Financial Crime World

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Egypt’s AML/CFT Regime Faces Challenges in Combating Money Laundering and Terrorist Financing

Cairo - Egypt’s efforts to combat money laundering (AML) and terrorist financing (CFT) have been criticized for being inadequate, according to a report by the World Bank. The report assessed Egypt’s AML/CFT regime against international standards and found that while progress has been made, significant gaps remain in implementing effective measures to prevent and detect financial crimes.

Key Findings

  • Lack of criminalization of participation in organized crime and adult human trafficking
  • Insufficient provisions in the Penal Code to capture terrorism financing
  • Strong legal framework for mutual legal assistance and extradition, but domestic cooperation and coordination need improvement
  • Significant gaps in implementing key customer due diligence requirements for financial institutions
  • Lack of supervision over non-financial businesses and professions, such as lawyers and accountants

Short-Term Priorities

To improve the effectiveness of Egypt’s AML/CFT regime, the assessors identified the following short-term priorities:

  • Strengthening criminal laws to cover organized crime and adult human trafficking
  • Improving customer due diligence requirements for financial institutions
  • Enhancing supervision over non-financial businesses and professions
  • Increasing transparency in the reporting of suspicious transactions
  • Strengthening domestic cooperation and coordination

Recommendations

The report’s findings are expected to inform Egypt’s efforts to improve its AML/CFT regime, which is critical for maintaining the country’s financial stability and preventing the misuse of its financial system for illicit activities. The World Bank recommends:

  • Strengthening criminal laws to cover organized crime and adult human trafficking
  • Financial institutions in Egypt should implement robust customer due diligence requirements to prevent money laundering and terrorist financing
  • Non-financial businesses and professions, such as lawyers and accountants, should be subject to AML/CFT regulations
  • The Egyptian government should increase transparency in the reporting of suspicious transactions
  • Domestic cooperation and coordination between different agencies and institutions should be strengthened

Conclusion

Egypt’s AML/CFT regime faces significant challenges in combating money laundering and terrorist financing. While progress has been made, more needs to be done to implement effective measures to prevent and detect financial crimes. The World Bank’s assessment highlights the need for Egypt to strengthen its criminal laws, customer due diligence requirements, supervision over non-financial businesses, transparency in reporting suspicious transactions, and domestic cooperation and coordination. Addressing these gaps is critical for maintaining Egypt’s financial stability and preventing the misuse of its financial system for illicit activities.