The Securities and Exchange Commission (SEC) of Nigeria has ordered that the assets of 13 new companies linked to financing terrorism in the capital market be frozen right away.
According to reports, the order affects ten people and three businesses. It comes after the Nigeria Sanctions Committee put them on the Nigeria Sanctions List.
The SEC said in a circular called “Commission’s sweeping compliance directive issued to capital market operators” that the action was based on the Terrorism (Prevention and Prohibition) Act, 2022.
The law says that all money, property, and other economic resources tied to certain people and groups must be frozen right away, without any warning.
The Commission made it clear that all Capital Market Operators and stakeholders must follow the directive exactly.
The SEC says that the directive is legally binding and needs to be put into action right away throughout the financial system.
“The order to freeze accounts and stop all transactions with the flagged entities is binding on all capital market operators and stakeholders,” the Commission said.
It also said that operators must quickly find and freeze all assets linked to the designated people and groups without giving them any notice. They must also tell the Nigeria Sanctions Committee Secretariat about all frozen assets and attempted transactions.
The Commission made it clear that compliance must happen right away.
The directive came with information that showed that many of the people who were affected had already been found guilty of financing terrorism.
The SEC says that the Abu Dhabi Federal Court of Appeal found the people guilty in April 2019, and they were connected to the terrorist group Boko Haram.
Reports say that the crimes involved collecting money in Dubai and then sending it to Nigeria to help terrorists.
Sentences ranged from 10 years in prison to life in prison, depending on how serious the crimes were.
The Commission said that some of the companies on the list were used as corporate vehicles to move money illegally.
The SEC said, “This shows a pattern in which corporate vehicles are used as channels for financial flows, which makes it even more important to closely watch business entities in the financial system.”
The SEC made it clear that the asset-freezing mechanism is mostly for prevention.
The Commission says the goal is to stop terrorist groups from using money that supports terrorism before they can use it.
The statement also said that “the SEC stressed that the asset-freezing mechanism is preventive rather than punitive, designed to disrupt financial support systems for terrorism before funds can be deployed.”
The Commission said that not following the directive would have serious consequences.
It said, “The consequences of not following the rules are severe, including civil and criminal liabilities and damage to the reputation of institutions that are found to be lacking.”
The directive also applies to Designated Non-Financial Businesses and Professions, which is a big step that expands enforcement across Nigeria’s financial ecosystem.
The SEC says that this means a more thorough approach to fighting money laundering and terrorism financing.
The Commission said that the most recent action fits with its policy of not tolerating any violations of anti-money laundering and counter-terrorism financing rules in the capital market.
It stressed that all operators must follow the rules in real time, have better monitoring, and send in detailed reports.
The SEC said, “For market operators, trading systems must be able to quickly screen names, trace assets, and report, while compliance teams must act without delay or prior notice to affected clients.”
“It is important to note that not following the rules not only puts companies at risk of regulatory penalties, but it also puts their credibility at risk in both domestic and international markets,” it said.
