Financial Crime World

Title: Egypt’s AML/CFT Measures Under Scrutiny: MENAFATF’s Evaluation Report Highlights Strengths and Areas for Improvement

Background

Amidst heightened global efforts to combat financial crimes, the Middle East and North Africa Financial Action Task Force for combating Money Laundering and Terrorist Financing (MENAFATF) recently evaluated Egypt’s anti-money laundering (AML) and counter-terrorist financing (CFT) measures. The following article offers an overview of the evaluation report, revealing the strengths and areas for improvement in Egypt’s financial crime prevention measures.

Evaluation Overview

The evaluation, conducted from March to October 2020, aimed to assess Egypt’s level of compliance with the Financial Action Task Force’s (FATF) 40 Recommendations and the effectiveness of its AML/CFT system. Egypt, a MENAFATF member since 2002, demonstrated a commendable level of collaboration from governmental sectors and the private sector during the national risk assessment process.

Risk Assessment Findings

  • Egypt’s current AML/CFT framework
  • Collaboration from governmental sectors and the private sector during the national risk assessment process
  • Further verification required for risks and prevailing domestic patterns of self-laundering in higher-risk sectors (real estate brokers and legal professionals)

Information Usage

  • Competent authorities’ strong understanding of risks
  • Access to a wide range of financial and intelligence information
  • Improvements: Increased feedback from the EMLCU and a more comprehensive analysis of suspicious transaction reports (STRs)

Money Laundering Investigations and Prosecutions

  • Focus on self-laundering cases and to a lesser extent on third-party laundering
  • Need to address challenges in prosecuting stand-alone money laundering cases
  • Lack of convictions ordering confiscation in money laundering cases

Terrorist Financing Investigations

  • Good understanding of risks and focus on collection, movement, and use of funds
  • Decline in convictions mainly due to efforts in eliminating terrorist groups
  • Encouragement to implement targeted financial sanctions and improved international cooperation

Recommendations for Strengthening Egypt’s Financial Crime Prevention System

  • Legislative improvements
  • Regulatory enhancements
  • Increased international cooperation

Future Outlook

Egypt’s response to these recommendations will be crucial to its continued efforts to mitigate money laundering and terrorist financing risks. The country’s solid economy and substantial banking sector offer opportunities for continuous improvements in AML/CFT measures.