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Oman’s Anti-Money Laundering and Combating Terrorism Financing Regulations: A Comprehensive Overview

In an effort to combat money laundering and terrorist financing, Oman has implemented a robust anti-money laundering (AML) and combating terrorism financing (CFT) regime. The country’s AML/CFT law, Royal Decree 30/2016, aims to prevent the misuse of financial systems for illicit activities.

Who Does It Apply To?

The AML/CFT law applies to all:

  • Banks
  • Financial institutions
  • Non-financial businesses and professions
  • Non-profit associations operating in Oman

These entities are required to implement effective measures to detect and report suspicious transactions.

Obligations Under the Law

Banks and other covered institutions are obligated to:

  • Correctly identify counterparties, clients, and beneficiaries
  • Determine whether a client or beneficial owner is a politically exposed person (PEP) and conduct further due diligence for PEPs
  • Undertake further due diligence in respect of any party for whom they open a bank account

Banks are also prohibited from opening anonymous accounts or accounts under assumed or fictitious names, numbers, or codes.

Due Diligence Requirements

Banks must undertake necessary due diligence to identify their clients using reliable and independent sources, documents, data, and information in the following cases:

  • Before establishing a business relationship
  • Before carrying out a transaction for a customer with whom they do not have an established business relationship
  • Before executing a wire transfer for a customer with whom they do not have an established business relationship
  • When there is suspicion of money laundering or terrorism financing
  • When there are doubts concerning the accuracy or adequacy of information and/or documentation received from the potential and/or existing customer

Monitoring Existing Relationships

Banks must also monitor all existing relationships and client transactions on an ongoing basis to ensure that information regarding such relationships is consistent with the due diligence conducted at the outset.

Bank Secrecy

The Banking Law in Oman provides that banks, their directors, officers, and employees are prohibited from disclosing or revealing any client-related information unless required by law or as instructed by the Central Bank of Oman (CBO). In such cases, the licensed bank must immediately notify the customer of the disclosure.

Compensation Under the Deposit Protection Scheme

In the event of a bank’s failure, the deposit protection scheme provides compensation up to a maximum amount of OMR20,000 for eligible deposits. Deposits that are not eligible under the scheme include:

  • Inter-bank deposits
  • Items under reconciliation
  • Deposits obtained illegally or related to illicit activities

Implementation and Enforcement

The CBO is responsible for implementing and enforcing the AML/CFT regime in Oman. The central bank has the authority to impose penalties on banks for non-compliance with the regulations, including fines and suspension/cancellation of a banking license.

Overall, Oman’s AML/CFT law aims to prevent the misuse of financial systems for illicit activities and ensure the stability and integrity of the country’s financial sector.