Financial Crime World

Financial Crime Reporting Requirements in Egypt: Understanding the Legal Framework and Compliance Obligations

Introduction

Egypt has established a robust legal framework and regulatory authorities to prevent and combat money laundering and terrorist financing. The country’s Anti-Money Laundering (AML) legislation is designed to ensure the integrity and stability of its financial system.

A Comprehensive AML Framework

Primary AML Law

Egypt’s primary AML law is the Money Laundering Law No. 80 of 2002, which provides the legal basis for preventing and combating money laundering in the country.

International Conventions and Agreements

Egypt has ratified various international conventions and agreements related to AML, including:

  • The United Nations Convention against Corruption (UNCAC)
  • The Arab Convention for Combating Corruption

Regulatory Authorities

The Money Laundering Combating Unit (MLCU), which operates under the Central Bank of Egypt (CBE), is the primary regulatory authority responsible for AML supervision and enforcement in the country.

Key Compliance Requirements

To prevent money laundering, 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

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

Record-keeping and Training

All financial institutions and DNFBPs must maintain records of transactions, customer identification data, and other relevant documentation for a specified period, as prescribed by law. Employees within these entities should receive regular training and awareness programs on AML regulations and procedures to ensure that staff are well-informed and capable of identifying suspicious activities.

A Risk-Based Approach

Entities subject to AML regulations are encouraged to adopt a risk-based approach to AML compliance, which means 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 and imposes significant penalties for non-compliance. These penalties can include:

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

International Cooperation

Egypt actively participates in international efforts to combat money laundering and terrorist financing, cooperating with various international organizations such as the Financial Action Task Force (FATF) and the Egmont Group of Financial Intelligence Units.