Terror Financing: SEC Orders Immediate Freeze On 13 Entities’ Assets

Nigeria’s Securities and Exchange Commission (SEC) has directed an immediate freeze on the assets of 13 newly designated entities linked to terrorism financing within the capital market.

.....

Naija News reports that the directive, which affects 10 individuals and three corporate entities, follows their inclusion on the Nigeria Sanctions List by the Nigeria Sanctions Committee.

In a circular titled ‘Commission’s sweeping compliance directive issued to capital market operators’, the SEC said the action was anchored on the provisions of the Terrorism (Prevention and Prohibition) Act, 2022.

The law mandates the immediate freezing of all funds, assets, and economic resources linked to designated individuals and organisations without prior notice.

The Commission stressed that all Capital Market Operators and stakeholders must comply strictly with the directive.

According to the SEC, the directive is binding and requires urgent enforcement across the financial system.

“The directive to freeze accounts and halt all transactions with the flagged entities is binding on all capital market operators and stakeholders,” the Commission stated.

It added that operators must immediately identify and freeze all assets linked to the designated persons and entities without prior notification; report all frozen assets and attempted transactions to the Nigeria Sanctions Committee Secretariat.

The Commission emphasised that compliance must be immediate and without delay.

Details released alongside the directive revealed that several of the affected individuals had previously been convicted for terrorism financing.

According to the SEC, the convictions were handed down by the Abu Dhabi Federal Court of Appeal in April 2019, with links to the extremist group Boko Haram.

The offences reportedly involved the collection of funds in Dubai and subsequent transfers to Nigeria to support terrorist operations.

Sentences ranged from 10 years imprisonment to life sentences, reflecting the gravity of the crimes.

The Commission noted that some of the listed entities were used as corporate vehicles to channel illicit financial flows.

“This highlights a pattern where corporate vehicles are used as channels for financial flows, reinforcing the need for heightened scrutiny of business entities within the financial system,”

the SEC said.

The SEC clarified that the asset-freezing mechanism is primarily preventive.

According to the Commission, the objective is to disrupt financial networks that support terrorism before such funds can be deployed.

“The SEC also emphasised that the asset-freezing mechanism is preventive rather than punitive, designed to disrupt financial support systems for terrorism before funds can be deployed,” the statement noted.

The Commission warned that failure to comply with the directive would attract serious consequences.

“The implications for non-compliance are severe, including both civil and criminal liabilities, as well as reputational damage for institutions found wanting,” it stated.

In a significant move, the directive also applies to Designated Non-Financial Businesses and Professions, broadening enforcement across Nigeria’s financial ecosystem.

This, according to the SEC, signals a more comprehensive approach to tackling money laundering and terrorism financing.

The latest action, the Commission said, aligns with its zero-tolerance stance on anti-money laundering and counter-terrorism financing violations within the capital market.

It stressed the need for real-time compliance, enhanced monitoring, and detailed reporting by all operators.

“For market operators, trading systems must be capable of rapid name screening, asset tracing, and reporting, while compliance teams are expected to act without delay or prior notice to affected clients,” the SEC stated.

“It has to be noted that failure to comply not only exposes firms to regulatory sanctions but also risks damaging their credibility in both domestic and international markets,” it added.