Financial Crime World

Financial Crimes on the Rise in Oman: Expert Evaluation Reveals Gaps in Legal Framework

Introduction

A recent joint evaluation by the Middle East and Northern Africa Financial Action Task Force (MENAFATF) and the Financial Action Task Force (FATF) has highlighted several shortcomings in Oman’s anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. The assessment, conducted in July 2010, found that while Oman has made significant progress in setting up an AML/CFT system, there are still several areas that require attention.

Oman’s legal framework is robust, with a new AML/CFT law enacted in July 2010. However, the existing Executive Regulations of 2004 are still in force, causing gaps in the legal framework for preventive measures.

  • The money laundering offense does not cover all aspects required under international standards.
  • There have been no convictions for money laundering.
  • The definition of terrorist act is not fully consistent with international conventions.
  • There have been no investigations, prosecutions or convictions relating to terrorist financing.

Law Enforcement

The Financial Intelligence Unit (FIU) has made progress in functioning effectively. However, there are still areas that require improvement:

  • Expediting the time between reporting and disseminating suspicious transaction reports.
  • Implementing corrective measures for AML/CFT violations.

Both the Royal Omani Police and Public Prosecution Office have been empowered to conduct money laundering and terrorist financing investigations with adequate powers and resources. However, they have a low level of corrective measures applied in cases of AML/CFT violations.

Financial Institutions and Designated Non-Financial Businesses and Professions

Financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) were found to be lacking in their obligations under the AML/CFT law:

  • Low perception of money laundering/terrorist financing risk among businesses covered by the AML/CFT law.
  • Inadequate implementation of preventive measures.

The report recommended that Oman expedite the finalization of the Executive Regulation update to address remaining shortcomings in preventive measures, particularly for FIs.

Conclusion

While Oman has made significant progress in setting up an AML/CFT system, there are still several areas that require attention to ensure effective implementation. The full mutual evaluation report will be published shortly, but these findings serve as a wake-up call for Oman’s authorities to address the gaps and deficiencies identified in this assessment.

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