Oman’s Financial Authorities Crack Down on Money Laundering and Terrorist Financing
In an effort to combat the growing threats of money laundering and terrorist financing, Oman’s financial authorities have launched a series of initiatives aimed at identifying and mitigating risks associated with these illicit activities.
Methods Used by Criminals
- Identity fraud
- False identification
- Use of “gatekeepers” such as lawyers, accountants, and brokers who offer “specialist” services to help individuals hide their illicit activities
These methods are being targeted by authorities in an effort to curb the growing menace of money laundering and terrorist financing.
Emerging Payment Technologies Under Scrutiny
- Cell phone-based remittance systems: these technologies have the potential to be misused for money laundering and terrorist financing
- Virtual assets and related services: financial institutions are required to apply anti-money laundering (AML) and combating the financing of terrorism (CFT) measures to these activities
Insurance Products Under Monitoring
- Life insurance policies
- General insurance contracts
- These products can be used to launder money through early cancellations or overpayments
Prepaid Cards: A Potential Risk Area
Prepaid cards offer anonymity and ease of cross-border transactions, making them a potential risk area for money laundering and terrorist financing.
Tax Evasion: Another Concern
Tax evasion is another concern for financial authorities, who are working to prevent individuals from underreporting income or creating false deductions to generate untraceable funds that can be used for illicit purposes.
Non-Financial Businesses Under Scrutiny
- Travel agencies
- Car dealerships
- Cash-intensive businesses like hypermarkets: these businesses can be used to launder money by facilitating the movement of illicit funds through fraudulent or overpriced transactions.
Risk-Based Approach to Combat Money Laundering and Terrorist Financing
Financial institutions are required to apply a risk-based approach in identifying and assessing ML/TF risks. This involves understanding the risks faced by Oman, as well as the specific risks posed to each institution. Authorities are urging all financial institutions to prioritize AML/CFT compliance and take proportionate measures to mitigate identified risks.
Conclusion
While no system can eliminate money laundering and terrorist financing entirely, authorities believe that a risk-based approach will help to reduce these risks and make it more difficult for criminals to exploit vulnerabilities in the financial system.