Financial Crime World

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Egypt’s Financial Sector Under Scrutiny: Criminal Groups, Tax Evasion, and Terrorist Financing Exposed

Introduction

A recent report by the National Risk Assessment (NRA) has revealed that Egypt’s banking sector is a hotbed of criminal activity, with proceeds of crime being laundered through electronic transfers. The real estate sector also emerged as a major hub for money laundering, with criminals using legitimate sources of income to purchase properties.

Criminal Activity in the Banking Sector

  • Proceeds of crime are being laundered through electronic transfers
  • Real estate sector is a major hub for money laundering
  • Criminals use legitimate sources of income to purchase properties

Terrorist Financing

  • Electronic transfers have been identified as a key method used by terrorists to finance their operations
  • Banks and other financial institutions are being misused to move funds raised for terror activities

Legislative Developments

Amendments to the Anti-Money Laundering (AML) Law

  • AML Law No. 80 of 2002 was amended in 2020
  • New law requires definitions for funds and assets be set

Other Legislation

  • Prime Minister decision No. 457 of 2020 amending some provisions of the executive regulation of the AML Law
  • Law No. 15 of 2020 amending some provisions of Anti-Terrorism Law No. 94 of 2015

Supervisory Controls

Regulatory Authorities

  • Central Bank of Egypt
  • Ministry of Communications and Information Technology
  • Financial Regulatory Authority (FRA)
  • These authorities have issued guidance to financial institutions

Regulations Governing Cross-Border Movement of Currency and Bearer Negotiable Instruments (BNI)

  • Egyptian legislator has regulated the rules governing the incoming and outgoing cross-border movement of currency and bearer negotiable instruments (BNI)

Risk Assessment and Coordination

First ML/TF Risk Assessment Report

  • Published in 2019, covering the period between 2014 and 2017
  • Identified key risks and vulnerabilities in the financial sector

Update to the Assessment Process

  • Finalized in 2020, covering the period from 2018 to 2019
  • Entities specialized in combating terrorist financing have a good understanding of the risks of terrorism and terrorist financing
  • Other governmental institutions and regulatory bodies have varying levels of understanding

Conclusion

Egypt’s financial sector is under scrutiny due to its vulnerability to criminal activity, including money laundering and terrorist financing. The government has made significant legislative developments in recent years, but more needs to be done to combat these threats.