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Yemen’s Financial Intelligence Unit Boosts Compliance Training for Banks

In a significant move towards strengthening financial crime-fighting efforts in Yemen, the Financial Intelligence Unit (FIU) in Aden has published its second annual report with support from the US Agency for International Development’s Economic Recovery and Livelihoods Program (ERLP).

Combating Terrorist Financing and Money Laundering

The report highlights the unit’s growing strength in combating terrorist financing and money laundering, key fuels for criminal activities. The FIU serves as a central hub for receiving, analyzing, and disseminating financial intelligence related to suspicious transactions and activities.

Enhanced Collaboration with USAID ERLP

Established in 2019, the FIU has been equipped with the necessary foundation to function effectively and align its oversight activities with international best practices. With USAID ERLP experts providing close support since 2020, the unit’s financial intelligence capabilities have been enhanced.

Regulatory Compliance and Integrity

The collaboration between the FIU and USAID ERLP demonstrates a commitment to fostering regulatory compliance and integrity within Yemen’s financial system. The unit’s efforts also reflect its commitment to the Financial Action Task Force (FATF), an intergovernmental initiative that sets anti-money laundering/counter financing terrorism standards.

Analysis of AML/CFT Law and Recommendations

USAID ERLP initiated its support in 2020 with an analysis of Yemen’s AML/CFT law, identifying areas requiring revision to meet FATF standards. The analysis and recommendations were reviewed with the unit’s staff, leading to key amendments addressing legislative gaps.

Updates to Circulars and Bank Compliance Policies

In 2021, USAID ERLP experts assisted the Central Bank of Yemen (CBY) in updating circulars to address these shortcomings. The circulars, published in 2022, provided instructions on bank compliance policies necessary to meet AML/CFT requirements and precise indicators for human trafficking, sexual exploitation, and insurance fraud schemes.

Establishing an AML/CFT Unit and On-Site Inspections

The FIU has also established an AML/CFT unit within the Central Bank of Yemen to oversee bank inspections and provide in-depth training on inspection techniques. On-site inspections were conducted at participating foreign exchange auction banks, and the unit adopted procedures for FX auctions.

Expansion of National and International Network

USAID ERLP’s support has also led to the publication of the FIU’s first annual report, expansion of its national and international network through Memoranda of Understanding with authorities, and signing information-sharing MOUs with six countries. The program has complemented targeted capacity development for the unit’s staff, including a training-of-trainers program and an in-depth workshop on key risks associated with non-compliance.

Commitment to Excellence

The FIU head, Mr. Basem Dabwan, expressed his commitment to presenting the unit in its best possible light, adhering to the highest standards and qualities, and looks forward to further enhancing its positive image through continued partnership and cooperation with USAID ERLP.