Oman’s Efforts to Combat Money Laundering and Terrorist Financing
In its continued efforts to prevent financial crimes, Oman has implemented the Anti-Money Laundering and Combating Terrorism Financing Law (Royal Decree 30/2016), also known as the AML/CFT Law. This law aims to combat money laundering and terrorist financing activities in the country.
Key Provisions
Coverage of the Law
The AML/CFT Law applies to banks, financial institutions, non-financial businesses and professions, and non-profit associations. Under the law, these entities are required to implement measures to prevent money laundering and terrorist financing.
Record-Keeping Requirements
One of the key provisions of the AML/CFT Law is the requirement for banks to retain records, documents, information, and data related to client identities and transactions. These records must be retained for a period of 10 years from the date of conducting or initiating a transaction, completing a business relationship, or completing a transaction.
Suspicious Transaction Reporting
Banks are also required to notify the National Financial Information Centre immediately if they suspect any funds routed through their bank relate to proceeds of crime, money laundering, or terrorist financing.
Due Diligence Requirements
Identifying Counterparties and Clients
The AML/CFT Law sets out several due diligence requirements for covered institutions. These include:
- Correctly identifying relevant counterparties, clients, and beneficiaries
- Determining whether a client or beneficial owner is a politically exposed person (PEP) and carrying out further due diligence on PEPs
- Undertaking further due diligence on any party for whom an account is opened
Depositor Protection
Oman also has a depositor protection regime in place, known as the Bank Deposit Insurance Scheme (BDIS). The BDIS was established to provide comprehensive insurance cover on specified deposits with banks operating in Oman.
Funded by Initial Contributions and Premiums
The scheme is funded through initial contributions from the Central Bank of Oman and member banks, as well as annual premiums collected from member banks. The current compensation amount for deposits is up to OMR20,000.
Bank Secrecy
Article 70 of the Banking Law prohibits licensed banks, their directors, officers, and employees from disclosing or revealing client-related information unless required by law or instructed by the Central Bank of Oman. Customer information may only be disclosed with the customer’s consent, which can be granted through a general consent.
Penalties for Non-Compliance
The AML/CFT Law does not provide specific penalties for non-compliance. However, Article 14 of the Banking Law provides the Central Bank of Oman with wide-ranging powers and discretion to impose penalties on banks, including fines and suspension/cancellation of a banking license.
Conclusion
In conclusion, Oman’s efforts to combat money laundering and terrorist financing are crucial in maintaining the integrity of its financial system. The AML/CFT Law, depositor protection regime, and bank secrecy requirements are all important measures aimed at preventing financial crimes and ensuring the safety of depositors’ funds.