Oman’s Central Bank Issues Guidelines for Non-Face-to-Face Business Transactions

Strengthening Measures Against Money Laundering and Terrorism Financing

The Central Bank of Oman has issued new guidelines aimed at preventing money laundering and terrorism financing in non-face-to-face business relationships or transactions. The guidelines require financial institutions to implement additional verification measures to ensure the integrity of their customers and transactions.

Requirements for Customer Identification and Verification

Under the new rules, financial institutions are prohibited from opening an account or establishing a business relationship with a customer if they cannot comply with identification and verification requirements. In such cases, the institution must file a report with the Center for Combating Money Laundering and Terrorism Financing.

• Financial institutions may delay verification of customer identity until after the establishment of a business relationship, provided certain conditions are met.
• The institution must include risk management procedures to mitigate higher risks in such situations.

Cross-Border Correspondent Banking Relationships

For cross-border correspondent banking relationships established prior to the enactment of the law, financial institutions must document their requirements in writing and apply them to all transactions.

Unusual Large Transactions and Patterns of Transactions

The guidelines emphasize the need for financial institutions to examine unusual large transactions or patterns of transactions that do not have an apparent economic or lawful purpose. In cases where the risk of money laundering or terrorism financing is higher, financial institutions are required to apply enhanced customer due diligence measures.

• Financial institutions must maintain records of all transactions and business relationships with persons and financial institutions from countries identified by the Committee as posing a higher risk of money laundering and terrorism financing.
• Records must include customer identification documents, account files, transaction reports, and risk assessments for at least 10 years.

Internal Policies, Controls, and Procedures

The guidelines require financial institutions to maintain internal policies, controls, and procedures to ensure compliance with anti-money laundering and combating financing of terrorism regulations. Financial institutions must develop and implement such policies, controls, and procedures that are approved by their board of directors or senior management and allow them to manage and mitigate identified risks effectively.

Conclusion

The new guidelines aim to strengthen the financial sector’s defenses against money laundering and terrorism financing, ensuring a safer and more secure financial system for Oman.