 e.3 years Financial projections/Market analysis for the Company
f. Transaction and other charges that will be borne by customers
g. Profit sharing agreement among the parties
h. Diagrammatic illustration of transaction flows
i. Consumer Protection and Dispute Resolution Mechanism


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 


ix. Information Technology Policy of the Company including:
a. Privacy Policy
b. Information Ownership/Disclosure/Loss Policy
c. Backup and Restore Policy
d. Network Security Policy
e. Encryption Policy
f. Confidential Data Policy
g. Password Policy
h. Third Party Connection Policy
i. Incidence Response Policy
j. Physical Security Policy

x. Enterprise Risk Management Framework
xi. Contingency and Disaster Recovery Plan(business continuity plan)
xii. Draft agreements with the participating parties
xiii. Tax Clearance Certificate for three (3) years
xiv. Project Deployment Plan (time, location, operation, etc.)
xv. Credit reports from a licensed credit bureau for the shareholders and key
officers of the money transfer services operator;
xvi. Any other information as may be required by the CBN from time to time
xvii. A non-refundable application fee of N500,000 (Five Hundred Thousand Naira) or such other amount that the Bank may specify from time to time, payable to the “Central Bank of Nigeria” by electronic transfer.
xviii. Evidence of meeting the minimum paid up share capital of:
a. N2,000,000,000 (Two Billion Naira) for Nigerian companies; and
b. N50,000,000 (Fifty Million Naira) or its equivalent for Foreign companies, plus the guarantee of the parent company
xix. Presence in at least seven (7) different countries.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 



4 Overseas Partnership Requirements

A money transfer operator, who wishes to engage a foreign technical partner that will provide global or regional payment or money transfer platform, shall obtain a letter of no objection from the CBN.
 The following conditions shall apply to the technical partner:
a. Be a registered entity, licensed in its home country to carry on money transfer activities.
b. Have a minimum Net Worth of US$1 million, as per the latest audited financial statement, or as may be determined by the CBN from time to time.
c. The Overseas technical partner should be well established in the money transfer business, with a track record of operations.
d. There should be an MOU that clearly delineates liabilities in the event of disputes and/or process failures.

5 The CBN shall conduct appropriate due diligence on the promoters, directors and key officers of the proposed money transfer operator.

6 Prohibitions

a. Deposit Money Banks are prohibited from operating as Money Transfer Service Operators (MTSO), but can act as agents.
b. Section 19 (1) (a) of BOFIA 1991 as amended, for persons not qualified to be on the employment of banks, shall also apply to Money Transfer Service Operators.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 


7 Disqualification of Shareholders and officers

In line with the BOFI Act No. 25 of 1991 [as amended], all the conditions stipulating the exclusion of certain individuals from the management of banks, shall apply to the management of Money Transfer Service Providers, except with the written permission of the Governor of the CBN.
Shareholders and officers of the company shall be disqualified, based on the provisions of Section 44 (2) of the BOFIA 1991 as amended. The section provides that: No person shall be appointed or shall remain a director, secretary or an officer of a bank who:

(a) is of unsound mind or as a result of ill- health is incapable of carrying out his duties; or
(b) is declared bankrupt or suspends payments or compounds with his creditors including his bankers; or
(c) is convicted of any offence involving dishonesty or fraud; or
(d) is guilty of serious misconduct in relation to his duties; or
(e) in the case of a person possessed of professional qualification, is disqualified or suspended (otherwise than of his own request) from practicing his profession in Nigeria by the order of any competent authority made in respect of him personally.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 


8 OPERATIONS OF INTERNATIONAL MONEY TRANSFER SERVICES


1 Permissible Activities
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:
(a)The acceptance of monies for the purpose of transmitting them to persons resident in Nigeria or another country.
(b)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.
(c) 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 that might structure their transactions into smaller amounts to circumvent the statutory reporting threshold.

2 Non Permissible Activities
A money transfer operator is not authorized to:
a. Act as an authorized dealer in gold or other precious metals;
b. Engage in deposit taking and/or lending money;
c. Maintain current accounts on behalf of customers;
d. Establish letters of credit; or
e. Act as a custodian of funds on behalf of customers.
f. Engage in institutional transfers. A money transfer service operator shall not engage in any other business other than as authorized by the Bank.
g. Buy foreign exchange from the domestic foreign exchange market for settlement.

3 Business Premises
A money transfer operator shall display prominently at each of its business premises:
(a) The current licence to engage in money transfer services;
(b) The business hours;
(c) Details of the tariffs to be charged;
(d) A notice informing the customers that they are entitled to be issued with a receipt for any money transfer service transactions; and
(e) A notice to the effect that the money transfer operator is not allowed to accept deposits or lend to the public.

4 Notification of Business Hours
A money transfer service operator shall notify the Bank and its customers of:
(i) the business hours for each of its outlets;
(ii) any intended changes in business hours, in any of their places of business, fifteen days in advance, before the changes are effected
5 Temporary closure of business
A money transfer service operator wishing to temporarily close its main offices shall seek the consent of the CBN. In the event of an emergency, the operator shall relocate to its established back up site and notify the CBN accordingly.
The temporary closure of an agency or outlet shall be notified to the CBN immediately.
In either event above, the operator/agent shall display a conspicuous notice to that effect.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 


READ ALSO:
GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA - UPDATED

6 Transfer Limits

1 Allowable limit of the outbound money transfer shall be US$2,000 or its equivalent per transaction, subject to periodic review by the CBN.
2 All in-bound money transfers to Nigeria shall only be disbursed to beneficiaries through bank accounts or mobile money wallets.
3 Where the beneficiary does not have a bank account or mobile money wallet, 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.
4 The following conditions shall apply in the transaction:
i. The currency to be given to a money transfer agent for an outbound transfer shall be the Naira;
ii. An outward payment transaction shall be executed in a convertible currency agreed between the parties; and
iii. 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.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 


Agents

An approved money transfer service operator may conduct its business through an agent, in line with the provisions of these guidelines.
An agent is a suitable entity engaged by a money transfer service operator to provide money transfer service on its behalf, using the agent’s premises, staff and technology.

Suitability for appointment:

An agent shall:
(i) be a corporate body registered with the corporate affairs commission in Nigeria or with a similar body in other jurisdictions or established by law.
(ii) be an existing and well established commercial entity which has been operational for at least 12   months.
(iii) not have been classified as a non performing borrower by any financial institution in the last 12 months.
(iv) possess appropriate physical infrastructure and human resources to provide money transfer services.
(v) not be an entity listed on any Sanction list.
(vi) Be a financial institution under the regulatory purview of the CBN.

 Engagement of an Agent
The money transfer operator shall:
(1) execute a contract with each agent that specifies terms and conditions of their engagements. These terms shall include but are not limited to the following:

(a) A statement that the money transfer services operator is wholly responsible and liable for all actions or omissions of the agent.
b) Measures to mitigate risks associated with agent business including limits, customer transactions, cash management, cash security, security of agent premises and insurance policies;
(c) Specific services to be rendered by the agent;
(d) The rights, expectations, responsibilities and liabilities of both parties;
(e) A statement that the Bank shall have free, unfettered and timely access to the internal systems, documents, reports, records, staff and premises of the agents, in so far as money transfer business is concerned and shall exercise such powers as it may considered necessary;
(f) Appropriate policies and procedures to detect, prevent, report or otherwise deal with incidences of money laundering;
(g) Responsibilities of the agent to deliver supporting transaction documents;
(h) A statement that all information or data that the agent collects in relation to agency money transfer services, whether from the customers, the money transfer operator or from other sources, is the property of the money transfer operator;
(i) Adequate oversight safeguards for the money transfer operator to address instances of non-compliance by the agent with the stipulated obligations;
(j) Prohibition from charging the beneficiary any fees other than the fees agreed upon with the sender, at the initiation of the transaction;
(k) Business hours of the agent;
(l) Suitable limits on cash holding by the agent and also limits on individual customer payments and receipts;
(m) Confidentiality of customer and user information;
(n) Remuneration for the agent;
(o) A transition clause on the rights and obligations of the money transfer operator and the agent upon termination or cessation of the agency contract; and
(p) Detailed procedure for disengagement or termination of the agency contract.

(2) Retain a contract for the life of the agency plus a retention period of 7 years or as may be determined by the CBN from time to time.

(3) Notify the Bank of the appointment of each agent, providing details of name, phone number and any additional information as may be required by the Bank
(4) Conduct the business in compliance with all the applicable laws, regulations and guidelines.

9 Bank accounts

A money transfer operator shall:
i Hold all customer funds for transfer in an account designated as “customers’ account” domiciled with any deposit money bank in Nigeria. This account shall be separate from all other accounts maintained by the operator.
ii Maintain complete and accurate accounting records.
iii Produce, upon request by the Bank, all documents pertaining to the account activity, including, but not limited to, bank statements, cheque books, deposit slips and reconciliations or other comparable account records.


CONCISE GUIDELINES ON INTERNATIONAL MONEY TRANSFER SERVICES IN NIGERIA 

10 Records.


 A money transfer operator shall:
i Maintain a management information system that facilitates efficient collection and processing of data required for audit trails.
ii Maintain accurate information on each transaction. Transaction information shall include:

(a) Date of transaction;
(b) Name, address and contact phone number of sender;
(c) Name, address and contact phone number of beneficiary;
(d) Acceptable means of identification;
(i) Amount and currency;
(j) Occupation of the sender;
(k) Type (Sending or Receiving) and Purpose of the transaction; and
(l) Source of funds.
iii  Issue receipt, which shall contain the following information:
(a) Full names of the customer;
(b) The type and amount of currency sent or received;
(c) The transaction reference;
(d) The nature, time and date of the transaction;
(e) Customer signature; and
(g) Commission charged, if any.

 iv All transactions generated by the money transfer operator in the course of its business activities must be posted in its books of accounts.
V  A money transfer service operator shall keep accurate and up to date records and ensure that the records are verified on a daily basis.

11 Returns.

A money transfer service operator shall submit its returns to the Director, Trade & Exchange Department, Central Bank of Nigeria, Abuja.


12 Anti-Money Laundering Risk

All money transfer operators in Nigeria shall comply with the provisions of the
Central Bank of Nigeria “Anti-Money Laundering and Combating the  Financing of Terrorism in Banks and Other Financial Institutions Regulations 2013” and all other applicable laws and regulations.

This guideline will be updated soon, keep in touch with this website for th update.

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