Title: Central Bank of Egypt’s New Regulations to Combat Money Laundering and Terrorism Financing

The Central Bank of Egypt (CBE) has recently announced new regulations to strengthen its stance against money laundering and terrorism financing. These regulations align Egypt’s banking sector with international standards.

Overview of New Regulations

The CBE highlighted the importance of these regulations, aiming to adopt best international practices and reinforce existing measures. The regulations apply to:

1. All banks operating in Egypt
2. Their foreign branches and majority-owned subsidiaries
3. Foreign banks based in Egypt

Banks must ensure that their branches and subsidiaries follow the same or stricter measures as those required by Egypt, without conflicting with local laws or instructions.

Indicators of Suspicious Activities

The CBE issued guidelines on indicators of suspicious activities that banks should monitor and report.

Cash Transactions

Large or frequent deposits and withdrawals not aligning with a customer’s profile or activity can be indicative of money laundering. Cash deposits by various individuals or entities into the same account without a clear relationship or purpose are also a concern. Frequent cash withdrawals followed by transfers to other accounts without a clear justification can signal money moving through a bank improperly.

External Transfers

Banks must remain vigilant to suspicious external transfers. Large or frequent transfers, especially those involving cash payment instructions, that do not align with a customer’s normal activity are potential red flags. Transactions to or from different parties without clear relationships or justifications, as well as transfers to high-risk regions or countries, can also raise suspicions.

Trade Financing Operations

The CBE addressed the risk of money laundering and terrorism financing through trade financing operations. Banks should be wary of:

1. Shipping goods to or from high-risk countries
2. Discrepancies in the description or value of goods in related documents

Credit Operations

In the context of credit operations, the CBE highlighted new indicators of suspicious activities:

1. Customers seeking loans with collateral from assets that don’t belong to them
2. Customers obtaining credit against foreign bank guarantees without a clear justification

Electronic Payment Tools and Account Transactions

New regulations were issued to combat money laundering and terrorism financing through electronic payment tools and account transaction patterns. Indicators of suspicious activity include:

1. Excessive use of electronic payment tools
2. Unusual transactions on accounts
3. Large and unjustified transactions on medical professionals’ accounts

Bank Safes

The CBE established guidelines for detecting and preventing money laundering and terrorism financing through the use of bank safes. Indicators of suspicious use include:

1. Unusually frequent or extended visits to the safe
2. Multiple safes being rented by one customer
3. A customer’s discomfort during safe visits

Customer Behaviors and Countering Terrorist Financing

The CBE emphasized the importance of monitoring customer behaviors that may raise suspicions, including:

1. Withholding or providing inaccurate information
2. Avoiding direct contact with the bank
3. Showing unexplained changes in lifestyle or standard of living for a bank employee

Additionally, the CBE issued regulations for detecting and preventing terrorism financing, focusing on transactions to or from regions or countries with security instability or terrorist activity.