Application of Risk-Based Approach and Enhanced Due Diligence to Customers Connected to FATF Increased Monitoring Jurisdictions

# ECONOMIC AND FINANCIAL CRIMES COMMISSION
## SPECIAL CONTROL UNIT AGAINST MONEY LAUNDERING

Head Office: No.5 Fomella Street, off Adetokunbo Ademola Crescent Wuse II, Abuja.
Tel: 0809 6492 000 Email: info@scuml.org

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**CIRCULAR TO ALL DESIGNATED NON-FINANCIAL BUSINESSES AND PROFESSIONS (DNFBPs) AND SELF-REGULATORY BODIES (SRBs)**

REF: EFCC/SCUML/HQ/04/VOL.2/034
DATE: 18th September, 2026

**SUBJECT: APPLICATION OF A RISK-BASED APPROACH AND ENHANCED DUE DILIGENCE TO CUSTOMERS/CLIENTS CONNECTED TO JURISDICTIONS UNDER FATF INCREASED MONITORING**

The Special Control Unit Against Money Laundering (SCUML), in furtherance of its supervisory mandate over Designated Non-Financial Businesses and Professions (DNFBPs), hereby draws the attention of all DNFBPs and relevant Self-Regulatory Bodies (SRBs) to the Financial Action Task Force (FATF) statement titled “Jurisdictions under Increased Monitoring – 19 June 2026.”

The FATF identifies jurisdictions under increased monitoring as jurisdictions that are actively working with the FATF to address strategic deficiencies in their regimes for combating money laundering, terrorist financing and proliferation financing. These jurisdictions are commonly referred to as being on the FATF “grey list.”

## 1. Jurisdictions under Increased Monitoring

As at 19 June 2026, the FATF identified the following jurisdictions as being under increased monitoring:

1. Angola
2. Bolivia
3. Bosnia and Herzegovina
4. Bulgaria
5. Cameroon
6. Côte d’Ivoire
7. Democratic Republic of the Congo
8. Haiti
9. Iraq
10. Kenya
11. Kuwait
12. Lao PDR
13. Lebanon
14. Monaco
15. Nepal
16. Papua New Guinea
17. South Sudan
18. Syria
19. Venezuela
20. Vietnam
21. Virgin Islands (UK)
22. Yemen

## 2. Risk-Based Approach

All DNFBPs are required to ensure that their customer/client risk assessment frameworks appropriately consider **geographical risk** as one of the relevant factors in determining the overall ML/TF/PF risk associated with a business relationship or occasional transaction.

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Accordingly, where a customer/client, beneficial owner, counterparty, source of funds, source of wealth, business activity, transaction or other relevant relationship has a connection with a jurisdiction under FATF increased monitoring, DNFBPs shall undertake an appropriate risk assessment and, where the circumstances indicate a higher level of risk, apply proportionate and effective enhanced due diligence measures.

The FATF has specifically clarified that inclusion of a jurisdiction under increased monitoring does not require the automatic application of enhanced due diligence, de-risking or the termination of entire classes of customers. Rather, the FATF calls for the information contained in its statements to be taken into account as part of a risk-based analysis.

3. Enhanced Due Diligence Measures

Where the risk assessment establishes that a customer/client or transaction presents heightened ML/TF/PF risks, DNFBPs shall, as appropriate, apply enhanced measures, including:

a. obtaining additional information on the customer/client and the beneficial owner(s);

b. establishing and, where appropriate, corroborating the customer's/client's source of wealth and source of funds;

c. obtaining additional information regarding the purpose and intended nature of the business relationship or transaction;

d. conducting enhanced scrutiny of the customer's/client's business activities, ownership and control structure, geographical connections and expected transaction profile;

e. taking reasonable measures to establish the reasons for transactions involving jurisdictions under increased monitoring, particularly where the transactions are complex, unusually large or have no apparent economic or lawful purpose;

f. conducting enhanced and more frequent monitoring of the business relationship and transactions, where warranted by the assessed risk;

g. obtaining senior management approval, where required by the DNFBP's AML/CFT/CPF policies and applicable legal and regulatory requirements, before establishing or continuing a higher-risk business relationship; and

h. documenting the risk assessment, due diligence measures undertaken, findings and the rationale for the decision to establish, continue, restrict or terminate the relationship.

4. Beneficial Ownership, PEPs and Sanctions Screening

DNFBPs shall pay particular attention to the identification and verification of beneficial owners, persons exercising control over legal persons or arrangements, and politically exposed persons (PEPs) associated with customers/clients connected to the identified jurisdictions.

DNFBPs shall also ensure that appropriate screening is conducted against applicable targeted financial sanctions (TFS) lists provided on the Nigerian Sanction Committee website. Where a potential sanctions match is identified, the DNFBP shall follow the applicable legal and regulatory procedures relating to verification, freezing of assets and reporting.

5. Suspicious Transaction Reporting

DNFBPs are reminded that enhanced due diligence does not replace their obligation to identify and report suspicious transactions or activities.

Where, following the application of customer due diligence and ongoing monitoring measures, there are reasonable grounds to suspect that funds or assets are proceeds of criminal activity or are related to money laundering, terrorist financing or proliferation financing, the DNFBP shall comply with its applicable suspicious transaction reporting obligations.

Particular attention should be given to transactions involving:

• unexplained or unusually complex ownership structures;
• unexplained cross-border transfers;
• transactions inconsistent with the customer's/client's known business or financial profile;
• unexplained third-party payments;
• transactions involving high-risk sectors or activities;
• unusual use of legal persons or arrangements;
• transactions involving persons or entities with links to sanctioned persons or entities; and
• transactions for which the customer/client is unable or unwilling to provide satisfactory information regarding the source of funds or source of wealth.

6. No Blanket De-Risking

DNFBPs and SRBs are specifically advised that the FATF's increased monitoring designation should not be interpreted as requiring the blanket refusal, termination or restriction of legitimate business relationships with customers/clients from the identified jurisdictions.

Decisions concerning the establishment, continuation or termination of a business relationship should be based on the specific risk presented by the customer/client and the circumstances of the relationship or transaction, rather than nationality or jurisdiction alone.

The FATF further encourages jurisdictions to ensure that legitimate flows of funds, including humanitarian assistance, legitimate NPO activities and remittances, are not unnecessarily disrupted or discouraged.

7. Responsibilities of Self-Regulatory Bodies

All relevant SRBs are requested to:

i. disseminate this Circular to their regulated members;

ii. ensure that their members understand the implications of FATF increased monitoring within their respective sectors;

iii. incorporate relevant geographical risk considerations into sectoral AML/CFT/CPF guidance and compliance programmes;

iv. promote effective implementation of risk-based CDD and EDD measures; and

v. monitor compliance with applicable AML/CFT/CPF obligations and take appropriate supervisory or disciplinary action for identified breaches, in accordance with applicable laws and regulations.

8. Record Keeping and Supervisory Compliance

All DNFBPs shall maintain adequate records of customer/client risk assessments, CDD/EDD measures, transaction monitoring and decisions taken in relation to higher-risk relationships.

Such records shall be made available to SCUML and other competent authorities upon request in accordance with applicable laws and regulatory requirements.

9. Continuous Monitoring of FATF Updates

DNFBPs and SRBs are advised to continuously monitor updates issued by the FATF, GIABA, NFIU, SCUML and other relevant competent authorities concerning jurisdictions under increased monitoring and other high-risk jurisdictions.

The FATF's lists and country statements are subject to periodic review. DNFBPs should therefore ensure that their geographical risk assessments and customer risk profiles remain current.

10. Effective Date

This Circular takes immediate effect and shall be read together with all applicable AML/CFT/CPF laws, regulations, guidelines and directives issued by the competent authorities.

All DNFBPs and SRBs are required to ensure strict compliance.

Harry Erin, fsi
21.09.26

DIRECTOR, SPECIAL CONTROL UNIT AGAINST MONEY LAUNDERING (SCUML) ECONOMIC AND FINANCIAL CRIMES COMMISSION (EFCC)