NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi and Toluwalase Oliver-Jude, Jackson, Etti & Edu
period of ten consecutive years may ultimately lead to the company being struck off the register. Regulatory and Supervisory Powers of the CAC The CAC exercises broad oversight functions, includ - ing the authority to: • register and regulate companies; • inspect corporate records for compliance with statutory requirements; • investigate breaches of CAMA and impose sanc - tions or corrective measures; and • strike off companies that are non-compliant or no longer in operation. Digital Compliance Reforms In recent years, the CAC has introduced digital reforms aimed at improving efficiency and transparency, with all statutory filings now processed electronically through its online portal. 5.4 Global Anti-Money Laundering Nigeria’s anti-money laundering (AML) regime is aligned with global standards set by the Financial Action Task Force (FATF) and implemented through local laws and regulators, including the Nigerian Financial Intelligence Unit (NFIU), CBN, SEC and Spe - cial Control Unit Against Money Laundering. AML obligations vary by risk profile, with enhanced requirements for banks, fintechs, capital market oper - ators, casinos, real estate businesses and other Des - ignated Non-Financial Businesses and Professions (DNFBPs). Under the Money Laundering (Preven - tion and Prohibition) Act 2022, large and suspicious transactions must be promptly reported to the NFIU, detailed records retained for at least five years, and customer due diligence conducted, including disclo - sure of beneficial owners through the CAC register. AML compliance is a board-level responsibility: regu - lators require boards to approve AML policies, over - see risk management, support independent compli - ance functions, and receive regular reports. Directors may face personal liability where AML breaches occur through their consent, connivance or neglect, includ - ing criminal exposure in serious cases, while compa - nies risk fines, asset forfeiture or winding-up. The law
nevertheless protects directors and employees who make AML reports in good faith from civil or criminal liability. 6. Audit, Risk and Internal Controls 6.1 External Auditors In accordance with CAMA, every company except a small company as defined under Section 394 (3), or a company that has not commenced business since incorporation, is required to appoint an external audi - tor to audit its financial statements. A fundamental requirement governing the auditor– company relationship is independence. To safeguard this, an auditor is generally not permitted to serve the same company for more than ten consecutive years, after which a seven-year cooling-off period must be observed before reappointment. The audit engage - ment partner is also required to rotate every five years. A cooling-off period is also expected before any mem - ber of the audit team may be employed by the com - pany, to avoid conflicts of interest. Companies are further expected to establish clear pol - icies governing the appointment and independence of external auditors, including defining the permissible scope of any non-audit services that may be provided by the auditor. 6.2 Risk Management and Internal Controls In Nigeria, geopolitical risk is not governed by a sin - gle dedicated framework but is instead addressed through sector-specific regulatory requirements and enterprise risk management expectations set by regu - lators such as the CBN and SEC. Under the NCCG 2018 and other sector-specific regu - lations, the board of directors has primary responsibil - ity for risk management and internal controls, and is required to establish a robust risk management frame - work to identify, assess and mitigate risks, and ensure its integration into day-to-day operations. This over - sight is typically exercised through the Board Audit and Risk Management Committee, which monitors risk exposures, reviews internal control effectiveness,
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