Financial Crime World

Establishing a Strong AML/CFT Regime in Somalia

The Somali parliament’s passage of the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT) in 2016 marked a significant step towards establishing a robust financial system in the country. The Act has been instrumental in setting up key institutions that play a crucial role in combating money laundering and terrorist financing.

Institutional Development under the AML/CFT Act 2016

Establishment of NAMLC

The National Anti-Money Laundering and Financing Terrorism Committee (NAMLC) was established to develop a national AML/CFT strategy, provide funding for capacity building, set strategic priorities for the Financial Reporting Center (FRC), establish information sharing among member institutions, and enhance domestic coordination.

Role of NAMLC

  • Develops a national AML/CFT strategy
  • Provides funding for capacity building
  • Sets strategic priorities for FRC
  • Establishes information sharing among member institutions
  • Enhances domestic coordination

National AML/CFT Committee and Taskforce

The committee consists of key stakeholders entrusted with implementing the AML/CFT national strategy, chaired by the Minister of Finance. An AML/CFT Taskforce was created to operationalize and enforce NAMLC directives, focusing on identifying, analyzing, and mitigating ML/FT risks and threats.

FRC’s Role

The FRC is an independent agency responsible for receiving, requesting, analyzing, and disseminating information concerning money laundering and terrorist financing. Its key functions include:

  • Analysis of suspicious financial activities
  • Investigation of financial crimes
  • AML/CFT risk assessment
  • Issuing regulations and guidelines for reporting entities

Vision and Mission

The FRC’s vision is to become a trusted agency in support of a robust financial system hostile to financial crimes, helping rebuild Somalia’s financial system and restore its credibility globally.

Objectives

To undertake systematic collection and analysis of data on money transfers, document suspicious transactions, provide strategic intelligence, and increase risk awareness. This is aligned with fulfilling Somalia’s international obligations to combat money laundering and terrorist financing.

Collaboration

The FRC works closely with reporting entities, including financial institutions and designated non-financial businesses, to address ML/FT challenges effectively.