Terrorism Financing: Supervisory Authorities Face Additional Obligations
In an effort to combat terrorism financing, the National Counter-Terrorism Committee (NCTC) has issued Decision No. (1/2022), which imposes additional obligations on supervisory authorities in Oman.
New Obligations for Supervisory Authorities
According to Clause (j) of Article 13 of the Law on Combating Money Laundering and Terrorist Financing Act No. (30/2016), supervisory authorities have been tasked with providing guidance and instructions to financial institutions, non-financial businesses and professions, non-profit associations and bodies on their requirements and the implementation of the NCTC’s decision.
Verification of Internal Controls
The NCTC has also required supervisory authorities to verify that financial institutions and designated non-financial businesses and professions (DNFBPs) have effective internal controls and procedures in place to ensure compliance with the obligations arising from Decision No. (1/2022).
- Verify that financial institutions and DNFBPs have measures and systems in place to screen client databases against the list of designations
- Detect customers and beneficial owners who are subject to targeted financial sanctions (TFS)
- Report any violations to the NCTC
Reporting Requirements
Supervisory authorities must also determine whether:
- Any targeted funds or property has been identified and frozen by a financial institution or DNFBP
- Relevant reports were filed with the NCTC as required under the TFS Regulation
Annual Reporting and Liability
The NCTC’s decision requires supervisory authorities to report their findings to the committee in writing on an annual basis, except in cases where violations are detected, in which case immediate notification is required.
Failing to comply with these obligations can result in:
- Administrative fines ranging from OMR 5,000 to OMR 20,000
- Criminal prosecution
UN/Local List and Liability
Freezing measures have no time limit, meaning that funds and/or economic resources must remain frozen until the person, group or entity is delisted from the UN/Local List.
The NCTC has also outlined liability and sanctions for non-compliance with the obligations listed under Chapter ‘Obligations to Implement Targeted Financial Sanctions’.
Designation of Individuals and Entities
The NCTC has designated a list of individuals and entities subject to TFS, which is updated regularly. The committee may designate an individual or entity based on reasonable grounds that they meet the criteria for inclusion in the local list without the need for investigation or legal proceedings.
In light of these new obligations, supervisory authorities in Oman must ensure that they are fully complying with the requirements outlined in Decision No. (1/2022) to effectively combat terrorism financing and prevent the misuse of financial systems.