Financial Crime World

Egypt’s AML/CFT Regime under the Microscope: Insights from MENAFATF’s Evaluation Report

Background

In the Middle East and North Africa (MENA) region, the Arab Republic of Egypt underwent a thorough evaluation of its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures by the Middle East and North Africa Financial Action Task Force (MENAFATF). The evaluation report was adopted in May 2021 following onsite inspections in March 2020 and September 2020.

Key Findings of the MENAFATF Evaluation Report

  1. Active Participation in Risk Assessment: All stakeholders, including governmental sectors and the private sector, collaborated in Egypt’s risk assessment process. The findings from the 2014 to 2017 National Risk Assessment (NRA) and the 2018 to 2019 update were distributed to the relevant authorities and sectors.

  2. Adequate Financial and Intelligence Information: Egyptian authorities, like the Money laundering and Terrorist Financing Combating Unit (EMLCU), the National Security Agency, and the Administrative Control Authority, hold substantial financial and intelligence information to tackle AML/CTF issues. However, agencies such as the Anti-Narcotics Administration and the Antiquities Department require more significant improvement.

  3. Focus on Self-Laundering: Competent authorities efficiently utilize financial and intelligence data to investigate ML/TF activities, primarily focusing on self-laundering. Nonetheless, the investigation of third-party laundering is limited. The low number of ML investigations disproportionately contrasts with the large number of predicate offenses, specifically those involving substantial financial proceeds.

  4. Inadequate Addressing of Substantial Crimes: Large proceeds from serious crimes, such as organized crime and antiquities smuggling, were not adequately addressed by investigations. Most crimes generating substantial proceeds were not mentioned in the 2018 to 2019 NRA, nor were they investigated.

  5. Few TF Convictions: The number of TF convictions decreased in recent years due to the elimination of terrorist groups inside the country. However, TF cases were predominantly prosecuted in the context of investigations into terrorist crimes as opposed to standalone cases.

  6. Feedback Mechanisms: The EMLCU provides feedback to banks and financial institutions, but supervisors and financial institutions could benefit from more extensive support in the form of feedback and guidance.

  7. Legal and Regulatory Developments: Notable legal and regulatory advancements include revisions to the AML Law in 2020, the establishment of the EMLCU, and various supervisory controls issued by respective regulatory authorities.

Conclusion

The MENAFATF evaluation report offers essential insights into Egypt’s AML/CTF framework, providing recommendations to strengthen the existing measures. To read the full report, visit the MENAFATF website.

Disclaimer: This article is based on the MENAFATF Mutual Evaluation Report on Egypt and is intended to provide a summary and analysis of the findings. For the most accurate and comprehensive information, please refer to the original report.