Addis Ababa, October 2025 — The National Bank of Ethiopia (NBE) has issued a stern directive to all banking institutions to crack down on business operations conducted through individuals’ personal or third-party accounts. The move is part of a broader effort to strengthen financial oversight and address risks linked to tax evasion and illicit finance.
Background & Legal Basis
- The directive is grounded in Proclamation No. 1359/2017, which empowers the NBE to regulate and supervise financial institutions across Ethiopia.
- The bank has reported that a substantial number of business organizations and individual traders are using personal bank accounts or third-party accounts to carry out transactions—rather than using the business accounts they registered with tax authorities.
- This practice circumvents routine scrutiny by tax collection agencies and undermines transparency in the financial system.
Risks and Red Flags
- According to the NBE statement, transactions conducted in this manner may facilitate money laundering, financing of criminal activities, or terrorist funding, since they evade formal oversight.
- The central bank warns that such arrangements may mask the true nature or source of funds, making it difficult for regulators and law enforcement to trace suspicious flows.
- In addition, by sidestepping business-registered accounts, these transactions weaken the ability of the tax authority to monitor revenue, detect underreporting, and audit proper compliance.
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