The Nigerian authorities have criticised the international business community for what they perceive to be discrimination on its insistence on cash-backed letters of credit (L/Cs) from Nigerian importers.

The Governor of the Central Bank of Nigeria (CBN), Professor Charles Soludo, said he was speaking on behalf of the government when he levelled the criticism, just as delegates from across the world gathered for a major meeting of the Financial Action Task Force (FATF).

No basis

"We take exception to the practice where L/Cs opened for Nigerian banks have to be 100 per cent cash-based. This needs to change with the new 25 strong and reliable banks in Nigeria," Soludo said immediately prior to the 13-17 February meeting of the FATF in Cape Town, South Africa.

The central banker also called Nigeria's inclusion on the FATF's list of non-cooperative countries and territories (NCCTs) "unfair, and without basis." Nigeria and Myanmar are now the only two countries designated NCCTs by the FATF, the international money-laundering watchdog that has increasingly shown its teeth since the 9/11 attacks on the US.

FATF's view

Though Myanmar and Nigeria remain on the list of NCCTs, the FATF says it recognises that they have adopted many necessary legal reforms and encouraged further implementation.

In the meantime, the FATF continues to call on financial institutions to scrutinise transactions with persons, businesses, or banks in NCCTs.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.