Financial Crime World

Egypt Strengthens Fight Against Terrorist Financing and Money Laundering

Egypt has taken significant steps to combat money laundering and terrorist financing, introducing a robust legal framework and regulatory authorities to safeguard its financial system’s integrity and security.

The country’s primary legal framework for preventing and combating money laundering is the Money Laundering Law No. 80 of 2002. This law serves as the foundation for Egypt’s anti-money laundering (AML) policies and regulations.

Regulatory Authorities

The Central Bank of Egypt (CBE) plays a crucial role in implementing AML policies, with the Money Laundering Combating Unit (MLCU) operating under its umbrella to ensure compliance. The MLCU is responsible for:

  • Supervising and enforcing AML regulations
  • Analyzing suspicious transaction reports
  • Taking appropriate action if money laundering is suspected

Customer Due Diligence

Financial institutions and designated non-financial businesses and professions (DNFBPs) are required to conduct thorough customer due diligence (CDD) measures when establishing business relationships with customers. This includes:

  • Identifying the customer
  • Verifying their identity using reliable sources
  • Assessing the nature of the customer’s business

Reporting Suspicious Transactions

Entities subject to AML regulations must report any suspicious transactions to the MLCU, without tipping off the customer.

Record-Keeping and Documentation

Financial institutions and DNFBPs are required to maintain records of transactions, customer identification data, and other relevant documentation for a specified period, as prescribed by law. This ensures that transaction trails are available for regulatory review and investigation.

Employee Training and Awareness

Employees within financial institutions and DNFBPs must receive regular training and awareness programs on AML regulations and procedures to ensure they are well-informed and capable of identifying suspicious activities.

Risk-Based Approach

Entities subject to AML regulations are encouraged to adopt a risk-based approach to AML compliance, assessing and mitigating money laundering risks based on the nature and complexity of their business activities.

Penalties for Non-Compliance

Egypt takes AML compliance seriously, imposing significant penalties for non-compliance. These penalties can include:

  • Fines
  • Imprisonment
  • Revocation of licenses
  • Forfeiture of assets

International Cooperation

The country actively participates in international efforts to combat money laundering and terrorist financing, cooperating with organizations such as the Financial Action Task Force (FATF) and the Egmont Group of Financial Intelligence Units to share information and enhance AML measures globally.

Conclusion

As Egypt continues to enhance its AML framework to align with international standards, it is essential for businesses operating in the country to remain vigilant and fully comply with AML regulations to avoid severe penalties and contribute to the global fight against money laundering.