Financial Crime World

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Oman’s Efforts to Combat Money Laundering and Terror Financing: Best Practices Revealed

A recent evaluation by an assessment team has highlighted Oman’s efforts to combat money laundering (AML) and combating the financing of terrorism (CFT), revealing both strengths and weaknesses in its anti-money laundering system.

Overview

The Sultanate of Oman, a member of the Middle East and Northern Africa Financial Action Task Force (MENAFATF) and the Gulf Co-operation Council, which is itself a member of the Financial Action Task Force (FATF), has set up an AML/CFT system that largely aligns with international standards.

Key Findings

  • A robust new AML/CFT law was enacted in July 2010, although some gaps remain in the legal framework for preventive measures.
  • Oman’s legislation criminalizes money laundering and terrorist financing to a large extent, but questions remain regarding effective implementation due to low numbers of convictions.
  • The assessment team noted that the effectiveness of Oman’s legal system and institutional framework was lacking in some areas:
    • Laws do not cover “the concealment or disguise of the disposition of property”.
    • Criminal liability for money laundering does not extend to all legal persons.

Strengths

  • The Financial Intelligence Unit (FIU) has made progress in functioning effectively, with a significant increase in the dissemination of suspicious transaction reports (STRs) in 2010 compared to previous years.
  • The Royal Omani Police and Public Prosecution Office are empowered to conduct money laundering and terrorist financing investigations.
  • Supervisory agencies, including the Central Bank of Oman and Capital Markets Authority, have sufficient powers and financial resources to conduct their activities.

Areas for Improvement

  • Finalize the drafting of the Executive Regulation to address remaining shortcomings in preventive measures for financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs).
  • Address deficiencies in FIs’ obligations that apply equally to DNFBPs.
  • Improve the capacity and experience of the Financial Intelligence Unit (FIU) in analyzing suspicious transaction reports (STRs) to expedite the time between reporting and dissemination.

Conclusion

While Oman’s efforts to combat money laundering and terrorist financing are commendable, the country must continue to address its weaknesses and strengthen its legal framework and institutional capacity to effectively prevent and detect AML/CFT violations.