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Egypt’s Crackdown on Money Laundering and Financial Terrorism: Strict Implementation of KYC Procedures

Last Updated: 11th November 2020

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Egypt’s Financial Sector Strengthens Anti-Money Laundering and Counter-Terrorist Financing Measures

Egypt’s financial sector is enhancing its anti-money laundering (AML) and counter-terrorist financing (CTF) measures by implementing stringent Know Your Customer (KYC) procedures. KYC requires banks and financial institutions to validate the identity of their clients, which is essential for preventing financial crimes and maintaining transparency within the financial system.

Essential Compliance: securities account management contracts and KYC procedures

Based on Egyptian Minister of Supply and Internal Trade Decree No. 906 of 2001, custodians must register their clients’ personal data in the securities accounts management system. This data includes:

  • National ID or customer ID number
  • Date of issue
  • Insurance number
  • Date of birth
  • Nationality
  • Religion
  • Legal form
  • Address
  • Telephone and fax numbers
  • Any other means used to identify the client

Custodians must maintain accurate records of the aforementioned data to ensure KYC compliance.

Combating Money Laundering and Terrorist Financing for Non-bank Financial Institutions

Decree No. 120 of 2019 outlines the measures to combat money laundering and terrorist financing for entities operating within the non-bank financial sector. Failure to complete KYC procedures is considered a suspicious activity.

Broad Definition of Funds and Assets under Egyptian Anti-Terrorism Law No. 94 of 2015

This law defines funds and assets broadly, encompassing:

  • Oil and natural resources
  • Property of any kind
  • National or foreign currency
  • Securities
  • Trade instruments
  • Any means of transferring financial resources
  • Virtual assets with a numeric value that can be traded, transferred, or converted to a digital form

The definition of terror financing also includes penalties for those who initiate terrorist actions against these funds and assets. Terrorist actions comprise:

  • Use of force and violence
  • Intimidation
  • Threats that target an individual’s life, freedom, or privacy

KYC Procedures and Cryptocurrencies

With the growing popularity of cryptocurrencies and digital assets, Egypt recognizes the significance of applying KYC procedures to prevent money laundering, fraud, and financial terrorism. Egypt encourages both domestic and international banks to adhere to these measures to minimize financial crimes within their jurisdictions. The Ministry of Finance comments, “KYC procedures enable us to properly identify our clients and assess any potential financial risks, ensuring that all transactions are conducted with transparency and in full compliance with national and international regulations.”

Relevant Decrees and Legislation