Financial Crime World

Egypt’s Money Laundering and Terrorist Financing Prevention Measures Assessed

The Middle East & North Africa Financial Action Task Force (MENAFATF) has completed an assessment of Egypt’s efforts to combat money laundering and terrorist financing. The following are the key findings and priority actions based on the report.

Assessment Process

  • The assessment was conducted through on-site visits from 1 to 9 March 2020 and from 16 September to 7 October 2020.
  • The process was finalized remotely.

Key Findings and Priority Actions

The MENAFATF has reviewed the findings of this assessment and endorsed them. According to the executive summary of the report, Egypt’s financial system is still at risk of being used for illegal activities due to several gaps and shortcomings. The country needs to address these weaknesses to prevent its financial system from being exploited by criminals and terrorists.

Compliance Level with FATF Recommendations

  • Egypt has a medium level of compliance with the FATF Recommendations on money laundering and terrorist financing.

Areas for Improvement

  • Improve understanding and implementation of technical aspects, such as customer due diligence, politically exposed persons (PEPs), and wire transfers.

Priority Actions for Egypt

The report highlights several priority actions that Egypt needs to take to bring its anti-money laundering and countering financing of terrorism (AML/CFT) system up to par with FATF standards. These actions include:

  1. Strengthening risk assessment: Make risk assessments more targeted and effective by incorporating more comprehensive information on money laundering and terrorist financing risks.
  2. Improving customer due diligence: Implement effective customer due diligence measures, including enhanced due diligence for complex or higher-risk transactions.
  3. Enhancing PEPs measures: Improve the understanding and implementation of measures related to PEPs to minimize the risk of their abuse.
  4. Increasing supervision on financial institutions’ compliance: Strengthen regulatory and supervisory capacity to ensure effective implementation of AML/CFT regulations by financial institutions.

Conclusion

Egypt needs to take significant steps to prevent money laundering and terrorist financing through its financial system fully. The FATF Recommendations are a crucial tool for assessing the effectiveness of a country’s AML/CFT measures, and it is essential that Egypt implements them fully.