Asset freezes target terror financing links, testing Nigeria's financial compliance systems

Financial institutions across Nigeria must now immediately freeze assets and halt transactions for 13 individuals and entities newly designated as suspected terrorism financiers. The directive comes from the Securities and Exchange Commission (SEC), which cited inclusion on the national sanctions list by the Nigeria Sanctions Committee as the basis for the action. Under the Terrorism (Prevention and Prohibition) Act, 2022, authorities can freeze funds, assets, and economic resources linked to sanctioned parties without prior notice. All capital market operators are required to identify affected accounts and suspend activity, while also reporting frozen assets and blocked transactions to the sanctions committee. The mandate applies not only to banks and investment firms but also to designated non-financial businesses and professions, expanding the scope of enforcement. The SEC warned that non-compliance could trigger civil and criminal penalties, along with reputational harm, particularly in international markets where credibility is tied to compliance rigor. Regulators emphasized that the measures are preventive, aimed at cutting off financial conduits before they can support illicit activity. The action is part of Nigeria’s broader push to strengthen anti-money laundering and counter-terrorism financing controls, demanding real-time screening, rapid name checks, and proactive reporting across the financial sector.