SERAP gives CBN ultimatum to reverse regulations on customers’ media handle or face litigation
The Socio-Economic Rights and Accountability Project (SERAP) has urged the acting Governor of the Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi, to “immediately delete the patently unlawful provisions in the Central Bank of Nigeria (Customer Due Diligence) Regulations directing banks to obtain information on customers’ social media handles for the purpose of identification.”
The advocacy group also urged him to “withdraw the Circular number FPR/DIR/PUB/CIR/007/076 of 20 June 2023 mandating banks and other financial institutions to implement and comply with the unlawful mandatory provisions on customers’ social media handles in the CBN Regulations.”
According to Section 6(a)(iv) of the CBN Regulations, banks and other financial institutions “shall identify their customer and obtain information on the social media handle of the customer.” Section 6(b)(iii) contains a similar provision.
This is contained in a letter dated June 24, 2023, and signed by SERAP deputy director Kolawole Oluwadare.
SERAP in its statement said, “The CBN Regulations and directive to banks to obtain details of customers’ social media addresses violate Nigerians’ rights to freedom of expression and privacy. It is inconsistent and incompatible with the rule of law.
“The CBN ought to contribute to the advancement of respect for the rule of law and human rights in the discharge of its statutory functions, and not undermine or violate these fundamental legal requirements and standards.
“The purported mandatory requirement would inhibit Nigerians from freely exercising their human rights online. If obtained, such information may also be misused for political and other unlawful purposes.”
The letter from SERAP partly reads, “We would be grateful if the recommended measures are taken within 3 days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest.
“The mandatory requirement of social media handles or addresses of customers does not serve any legitimate aim. Such information may be used to unjustifiably or arbitrarily to restrict the rights to freedom of expression and privacy.
“SERAP is gravely concerned that the CBN Regulations and directive to banks and other financial institutions would impermissibly restrict the constitutional and international rights to freedom of expression, privacy and victims’ right to justice and effective remedies.
“Requiring social media handles or addresses of customers as a means of identification would have a disproportionate chilling effect on the effective enjoyment by Nigerians of their rights to freedom of expression and privacy online.
“The CBN bears the burden of justifying any restriction on people’s freedom of expression and privacy. Under the Nigerian Constitution 1999 [as amended] and human rights treaties to which the country is a state party, any restrictions on these rights must be applied strictly so that the rights are not put in jeopardy.
“There are other means of identification such as passport, driver’s licence, Bank Verification Number (BVN), and Tax Identification Number (TIN), which banks and other financial institutions already require their customers to provide.
“The additional requirement of obtaining details of a customer’s social media handle or address fails to meet the requirements of legality, necessity, and proportionality.
“The CBN Regulation does not demonstrate how the use of social media handle or address as a means of identification would serve to improve banks and other financial institutions’ ability to implement and comply with the laws and regulations relating to customer due diligence.
“The Directive by the CBN, which does not, in any event, carry the force of law, also fails to provide any explanation as to how social media handles or addresses can facilitate compliance with regulations relating to customer due diligence.
“Obtaining the details of customers’ social media handles or addresses would unduly interfere with the rights to freedom of expression and privacy. It would also be disproportionate to any purported legitimate aim that the CBN seeks to achieve.
“The facts that there are sufficient means of identification for CBN, banks and other financial institutions to rely on to meet the requirement of Know Your Customer also heighten concerns of overreach and confer far-reaching discretion on banks and financial institutions.
“Obtaining information on customers’ social media handles or addresses as means of identification is, therefore, more intrusive than necessary.
“The CBN fails to show how details of customers’ social media handles or addresses would assist banks and other financial institutions to effectively implement and comply with the laws and regulations relating to customer due diligence
“Human rights, the rule of law and democracy are interlinked and mutually reinforcing and central to the universal and indivisible core values and principles of the United Nations, the African Union and the Economic Community of West African States to which Nigeria belongs.
“The CBN is bound to respect the constitutional and international human rights of Nigerians including the rights to freedom of expression and privacy.
“Under the principle of pacta sunt servanda and general principles governing the law of treaties, the CBN is also bound to uphold and apply in the discharge of its statutory functions the human rights treaties to which Nigeria is a state party.’’
Recall that on Friday, June 23, 2023, the CBN released its Customer Due Diligence Regulations 2023 or financial institutions under its regulatory purview, taking a decisive stance against financial crimes.
The CBN’s latest move aims to bolster compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) provisions while aligning with international best practices.
In an effort to enhance the accuracy and depth of customer identification, the CBN made it mandatory for financial institutions to collect and verify customers’ social media handles as part of their Know Your Customer (KYC) requirements.
