Financial Crime World

Egyptian Crackdown on Money Laundering and Terrorist Financing: Unraveling the Complex Web of Financial Crimes

In the late 1980s, the global community ramped up efforts to combat money laundering and terrorist financing following the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. Egyptian authorities responded by enacting Law No. 80 of 2002 on Combating Money Laundering (CML Law), strengthening their stance against financial crimes.

Background

  • Response to global efforts against money laundering and terrorist financing following UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
  • Egypt enacts Law No. 80 of 2002 on Combating Money Laundering.

Defining Money Laundering and Terrorist Financing

Money laundering is defined as the conversion of funds derived from criminal activity to disguise their illicit origin. Terrorist financing is encompassed within this definition.

Money Laundering

  • Conversion of funds derived from criminal activity.
  • Disguise of illicit origin.

Terrorist Financing

  • Financing of terrorist activities.
  • Similar methods used to launder proceeds for both.

International Responses

  • FATF (Financial Action Task Force) established in response to money laundering and later expanded to Counter Terrorist Financing (CTF).
  • Money laundering and terrorist financing offenses involve dealing with proceeds of crime with knowledge of their illegal origin or assistance to individuals involved in such criminal activity to evade legal consequences.
  • Egyptian authorities emphasize the importance of proving the underlying predicate offense before pursuing charges for money laundering or terrorist financing.

Implementation and Enforcement

Money Laundering Combat Unit (MLCU)

  • Established within the Central Bank of Egypt in 2002.
  • Primary responsibilities: receiving, analyzing, and distributing Suspicious Transaction Reports (STRs) and cooperating with international organizations on AML/CTF activities.

Definition of ‘Funds’ and Underlying Predicate Offenses

  • In 2014, the definition of ‘funds’ expanded to include various forms of property, securities, etc.
  • Terrorist financing was included in the law’s scope.

Regulations for Financial Institutions and Designated Non-Financial Businesses and Professions (DNFBPs)

  • Financial institutions required to report transactions suspected of involving proceeds of crime or money laundering or terrorist financing to the MLCU.
  • Regulated institutions must establish adequate compliance systems.
  • DNFBPs such as accountants and lawyers were subjected to regulatory requirements in 2014 and must report any suspicion of money laundering or terrorist financing when it arises.

International Cooperation

  • Egypt has joined several bilateral and multilateral treaties to implement a comprehensive AML/CTF framework.
  • National Committee for Combating Corruption was established to monitor the enforcement of international conventions and ensure due observance of multilateral agreements.

Conclusion

  • Egypt has increased its capacity to pursue criminal actors and proceeds beyond its borders.
  • Upholds international commitments to the presumption of innocence.