Terrorism Financiers: SEC orders immediate freeze of assets linked to 13 entities over terrorism concerns

Nigeria’s Securities and Exchange Commission (SEC) has directed the immediate freezing of assets belonging to 13 newly identified entities allegedly linked to terrorism within the capital market.

The directive, titled ‘Commission’s sweeping compliance directive issued to capital market operators’, followed the designation and blacklisting of 10 individuals and three organisations on the Nigeria Sanctions List by the Nigeria Sanctions Committee.

The commission based its action on provisions of the Terrorism (Prevention and Prohibition) Act, 2022, which requires the immediate freezing of all funds, assets, and economic resources tied to the affected individuals and organisations without prior notice.

According to the SEC, all capital market operators and stakeholders have been notified that, in line with section 49 of the Act, the Nigeria Sanctions Committee approved the inclusion of the listed names and entities for asset freezes, travel bans, and arms embargoes.

“The directive to free accounts and halt all transactions with the flagged entities is binding on all capital market operators and stakeholders, with strict reporting and compliance obligations, including: immediate identification and freezing of all assets linked to designated individuals and entities without prior notification. Mandatory reporting of frozen assets and attempted transactions to the Nigeria Sanctions Committee Secretariat.”

Further details showed that several of the listed individuals were convicted by the Abu Dhabi Federal Court of Appeal in April 2019 for financing terrorism activities linked to Boko Haram.

The offences reportedly involved raising funds in Dubai and transferring them to Nigeria to support terrorist operations, with penalties ranging from 10-year prison terms to life sentences.

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

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

Additionally, the directive extends beyond traditional financial institutions to include Designated Non-Financial Businesses and Professions (DNFBPs), signalling a broader enforcement drive across Nigeria’s financial system.

The commission added that the move aligns with its strict enforcement of anti-money laundering and counter-terrorism financing rules, stressing the need for real-time compliance, detailed reporting, and continuous monitoring of transactions.

“For market operators, the 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.

“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”, the statement added.